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Thursday, 25 July 1946


Mr CHAMBERS - Tell us what happened between 1929 and 1931?


Sir EARLE PAGE - The honorable member for Adelaide (Mr. Chambers) is repeating the old lie that the depression in this country was the result of some government action. We might expect to hear' that lie repeated by a moron, a person with the mind of a Fever year old child, but I. did hot expect to hear the honorable member repeat it. He should know that the depression was world-wide. It had the effect of causing a tragic drop in the prices of our primary products. The honorable member may belong to the class of people who have never learned to read or write,and who know nothing about international trade. The old lie is too silly to spend any time upon; no one believes it to-day. However, it was left to the Labour party to take such administrative and legislative action, by excessively increasing taxation, as drove our people deeper into the depression than was at all necessary. Ibelieve that during one period while the present Minister for the Army (Mr. Forde) was Minister for Trade and Customs, one man lost his employment every four minutes. That was the result of the stupid policy which the Labour Government applied.

A comparison of the rates of tax that will be levied under the reduced scale which the Chifley Government is now introducing with those levied by theGovernment of which I was Treasurer will be of interest. It must be borne in mind also that the social services contribution which is being levied by the Chifley Government falls on people of very low incomes with great severity, and practically condemns them to the lifelong payment of what is in reality an income tax. The following table sets out the rates of tax payable on certain incomes under the Chifley- Administration, and those that were payable under the Bruce-Page Administration : -

 

It is truethat the Chifley rates include certain amounts collected for andon behalf of State governments, but those are roughly only one-fifth of the total collection. The amounts collected from a taxpayer with four dependent children under the Chifley scale and under the Page scale compare as follows: -

 

The Chifley system heavily penalizes the taxpayers in respect of social services, and the benefits are not commensurate with the heavily increased charges. This Government has been imposing a social services tax, without exemption, of1s. 6d. in the £1. Now, with a fanfare of trumpets, the Government is proposing to reduce therateto 3d. in the £1 on incomes of less than £100 a year ; but only a very few people will benefit by this concession. After earned income reaches £100 a year the social services tax increases by oneeighth of a penny for each extra £1 of income. The result is that a wage-earner pays the maximum rate of1s. 6d. in the £1 as soon as he earns £4 5s., or about 15s. less than the weekly basic wage. Men on the basic wage, which is about £5 a week, pay 7s. 6d. a week social services tax ; a man earning £6 a week pays 9s. a week; a man earning £8 a week pays 12s. a week, and a man earning £10 a week pays 15s. a week, compared with theflat rate of1s. 6d. a week for benefits without a means test, which would have been available under the contributory national insurance scheme that could be brought into operation immediately by proclamation, for the legislation is still on the statute-book. . Under that scheme a person who is now entitled to the old-age pension of 32s. 6d. a week would have been entitled, for a payment of 3s. a week to a pension of £2 a week without any means test at all, as well as other benefits. The Australian Labour party has tied up itself to this stupid scheme, despite the fact that Great Britain and most other countries have- found it necessary to have a contributory scheme. The benefits available under the national insurance scheme would he: Medical, sickness, disablement, invalid and old-age pensions, widows' pensions, orphans' pensions, and dependent child allowance. The purchasing power of money has depreciated substantially since the scheme was introduced. Taxation on the lower ranges of income must be reduced materially; otherwise, there will be a depression, with consequent unemployment, and ultimately the Government will find it impossible to raise, by means of taxes, the revenue it will need for the social services it has promised. The right honorable member for Darling Downs (Mr. Fadden) has pointed out that the fund into which the social services tax is paid is already bankrupt. The man with an income of £1,000 a year contributes £1 5s. a week, instead of the ls. 6d. a week that he would contribute under the national insurance and general taxation scheme, and the Government is responsible still for two-thirds of the total amount paid, into the fund instead of the one-third that it would have to contribute under that scheme. After the last war, because taxation was reduced, there was full employment in factories, shops, transport, and all national activities, and on farms. The national income rose, and the national debt was reduced by many mil-, lions of pounds. Large public works programmes were financed from the revenue account. The railway gauge between Sydney and Brisbane was standardized. Roads were constructed under the federal aid roads scheme, and these improved the transport facilities over large areas. The stabilization of prices and wages must go hand in hand with the reduction of taxation. The purchasing power of existing wages would be markedly increased if the present excessive taxes had not to be paid and the prices of essential goods remained static. In order to achieve this purpose, the. stabilization scheme which has been operating, in varying degrees, since the beginning of Warld War LT. must be continued. I pay tribute to the Menzies Government, which, on the first day of the war, appointed a Prices Commissioner, who continued to operate throughout the war. He was instructed to aim at keeping Australian prices at as low a level as possible. In regard to a general stabilization scheme, Australia did not act so quickly as did other British countries. Great Britain inaugurated a general stabilization scheme at the outbreak of the war, and New Zealand in 1940. In September, 1941, Canada went even farther. Australia did not follow their example until April, 1943, although I fought hard in the Parliament for many months during 1942 and 1943 for the adoption of such a scheme. I actually moved for the introduction of a general plan on the 25th March, 1943, but the motion was opposed by the Government. Yet within a fortnight of the rising of the Parliament, a general stabilization scheme was brought in under National Security Regulations; Unfortunately, too many loopholes have been revealed in it. The attempt waa made to decapitate those who had " pushed their heads through the ceiling by providing heavy penalties for blackmarketing operations, but how many persons have been fined or otherwise severely dealt with on that account? The rationing system has been defended, yet .Dr. Clements, the chairman of the Nutrition Committee, has reported that the consumption of food per family, apart from butter, is greater now than it was in 1938, whilst the people of England are practically starving. Our people have been made coupon-conscious. The basic wage regimen must be widened, by including in it fruit, vegetables and other commodities, the prices of which have increased substantially. Much of the present industrial unrest would then cease, because the basic wage would more nearly meet the cost of living.







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