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Wednesday, 4 August 1926


Senator MILLEN (Tasmania) . - Generally speaking, I: agree with a great deal of what Senator Barwell has said. The majority of the people of Australia anticipated that the budget would announce substantial reductions in 'their income tax. One form it might have taken, was. a return to the taxpayers of the surplus piled up in the fiscal year ended the 30th June, 1926. The people had frequently read in the newspapers statements to the effect that the Customs and excise revenue was largely exceeding' the expectations of the Treasurer (Dr. Earle Page), and the Minister for Trade and Customs (Mr. Pratten) ; and when the budget was presented they were sorely disappointed by the discovery that notwithstanding' these bounding revenues, no proposal was made to reduce the income tax. There was an accumulated surplus at the 30th June, 1925, of £3,108,529., and the surplus at .the 30th June,' 1926, is shown as amounting to £286,-944'.- The majority of the taxpayers feel that something should be done in the direction of reducing taxation. They naturally inquire whether the cost of government has increased to> such a material extent as to reduce the accumulated surplus from the previous year, which was over £3,000,000, to the comparatively small sum of £286,944 at the end of June, 1926. They ask where the money has gone. After perusing the budget carefully it is found that nearly £5,000,000 was transferred ' to trust funds from the actual surplus of 1924- 25, and from the anticipated surplus for 1925-26. The amounts transferred from the surplus for 1924- 25 were: - For naval construction, £1,500,000; main roads development, £750,000; scientific and industrial research, £100,000; and prospecting £100,000, making a total of £2,450,000. It appears that the Treasurer, seeing that there was a. prospect of an overflowing Treasury, determined that further sums should be allocated to trusts funds in anticipation of a surplus for the year 1925- 26. The following further .sums' were therefore transferred: - For naval construction, £1,000,000; scientific and industrial research, £250,000; air services, £250,000; and for debt redemption, £1,000,000, making a total of £2,500,000. The grand total of the sums transferred to trust funds in 1924-25 and 1925-2&, is £4,950,000. Turning to the expenditure, as set out in the budget, we find that it includes £52,384,247 for the ordinary operations and routine services of the Government; £8,704,252 for payments to States; £387,096 to. cover deficits from the operation of business activities; and £343,251 for deficits on Commonwealth Territories, making a total expenditure of £61,818,846. The revenue account is £58,996,261, leaving a deficit as shown by .the Treasury, of £2,822,585. But it will be noticed that no credit has been given for any of -the transfers to trust funds. The actual, surplus for the year, allowing for the amounts credited to trust funds, is found to be £2,127,415, and the accumulated surplus brought forward is £659,529, making a total of £2,786,944. . If we deduct from . that total the amount of £2,500,000 which ' was transferred, to trust funds from the surplus for the year 1925-26 we arrive at the Treasurer's balance of £286,944. .

It is interesting to make a comparison of the Federal taxation raised, in the last two years with that proposed to be levied in the current year. The figures are as follow : -

At first sight there appears to be a big reduction in estate duties and land tax but on closely examining the position, one finds that only a change of taxing masters is proposed. No reduction in 'taxation has taken place. When the people of Australia hear of .the, overflowing coffers of the Federal Treasury, and realize that year after year no proposal for a reduction of taxation is made, they naturally ask themselves whether the huge Federal surpluses are due to excessive economy or to over-taxation. They do not' imagine for a moment that itis due to an excess of economy. The firmly rooted belief in their minds is that the Federal surplus represents the product of excessive taxation, from which they should be given some relief. The enormous revenues of the Commonwealth are due entirely to the exertions and business acumen of the people, and they observe that this gross political spending is brought about only by that real development which taxpayers create, despite the heavy drain for taxation purposes. The Sydney Morning Herald, I think, described the budget as a deliberate attempt to exaggerate expenditure and under-estimate revenue for the purpose of creating a feeling that the Customs revenue was not sufficient to cover the Commonwealth expenditure.


Senator Pearce - Does the honorable senator think that it is?


