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Thursday, 13 November 1941

Senator GIBSON (Victoria) .- I shall not discuss the budget in detail, because I shall have an opportunity to do that, when the bills necessary for the implementation of the budget are submitted to us. The Government has the heavy responsibility cast upon it of putting into operation a budget providing for the largest expenditure that Australia has ever faced. In 1929, when the Minister for Trade and Customs (Senator Keane) was a member of the Opposition, he stated that, the Bruce-Page Administration, knowing that a. depression was coming, purposely handed over the baby of government and placed it on the lap of the Labour party. The honorable member for Henty (Mr. Coles) Has now caused that baby to be handed over again to the Labour party, which has adopted it, and whose duty it is to see that the infant is properly cared for.

I give to the present Government credit for the way in which it is telling the people what has been done throughout the length and breadth of Australia in expanding our industries. The Prime Minister (Mr. Curtin) has pointed out the great preparedness of this country for defence, should it be invaded. The Minister foi- the Army (Mr. Forde) has also drawn attention to the immense volume of work that has been done in the various railway workshops, in the annexes to private factories, and in the other establishments in which munitions of war are being produced. We have heard a similar story from the Minister for Munitions (Mr. Makin) and other members of the Government. All this is a great compliment to the Menzies and Fadden Governments, which laid the foundations for the present war effort. A few weeks ago, on the railway which passes my property in the electorate of Corangamite, I noticed a special train containing over 50 trucks of Bren gun carriers. The previous Government was too modest to tell the people of Australia about the quantities of war materials that had been produced. The day before yesterday, betwen Melbourne and Canberra, I saw another train on which there were 36 Bren gun carriers and 20 armoured vehicles. I recently visited a country workshop in order to have my motor car greased, and the proprietor told me that he could not attend to my requirements because he was busy making munitions. He said that his small workshop was now a factory and was turning out 4,000 articles a week for the Government. He added that he had nine months' work ahead of him. This change-over from peace-time to war-time activity is to be noted in all parts of Australia, but the Menzies and Fadden Governments did not tell the people the whole story. The present Government is deserving of credit for having satisfied the people that great work is being accomplished. " The

Battle of Corangamite " referred to by Senator Brand took place in the neighbourhood of my property, and, in one section of the district alone, there were 600 army vehicles. The people of the western district of Victoria had not imagined that there were so many army vehicles in the whole of Australia. Australia has done well in its production of war equipment for it started from scratch. The more industries cun be extended to country districts the better it will be.

An effort is being made to raise a war loan of £100,000,000, and it is the duty of every person in the community to put as much money as possible into that loan, but I am afraid that the Government is hampering the war effort by imposing inequitable taxes on a certain section of the community. On war industries the Government proposes to limit profits to 4 per cent. I point out that there is tremendous risk in inaugurating industries for the manufacture of war requirements, because, as soon as the war is over, the establishments will be closed and the machinery will be practically valueless.

Senator Ashley - Many of - the factories are using machinery provided by the Government.

Senator GIBSON - The annexes and many engineering works are, but not country motor garages. It would be reasonable to allow the writing off of a reasonable sum for depreciation in respect of the machinery in the private establishments in the country.

Senator Ashley - The previous Government expended millions in machinery for the use of private enterprise.

Senator GIBSON - That, plant was installed in the annexes to factories. If that hud not been done, the war effort would have been greatly reduced.

As I have already said, the taxes proposed by the present Government will hamper the war effort. People do not know what they will have to pay in taxes. Senator Brown made it clear that the Government proposes to ask only 30 per cent, of the people to pay additional taxes. That is not right. Every person in the community and every method of taxation should yield an additional amount towards the war effort.

Senator Cameron - The people generally are paying already.

Senator GIBSON - Some of them are not paying .as much as they ought to pay.

Senator Cameron - "Would the honorable senator tax the man on the basic wage?

Senator GIBSON - He should pay something, even if only 5s., and I believe that he would gladly do so. The Government proposes to exempt altogether from taxation £560,000,000 of income, as Senator Spicer pointed out yesterday. That is wrong. It is possible for a man to be called upon to pay more in taxes than his income. Persons in receipt of incomes between £400 and £1,500 will be exempt from additional taxation. That should not be. These people are prepared to pay a little more than they have paid in the past. In striking contrast to that section persons with incomes of £1,500 a year and upwards will be taxed very heavily. Indeed, as Senator Spicer pointed out yesterday, if the whole of their income were taken from them the Government would not obtain all of the money that it requires. Those are the people who would put money into war loans, but they cannot do so if they are i:o be taxed heavily. They cannot contribute practically the whole of their income in taxes and also subscribe to war loans.

There has been a tremendous expansion of industry in Australia, but the Government is acting wrongly in limiting to 4 per cent, the profits allowed to war-time industries. I hope that it will reconsider this matter and give to the people concerned permission to write off the value of machinery which will become obsolete as soon as the war is over.

I come now to the subject of duplication of taxation. Before the introduction of the present budget the incomes of a husband and wife and their children were treated separately, but it is now proposed to bulk the taxable incomes of husband and wife, and of their children also in oases of trust estates. In many instances, the wife had an income before her marriage. Why should that income be added to that of her husband (or taxation purposes? I agree that the Government is entitled to bulk incomes where attempts to evade the payment of taxes are made. If, for instance, a husband ha? handed assets over to his wife in order to escape the payment of tax some action to meet the case is justified; but the Government is not entitled to tax income which a wife had before her marriage. The proposal to bulk taxable incomes of children in a trust estate with the incomes of their parents may mean lifting the rate of tax to a much higher point than if the incomes were treated separately.

