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Thursday, 25 July 1946

Mr WHITE (Balaclava) .- The subject before the House is the Treasurer's Financial Statement. We have just listened to the Minister for .

Works and Housing (Mr. Lazzarini) indulging in some heavy electioneering propaganda, and once again expounding his financial theories which he has repeated often during the last " ten or twelve years, and asserting that the -banks are the source of all evil and that with a good printing press we can easily reach the happy millenium

Mr LAZZARINI - I did not say that.

Mr WHITE - True, but that was the import of the honorable gentleman's remarks. However,- I do not intend to compete with the honorable gentleman in delving into the past. I merely say in answer to his verbal voyage from. China to Peru that it was a Liberal or Nationalist government led by Mr. Alfred Deakin in 190& which first introduced the old-age pension into this country. It is true that the rate of pension has fluctuated according to the vicissitudes through which this country has passed. The honorable gentleman digressed very widely from the subject before the Chair. Although he was free to ramble within the limits of the Standing Orders and the tolerance of the- House, he would have employed his time better ,had he dealt with matters more pertinent to the subject- before the Chair. The only other speaker from the Government side was the Minister for Post-war Reconstruction (Mr. Dedman), who in his pompous and self-satisfied way gave us -an amateurish lecture on economics, and showed us the evil things that were coming our way and all the good things that Australia has gained from Labour government. It is rather amusing to hear from the lips of these gentlemen the statement that they have been the champions of Australian defence. Not a budget was brought down by a Liberal or Nationalist government in the past that was not bitterly opposed by the representatives of the Labour party. Instead of the Minister for Works and Housing indulging in a financial dissertation he would have done better had he told us what he proposed to do to meet the housing needs of the people and how many. war. service homes are to be built during the next few years. We would then have listened to his speech with rapt attention. His department, which was set up for the purpose of providing homes for. the people and for ex- service personnel, costs in overhead expenses approximately £50,000 a year. It has an unenviable record. In 1944, not a single home was built ; in 1945, eight homes were constructed - a fine achievement ! Now it is promising to build many more homes. If the Government had put aside building materials for the construction of houses and not undertaken many useless public works, homes would be available for the people in large numbers to-day.

The statement before the House is a substitute for a budget, but it contains little useful information. The Treasurer should have brought down a budget setting out in clear, and precise terms, for the information of honorable members and the people, the items on which Government money is to be expended and what. will be the Government's financial " policy during the forthcoming year. A former Prime Minister, the Leader of the Opposition (Mr. Menzies) has referred to the deficiencies in the statement and has pointed out how heavy taxation has cramped production. Another former Prime Minister, the Leader of the Australian Country party (Mr. Fadden) has drawn attention to the financial juggling and chicanery in this substitute for a budget. The right honorable gentleman has clearly shown that that- is perhaps one of -the reasons, why the Treasurer has merely submitted a statement and not a budget, .with audited accounts of expenditure, and forecasts of the Government's commitments for the corning financial year. Dealing with income tax reductions the statement contains the following observations : -

The new combined rates of income tax and social services contribution that will be payable represent an overall reduction of 22 per cent, from the peak war-time rates first enacted in 1943. On that basis the reductions range from more than 47 per cent, on the lowest incomes to something under 20 per cent, on incomes exceeding £1,500.

I propose now to read an analysis of the statement from the pen of Mr. John Don, the member for Elsternwick in the Victorian Parliament; his comments have been placed before the Treasurer, but no answer has been furnished in rebuttal. Mr. Don sets out that the taxpayer, with a wife and two children dependent on him and earning £4 6s. 2d. a week will receive the benefit of 2d. a week as the result of the new tax cuts. That represents £d. a week for each member of the family.

Mr Calwell - Nonsense.-

Mr WHITE - I refer the Minister to the Treasurer's tables in order that he may check the accuracy of these figures; Mr. Don says -

The recently much-publicized tax rates convey the impression of large-scale tax cuts. The figure of 40 per cent, reductions has been bandied about, but this, by no means, shows the true picture. For a taxpayer without dependants to obtain a 31.2 per cent reduction he or she has to be in receipt of as little as £3 7s. 4d. a week, while, for an income of £3 10s. lid. per week, the large .reduction anticipated has shrunk to a mere 14 per cent. A taxpayer with a dependent wife must earn as little as £3 16s. lid. a week to get a reduction of 32.8 per cent., but if he earns £4 6s. 6d. a week the reduction has dwindled to 10.3 per' cent. The position of a taxpayer with a. dependent wife and one child is, even worse. While the weekly wage of £3 16s. lid. gives him only a 25 per cent, reduction, he gets a reduction of 16.9 per cent, for £4 6s. 6d. a week. A taxpayer earning £4 6s. 6d. with a dependent wife .and two children only gets an 18.7 per cent, reduction. In both these last two classes the figures of 30 per cent, and 40 per cent, are conspicuous by their absence. The basic wage earner, with dependant only, gets a 20 per cent, reduction. So it seems that only those people who have few, if any, dependants, who are in receipt of considerably less than the basic wage, are to obtain reduction of anything like the much-publicized 30 per cent, and 40 per cent, reductions. But. in any event, what do these reductions mean when translated into cold cash? The tables given below show a taxpayer without dependants doesn't quite get an extra 2s. 6d. per week if he earns up to £5 15s. od. a week. This may buy him a new tooth brush or a large packet of cigarettes, if he can get them.