Senator MILLEN - I do not say that I do; but I shall deal with that point later. I realize that the Commonwealth Treasury officials have many difficulties to overcome in preparing their estimates. There are a number of Commonwealth public works to be carried on, such, for instance, as the Murray River waters scheme, in respect of which the estimated cost is often exceeded. The estimated cost of that work has been doubled Then we have the Grafton to South Brisbane railway. Before that work had proceeded far, the estimated cost was increased by £500,000. We also have the works at Canberra, which may be likened to a capacious maw into which the. Commonwealth can empty many millions of pounds without satisfying the necessities of that enterprise.


Senator Thompson - Will it not pay eventually?


Senator MILLEN - I am not worrying about whether the Federal Capital will pay in 200, . 500 or 1,000 years. We shall not be here then.


Senator Thompson - Does not the honorable senator think that it will pay in 50 years?


Senator MILLEN - No. I come now to the subject of the proposed withdrawal of the per capita payments. Senator Barwell dealt with the matter largely from the point of view of the early history of the Federal movement, and the events that preceded its consummation. I am totally opposed to. the withdrawal of the payments. We should realize that while the Commonwealth has a domain in which it has to incur considerable expenditure, the States also have large financial commitments, and if the per capita payments are withheld, the State Treasurers will be seriously embarrassed. . I am speaking particularly from the point of view of the Treasurer of Tasmania. The States have to raise by way of taxation the revenue required to carry on their respective systems of organized government. They have to provide the police force required to maintain the public peace. They have to deal with public health and education. An ever increasing sum is required for educational purposes. They have further to provide for a State judiciary, and all the institutions that are vital to modern civilization. In short, they have to supply nearly all our public utilities with the exception of the Postal Department. These services cannot be carried on without substantial revenues. I have heard it said thatno moral obligation rests upon the Commonwealth to pay the surplus revenue to the States, but I contend that there is a very material obligation upon it to do so. Prior to federation Tasmania derived 74 per cent. of her total revenue from the Customs House. When she entered the Federation she necessarily vacated the field of Customs taxation; but she, in common with the other States, certainly anticipated that she would have returned to her by the Commonwealth a substantial proportion of the Customs and excise revenue.


Senator Sir Henry Barwell - The people of Tasmania would not otherwise have agreed to Federation.


Senator MILLEN - Quite so. Tasmania, having handed over her Customs revenue and placed an over-lord, in the shape of the Commonwealth Government, over her, is now told that she can raise her revenue by imposing direct taxation. Is that fair? When the Federal convention was held in 1897-98 -

I refer particularly to the sittings of the convention at which the question of finance was dealt with, the whole Federal scheme was very nearly wrecked, because the representatives of the States could not come to a definite understanding as to what was to be returned to the States.


Senator Sir HENRY Barwell - The Braddon clause saved the situation.


Senator MILLEN - Yes.


Senator Guthrie - The Braddon " blot."


Senator MILLEN - It was so described at the time; but no one could suggest a substitute for it. What is the position that now confronts Tasmania? It is contended by some that there is no moral obligation on the part of the Commonwealth to return to the States any part of its Customs. Lean only say that had there not been an understanding on the part of Tasmania that she would be refunded a portion of the revenue received from Customs and excise duties, she would not have joined the Federation. An express provision for the return to the States of a portion of the Customs and excise revenue for all time was not inserted in the Constitution, for the reason that while several of the States imposed protective duties, New South Wales was a freetrade State. I appreciate the difficulties which confronted the framers of the Constitution in forecasting the probable position in subsequent years. To have made the Constitution rigid, in this respect might have presented great difficulties. But I remind the Senate that when Mr. Deakin was dealing with the per capita payments in 1909 he felt, as did others, that the spirit underlying the financial bargain made in establishing the Federation was that a considerable amount of the Customs and excise revenue should be returned to the States. He then said -

There is no power on the States' part to raise Customs and excise revenue, but a right to share in such revenue, originally for all time, and under the Constitution finally passed, for ten years.

The States are now being told that they can raise money by imposing further direct taxation.


Senator McLachlan - At that time, the Commonwealth had not entered the field of direct taxation to any great extent.


Senator MILLEN - That is so, and that is the reason why nearly every honorable senator who has spoken has stated that the per capita payments were to be made from revenue derived from Customs and exicse duties. At that time there was no Federal income taxation, and only a small amount was received from land taxation. Were the proposal of the Commonwealth Government to vacate the field of direct taxation altogether, the position would certainly be improved; but it is proposed that the Commonwealth shall vacate that field to the extent of only 40 per cent. Forty per cent, of the income tax payable by individuals resident in Tasmania would, according to the Treasurer's figures, be £80,629. A number of Tasmanian members of Parliament, being seriously concerned about the position, approached the commissioner of taxation for Tasmania, who informed them that that amount could not be obtained from a 40 per cent, tax on the incomes of persons resident in Tasmania. It would be insufficient to make a bald statement of that nature without figures to substantiate it. I have the figures. I asked the following question of the Minister representing the Treasurer on the 30th June last - '

1.   What were the total taxable assessments of income within the State of Tasmania, exclusive of central office figures, for each year from 1920-21 until 1924-25, inclusive?

2.   What were the total taxable assessments of income for the State of Tasmania by the central office for- those years?

His reply was -

1.   Excluding the lottery tax, the amounts are -

 

2.   The assessments of income for the State of Tasmania by the central office are not available, as taxpayers who furnish their returns to the central office are not required to show separately the income for each State.

The best mathematician among us could not prove that 40 per cent, of £156,733 is £80,629; it is only £62,693. As a matter of fact, the Commissioner of Taxation in Tasmania says that the amount derivable from a tax on the incomes of persons resident in that State would not produce more than £105,000, in which- case 4.0 per cent, would only be about £42,000. Honorable senators will, therefore, see that if the Treasurer of Tasmania accepted the figures of the Commonwealth Treasurer, he would be in a serious position at the end of the year. Unless the State Treasurers are given a much longer period in which to make adjustments, they will be faced with serious difficulties in preparing their budgets. The Commonwealth Government proposes to allow a period of only one year. No State Treasurer can budget properly unless he knows some time beforehand what amount he is likely to obtain from the Commonwealth. He knows approximately what, his revenue from State

 

taxation will be, but when he has to depend upon the Commonwealth the proposition is very doubtful.


Senator Payne - If adjustments were made over a period of five years, would that meet the case?


Senator MILLEN - A period of five Tears would certainly be better than a period of only one year. It has been said that Tasmania would be very much better off under the Treasurer's proposals than she would be if the per capita payments were continued. Let us, in this connexion, consider the decline in Tasmania's production since 1901. The following table shows the amount of production per head of population in each State and in the Commonwealth, as a whole, for the years 1901, 1914, and 1923-24:-

 

The trouble with Tasmania to-day is that her production, per head, is not being maintained. It is only 73 per cent, of the production, per head, of the Commonwealth as a whole. As estimates of taxation are usually based on production, honorable senators will see from the figures I have submitted from the Treasurer, the reduction that has taken place in the assessments since 1920-21, and, therefore, how serious is the position of that State. In 1901, the gold produced in Australia was valued at £21,816,772 or nearly 20 per cent, of the total primary production of the Commonwealth. By 1923-24, that production had decreased to £3,143,824. or less than 1 per cent, of the total. Tasmania has been seriously affected bv that reduction.

I desire now to refer to the Government's housing proposals. The Treasurer, in his budget, stated -

The question of the housing of the people affects the comfort and well-being of the individual, and the efficiency of the individual is necessary to the national welfare and progress.