A basic wage earner with a dependent wife only gets an extra weekly account of approximately la. 6d., while, if he has a wife and child, he gets an extra ls. 9d. If he has a wife and two children dependent on him, the amount his weekly pay envelope will be fattened by is a mere Is. 4d. A man on £4 16s. 2d>. a week with dependent wife and two children gets a 17.6 per cent, reduction, while a bachelor on £19 4s 8d. gets a 12.3 per cent, reduction. But compare their net weekly savings - the family man gets an extra 2d, a week while the bachelor gets 14s. 8d.. just 88 times more despite the misleading percentage figures.

Those are the tax reductions on which the whole financial statement - is based The newspapers were headlined with announcements of a 40 per cent, reduction, but that relates only to single men and women on the lowest rates of pay, less than the basic wage; the great, majority of the working people on reasonable wages and less will get only paltry rebates of .tax. Yet they have been led to believe by the Treasurer's grandiose statements* that some good is coming to them. The following tables set out the hollowness of the much-vaunted tax concessions : -





I hope the Treasurer will examine the foregoing figures, which are authentic and' have been taken out by a man well equipped for the job.

Mr Calwell - "What are his qualifications ?

Mr WHITE - I think he has every qualification necessary to do it. I noticed in the press that the Treasurer, when questioned about the matter, said that he had not yet examined the figures. I hone that he will do so soon. So much for the much-heralded reduction pf taxes.

I say, parenthetically, that taxes must be imposed at a high rate in war-time, because no government can finance a war without boosting its revenue from taxes, without increased borrowing, and without resorting to credit expansion, the last of which must be used only' within care- ful limits. I consider, though, that the Government in administering its tax laws should show tolerance. A man running a small engineering shop in Melbourne says that in no year has he turned over more than £3,000. No. doubt for right reasons officials of the Taxation Department are checking his income, but for some reason the inquiry covers the 32 years in which he has been in business. He has submitted income tax returns for 32 years and possibly a longer period. Yet his bank records have been searched and copied over 32 years and he has been questioned- thereon. The bankbooks of his wife and children have been examined. When no records are available a memory marathon is tried out. He has been questioned about his assets at the date of his marriage, about the dates on which he bought or sold properties and their values, about how many cars, boats, war bonds, shares, &c, he has owned, about the dates when machinery was purchased and sold and the prices at which it was purchased and sold, about the value of furniture in his home, and about how much it is insured for, about how much he gave his wife for housekeeping expenses, clothing, &c, and about how he spent the balance. The officials were glad to see that he did not drink or smoke or back horses. He was asked where his children went to school. All that may be necessary, but I question it.

Mr Calwell - Why?

Mr WHITE - I said earlier that the Taxation Department has the right to check the accuracy of income tax returns, but it is rather harassing for it to go back over all those years. I think the Minister will agree that accountants ought to be able to get an accurate picture without all that questioning. I do not criticize the officials because I believe that they are worthy men doing their job, nor do I think that the Taxation Commissioner wishes to harass a taxpayer. I merely bring this case to the notice of the Treasurer for his consideration of the methods employed.

The rate of the sales tax was recently reduced and the field of exemptions was widened, but, nevertheless, revenue therefrom was £33,600,150 last year compared with the estimate of £28,000,000. The prediction was made by me and other honorable members on this side that the sales tax would return more than the estimate. The sales tax is a purchase tax, a penal tax, imposed at high rates during war to divert money from the purchase of luxuries to other goods. In Great Britain the tax is called the purchase tax. In some instances the tax rate there is equal to 100 per cent. In Australia it is 25 per cent, on many goods, and it is still applied to a wide range of goods. The rate of tax on some items ought to be reduced, and other items ought to be exempt from tax, especially items used in the building trade in order that the cost of home building may be reduced. It is wrong that, as the result of sales tax, ex-servicemen should have to pay inflated prices if or houses.

The Leader of the Australian Country party (Mr. Fadden) has revealed an apparent error in the figures relating to disposals. The financial statement shows that in 1945-46, an amount of £15,635,000 was obtained from that source, whereas Hansard- shows that the figure .ought to be, on the Treasurer's own statement in reply to a question by the Leader of the Australian Country party, £45,000,000. An explanation of the disparity is required.

Although the lend-lease arrangement has been ended, we have to pay to the United States of America £8,400,000, of which $20,000,000 has to come from the dollar pool. I do not know whether we should feel happy, about that arrangement. It will deplete the dollar' funds available to Australia for the purchase of petrol and other goods which we require from the United States. We shall, also buy certain non-combat aircraft. I should like to know what they are. Most of the aircraft for training purposes were obtained from Great Britain, but during the war, hundreds' of American Liberators and other aircraft were flying in Australia. Numbers of them are now> rotting on airfields. Are we to pay for junk at wartime prices? In. the United States, prices are not controlled as they have been in Australia. For example, the price of blankets is three times higher in America than it is here. I should like to know how. much will be paid for the non-combat aircraft, which, I understand, are largely scrap now.