That is true. History furnishes many examples of men who have impressed the world by their soundness of heart and moral worth - men who have improved the conditions of their fellows - who admitted that their influence for good was due to their early home training. The problem of dealing with slums and with the housing of the poorer sections of the community has always been a difficult one in Qld World countries. Between 1851 and 1914, many measures dealing with the housing of the people of Great Britain, were introduced into the British

House of Commons. Then came the great, war. A report issued by the International Labour section of the Geneva Convention shows that the housing problem has been acute throughout Europe since the war. It has been acute, too, in Australia, although, to some extent, the position has been alleviated by the work of the Repatriation Commission. The reason for the acuteness of the housing problem is that great numbers of persons who were on the land were attracted to the cities, which promised many inducements and high wages. Overcrowding iu cities was thus greatly intensified. Private enterprise could not meet the demand, and building costs to-day are practically double what they were in pre-war days. That means that rents are greatly increased. Honorable senators will readily understand that unless real wages also increased materially, the cost of housing was bound to become a serious problem in the lives of the people. The difficulty can be overcome only by means of a subsidy. The Government, like Dickens - that master painter of pen pictures, who was able to show how slum conditions affected the moral fibre of the people - feels that reform should first take place in the homes of the people. Mr. Fisher, late Minister for Education in Great Britain, said that bad housing and bad morals went together. With that statement I agree. I have here a table, which sets out the number of occupied private dwellings in Australia, New Zealand, the Union of South Africa and the United States of America -

 

The following is a comparison of the occupancy of private dwellings in the metropolitan areas with those outside those areas throughout Australia : -

It will be noticed that although the increase in the total number of dwellings during the period from 1911 to 1921 was . 24 per cent., yet the increase in the number occupied by owners and purchasers was 77 per cent., the increase in metropolitan areas being 83 per cent., and in extra-metropolitan areas 74 per cent. The following table shows the percentage of private dwellings in Australia occupied by owners who were employers or employees a* the time of the.. 1921 census ^

 

The percentage in the case of adult employees indicates what an opportunity there is for a workers' home scheme. In addition, females in Australia occupied 73,734 dwellings as owners. Of these females, 8,157 were employers, and 4,500 were employees. I have also had prepared a table showing what the States are doing in this very important matter of housing the people. It sets out the particulars thus : -

 

I may add that State and Commonwealth schemes for building homes for returned soldiers have been excluded from the above conspectus.


Senator Thompson - The Queensland Government cannot cope with the number of applicants for homes in that State.


Senator MILLEN - I have nothing to say on that point. My purpose in having these particulars epitomized was to show what the States were doing. I am in favour of the Government's housing scheme, but I do not believe in its method of financing it.


Senator Thompson - We have not yet had details of the Government's scheme.


Senator MILLEN - No; but it was referred to in general terms in the budget, and I am now dealing with it only in general terms. The Treasurer proposes to obtain from the Commonwealth Bank money for the housing scheme. I think I can point to a better source. The Commonwealth Government is committed to a scheme of national insurance. Senator Barwell said just now that no report had yet been received from the National Insurance Commission. The honorable senator was in error. A report was handed in to the Government on the 3rd March, 1925, and the Ministry, therefore, has had ample time to consider it.

Any scheme of national insurance must necessarily involve millions of pounds. The figures relating to the receipts and expenditure of the National Health Insurance Scheme in England, which I propose to put before the Senate, will, I am sure, surprise honorable senators, and will give them some idea of the amount of money that will be available for housing purposes when the Commonwealth adopts a similar system. They are as follow : -

 

The following figures showing the investment of the funds of the scheme make very interesting reading: -

 

I now direct attention to figures calculated from the national insurance scheme for Australia, drawn up by the royal commission and placed before the Government eighteen months ago, and which I submit might very well go hand in hand with the Government's housing scheme -

 

It willbe seen from these figures that a Commonwealth national insurance scheme would provide the Government with very considerable funds which could be used for its housing scheme. The figures used for administration costs were calculated on the same basis as in the British scheme.