Although the revenue of the PostmasterGeneral's Department is continually expanding, the department is profiteering. Consider the cost of sending parcels of food from Australia to England. Often, the postage exceeds the value of the contents of the parcel.- The Commonwealth Government has not contributed any food to the hungry people of Great Britain. I understand that New Zealand made a gift of £1,000,000,. and Canada cancelled certain debts, but in Australia only the State governments and groups and individuals have given any food to .the people of the United Kingdom. -

Mr Mountjoy - Has not the Commonwealth contributed to Unrra?

Mr WHITE - Australia makes a substantial contribution to Unrra, and that is. a worthy cause. I support it wholeheartedly. But that effort should not prevent us from doing more for- Great Britain. Bread and flour' are now rationed in the United Kingdom. Even the U-boat campaign during the war was not able to enforce that.

Mr SPEAKER - Order ! I remind the honorable member that the subject " Food for Britain " appears on the notice-paper.

Mr WHITE - The Financial Statement refers to the revenue of the PostmasterGeneral's Department. I contend that postage on food parcels to Great Britain could be substantially reduced, because the revenue of the department is very buoyant.

Other matters which I desire to discuss on this financial statement are of a minor nature compared with the important issues to which I have referred, but they are very human. War Cabinet has prescribed a date before which no pay in lieu of furlough shall be granted to troops. A few days ago I received a letter which must be typical of cases .which have been brought to the notice of honorable members. It states -

My late husband had almost 80 days' accrued leave to hrs credit, but because he died on the 27 th December, 1944, three months before the specified time, I am deprived of this money.

This anomaly has been referred to many times in the House, and the Minis ter for the Army (Mr. Forde) promised that he would make a statement about it. There is no valid reason why a date should be fixed before which the money due to a serviceman should not be paid upon his death to his dependants. ,If a serviceman died after the prescribed date, any money due to him is paid to his dependants. The reason for War Cabinet's decision has not been explained to the House.- My correspondent continued -

With rent, cost of living, and general expenses so high, trying to keep a home together for my children and self on our present income is a great strain.

I urge the Minister to ensure that jusstice shall be done to those who suffer so.

The basis for payment of the war gratuity was decided some time ago by a parliamentary committee on which ail political parties were represented. Since then, certain factors have arisen which necessitate a review. The. gratuity will not be paid to ex-servicemen for a number of years, except in cases of dire necessity. That an ex-serviceman may be heavily in debt, or desires to purchase furniture, are not regarded as adequate reasons for paying' the gratuity at once. The gratuity will be paid only if the exservicemen desires to build a house, or under certain other conditions. That rigid adherence to that policy can cause hardship is indicated by the following letter from the parent of a member of the Royal Australian Air Force who was killed in operations over Europe: -

The Royal Australian Air Force finance department has written to me with regard to my application for immediate payment of gratuity of £120 and has told me that because my husband is in regular employment I am not regarded as a necessitous case. I wonder if cruelty can go further. My husband is approaching .03 years of age and can be COmpulsorily retired in just over two years' time. We do not own a home, but kind friends have given us an acre of land at Frankston and we are anxious to get some kind of roof over our heads before it is too late. Now, I am refused the aid which would help us to pay the deposit, though, if my son had lived, he could have got the gratuity immediately for building purposes.

Honorable members will recognize the anomaly there. The regulations should be reviewed, so. that if the parents of a deceased serviceman desire to build a. home, they should be entitled to receive the gratuity immediately. The correspondent continued. -

What is the Government's interpretation of "necessity"? From 'my experience 1 would say that it means pauperism. Of what use will the money be to a homeless and jobless man of 68 in five years time?

When the financial statement deals in hundreds of millions of pounds, little matters of this kind, which concern only a few hundred people, should be adjusted at once.

I have shown clearly that the actual reductions of income tax do not measure up to the extravagant statements that have been made about them. In many instances, the reductions, particularly those which apply to a man with several dependants,' are very small. I have asked for a reduction of sales tax because, as honorable members on this side of the chamber predicted, reductions of sales tax increase .the volume of business and the Treasury does not lose revenue. The House should be informed whether Australia must pay the full price for surplus and derelict American aircraft here. I urge ako a reduction of postage. As the financial statement has so many deficiencies and so much information has been concealed from honorable members, it is obvious why the Treasurer has not presented his budget to the Parliament. Probably the right honorable gentleman considered that, in view of the approaching general elections, it would have been dangerous politically to bring down the budget at this juncture. I believe that, in fairness to the people, the budget should be presented before the Parliament adjourns. In my opinion, this financial ' statement is a sham, and an example of unfair electioneering. However, the people will see through the deception when their income tax assessments do not reflect the exaggerated account of the reductions. The people will insist upon greater reductions of tax, so that business and industry will be able to recover. Finally, those who want to work should be permitted to work, because the industrial troubles which have beset us have a bearing on tax collections. A fair statement of the public accounts should be made to the Parliament as early as possible. >

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