I wish now to refer to the subject of Commonwealth standards, in connexion with which an association has been establishedby the Commonwealth Government for the purpose of bringing about economy in methods of manufacture. Great economic advantage can be obtained by standardization. Already about 20 different national standard associations have been established throughoutthe civilized world, andthese associations have done extraordinarily good work in bringing aboutreductions in the cost of manufacture. They can do even more than that. Employment can be stabilized, as the manufacturer in . periods of temporary trade depression can manufacture to stock', knowing that future orders will be for a standard product. The Standards Association of Great Britain was established in 1901, and has been in active operation ever since. In 1918 the Commonwealth Institute of. Science and Industry, under the old regime, endeavoured to introduce a system ofstandards for Australia. It called a meeting of engineers, manufacturers, and producers, at which it was unanimously decided that something should be done. Nothing, however, was accomplished until 1922, when the Institute ofEngineers was invited to take the matter up. This it did inFebruary, 1922, and in October of the same year the Engineering Standards Association was gazetted.I propose to give a resume of the functions of the association.

The Australian Commonwealth Engineering StandardsAssociation was founded as I have said; in October, 1922, when the appointment of members of the main committee of the association was gazetted. The main committee is constituted of three representatives of the Commonwealth Government, one representative of each of the State Governments, six representatives of the Institute of Engineers, Australia, three representatives of the Australasian Institute of Mining and Metallurgy, three representatives of the Australian Chemical "Institute. Subsequently the Associated -Chambers of Manufactures of Australia and the Associated Chambers of Commerce of the Commonwealth of Australia were each invited to nominate a representative. The objects of the association include inter alia: - (a)To prepare and promote the general adoption of standards in connexion with engineering structures, materials, matters and things and from time to time to revise, alter and amend the same. (b) To co-ordinate the efforts of producers and users for the improvement of engineering materials, processes and methods.

The functions of the main committee, in which the control of the association is vested, are as follows : -

(a)   To decide what standardization work shall be undertaken.

(b)   To approve the appointment of members of sectional committees, subcommitteesand panel committees to whidh the work of preparing specifications is entrusted.

(c)   To arrange for the carrying out of research work on the recommendations of sectional committees.

(d)   To receive and deal with the reports and recommendations of sectional committees.

(e)   To arrange for the publication of the specifications through a standing committee.

(f)   To keep in touch with Engineering Standards organizations in other countries.

(g)   To control finance through a standing committee.

(h)   To control the staff of theassociation.

The association does not undertake the preparation of standard specifications on its own initiative. When a recommendation is received from an interested party for the preparation of a specification for any particular product, material, or process, the project is referred to the association's State committees by which an exhaustive investigation is made as to the need of the proposed specification. The reports of these investigations are considered by the main committee, and if such consideration is favorable, a sectional committee is established to undertake the particular work involved. Every possible care is exercised to ensure that all interests concerned in the work of such a sectional committee are adequately represented in the personnel of the committee as finally constituted. Provision is made, however, to ensure that consuming interests shall predominate. Sectional committees may appoint sub and panel committees to. consider . special, phases of the work under review, and in these instances the conservation of interests must be also provided for.

The reports of sectional committees in due. course are submitted to the main committee and if approved, are published as tentative standards. The main committee does not concern itself with the technical details of a standard, but considers the procedure followed in the. formulation thereof, the adequacy of the representation of interests concerned, and the action by which the standard was adopted by the sectional committee. Standards are published in " tentative" form for a period of twelve months, to enable recommendations for their amendment resulting from their use during this period to be submitted for consideration when reviewing the specification with a view to its publication as an Australian standard.

These Australian standards have been very largely adopted by employers and employees, manufacturers, and producers, and are to-day being extensively embodied in various college text-books. The University authorities have also appreciated the work done by the standards committees, and have decided to include its standards in their text-books. Summarizing the position, it may be claimed that benefits accruing under standardization include the following : - From the point of view of the manufacturer, less capital is tied up in raw material, stock, jigs, and templates, storage space, repair parts, &c. More economical manufacture is assured through increased production, less idle equipment, reduced overhead charges, elimination of waste in experimentation and design, greater ease in securing raw materials, and so on; more efficient labour and better service to the trade in supplying better quality of product with more prompt delivery; more efficient sales force; increased rate of turnover; easier financing; and fewer stoppages of work. The retailer benefits by the increased rate of turnover, decreased capital investment in stock and storage space, reduced stock depreciation, decreased overhead charges, and better service at lower prices, with quicker and more reliable deliveries. The consumer gains in the opportunity to obtain a product of improved and guaranteed quality at a lower price, with better service in the way of prompt deliveries.

One of the most important functions that standardization can perform to-day is the building up, on a national interindustrial basis, of a consensus of expert opinion in regard to the inter-relations of industry and the relations of industry to the public. Standardization thus leads to the realization of economy in a very large measure. It constitutes an important economic factor for both producer and consumer, and, if it should result in increased efficiency in trade and industry, it is indeed a matter of moment to public economy.


Senator Thompson - Will standardization interfere with the production of articles of the best quality?


Senator MILLEN - No.


Senator Thompson - It may ensure efficiency; but is it not possible that it may interfere with the production of articles of the highest standard?


Senator MILLEN - No. Honorable senators are aware that there are in Australia, in connexion with electrical systems, a great many voltages, frequencies, and different types of machines all performing similar classes of work. If manufacturers have to keep the templates, patterns, and other paraphernalia necessary to the manufacture of machines of a variety of designs, the cost must necessarily be greater. But if the engineer, manufacturer, and user confer in the preparation of the specification of a machine that will meet all requirements, there can be no loss of efficiency. The Australian Standards Association does not say to a manufacturer, " Here is our specification ; you must either accept it or reject it." Under the procedure adopted by it, a specification which has been considered and prepared by experts in the particular branch concerned, remains for twelve months as a tentative specification, and if, at the end of that period, no objections have been raised, it becomes the Australian standard specification. [Extension of time granted.] For the information of the Senate, I submit the following table showing the number of sectional committees of the Engineering Standards Association that have been formed and the number of specifications published by them and approved for issue: -

 

I desire now to make a few observations upon the Council of Scientific and Industrial Research. I am exceedingly pleased that the Government took steps to reorganize the Institute. Very eminent gentlemen have been appointed to the Council, and a considerable amount of excellent work can be anticipated. The Estimates make provision for certain expenditure under separate headings, of which an example is " Stock diseases and pests - investigation, including cattle tick, buffalo fly, £5,400." The total estimated expenditure is £35,300. I should like the Minister (Senator Pearce) at a later stage to supply details indicating the manner in which those figures have been made up. I sincerely trust that it is not the intention of the Council to publish bulletins written in a manner that does not appeal to the average farmer. I desire the Council to follow the example which has been set by a big experimental station in England, by indicating practically what can be produced, the extent of the production, and its probable cost. Applying a simile that has been employed by an economist in the United States of America, "The national table is wobbling." His illustration consisted of a table, on one end of which were secondary industries, and on the other end primary industries. The former were well stabilized by Customs duties, arbitration courts, and other aids to industrial stability, but there were no legs at the other end of the table bolster ing up the primary industries. This Council, however, can bolster them up. I know that the Prime Minister (Mr. Bruce) is very anxious that action should be taken to assist Tasmania, and I sincerely trust that the Government will take steps to that end. In the earlier portion of my speech I referred to Tasmania's production, amounting to only 73 per cent. of the production per head of the Commonwealth as a whole. That position can be rectified by the Council of Scientific and Industrial Research. It is, in my opinion, necessary to establish experimental plots in Tasmania to educate the farmers, agriculturists, and pastoral- ists as to what it is possible to produce. I am perfectly well aware that the Council has not the equipment necessary to undertake the work which falls within some of the items that appear in the Estimates. I trust that the figures are included, not merely as an eye-wash, but as an indication that the Government is extremely anxious to aid primary and secondary industries. It is within its power to do so, particularly in the State that I have the honour to represent.







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