I have no objection to the invalid and old-age pension being raised by la. 6d. a week, but actually the Government's proposal will not raise the pension by 3d. a week. The Labour party professes to be opposed to indirect taxation, but the Government proposes to impose indirect taxation which will take from the invalid and old-age pensioner more than his additional ls. 6d. a week.

Senator Collings - There is no sales tax on the necessaries of life.

Senator GIBSON - What about the excise on the pensioner's beer and tobacco ?

Senator Collings - I said that there is no sales tax on the necessaries of life.

Senator GIBSON - I say that the necessaries of life will be taxed under the Government's proposals. When .wages rise it is impossible to hold prices. Wages have risen since the war began, and in consequence prices must rise. The process cannot be stopped. I put it to the Minister for Trade and Customs (Senator Keane) that the Government is asking the retail grocer to sell matches at 8d. a gross less phan he pays for them.

Senator Amour - That shows the mess that the Prices Commissioner has made of price-fixing.

Senator GIBSON - The mess has been made not by the Prices Commissioner but by the Minister. Professor Copland knows too much about price-fixing to make a mess of things.

Previously there was an exemption of £5,000 in respect of federal land tax. I know something of this subject. Although a man may have a mortgage on his property amounting to 50 per cent, of its value he still has to pay land tax on its unimproved value. Even if he meets with drought conditions he still has to pay the land tax, although he may have lost money.

Senator Cameron - And he still has to pay interest on the mortgage.

Senator GIBSON - That is so. Now the Government proposes to put an extra 20 per cent, on the land tax in respect of properties the unimproved value of which is over £20,000. That is unfair. I do mot know whether it is the intention of the Government to aggregate the value of land held by a husband and wife for the purpose of land tax, but I think that that is its intention. I should like the Leader of the Senate to say whether it is or not.

Senator Collings - The Government's proposals in respect of the land tax are not so heavy as was the tax before a previous government unwisely reduced it.

Senator GIBSON - The present Government has unwisely increased the tax.

Senator Collings - It merely proposes to get back some of the tax which a previous government took off.

Senator GIBSON - Under this combined income scheme a man with a large income, plus the income of his children, might have £45,000. I am stating a hypothetical case. The taxpayer is allowed as a deduction £5,000 paid as land tax. 'That makes his taxable income for income tax purposes £40,000. The income tax that he has to pay on that income amounts to £35,153. When the £5,000 paid as land tax is added, it will be seen that the total is £40,153, or £153 more than his taxable income

Senator Collings - The honorable senator's figures are wrong.

Senator GIBSON - They are not wrong; they were compiled by the Taxation Department.

Senator Collings - He would have about £10,000 left.

Senator GIBSON - He would have £4,847 left.

Senator Collings - The Government is not crying with sympathy for a man who has that much left. It is not what is taken from a man, but what he has left, that really matters.

Senator Aylett - If he has £4,847 left, he is better off than an old-age pensioner.

Senator GIBSON - That man has probably put £50,000 into war loans, but he will be compelled to place his bonds on the market and realize on them in order to pay his taxes.

Senator Collings - If we do not win the war, he will not have anything left.

Senator GIBSON - I do not think that any previous budget has summed up in five lines a government's proposals in connexion with rural industries. The only reference in this budget to rural industries is a short paragraph in which the Government says that it will consult with the State governments with a view to dealing with men in marginal areas. I tell the Government that it will never succeed in shifting farmers from the marginal areas. They will not leave the land. No one knows that better than you do, Mr. President. Farmers who have one good season are prepared to stay on the laud for ten seasons. Most of the men in marginal areas have had one good year, and they will not allow themselves to he forced off their holdings.

I have consistently opposed the limitation of production because I believe that the principle is wrong.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Production will limit itself.

Senator GIBSON - That is the proper way. I hope that the present Government will see that men who planted wheat before the last scheme was proposed will be given an opportunity to sow the same area as previously. Under the scheme now in operation they are not permitted to plant wheat on land which has not been licensed as a farm. Farms should never have been licensed. If licensing be necessary, the growers should be licensed and limited to the area that they sowed previously. That would have limited production.

Senator Allan MacDonald - What would they have done with their surplus wheat?

Senator Collings - Ships are not available to take away the surplus.

Senator GIBSON - Nature has its own way of meeting such contingencies. I remind honorable senators that this country is subject to droughts.

I should like the Government to close all non-essen'tial industries, .of which there arc scores in this country. In some Melbourne and Sydney shops there are hundreds of girls and scores of young men selling luxuries. Those employees should be somewhere else.

Senator Cameron - How would the honorable senator classify luxuries?

Senator GIBSON - -There is a long list of luxuries in the schedule to the sales tax legislation. The people employed in these non-essential industries should be taken out of those industries for the duration of the war and put into places where they would be of service to the country.

Senator Collings - If that were done what would happen when the war ended ?

Senator Cameron - That has not been done in England.

Senator GIBSON - The idea of having reserved occupations is wrong. Many persons are sheltering in reserved occupations. The greatest reserved occupation is service in the PostmasterGeneral's Department. In many country districts there are young men in post offices who should not be there; at least they should be receiving training in military camps.

Last night Senator Foll referred to criticism, of the Department of Information. I wish to make it clear that I have not criticized that department, although I did give to the honorable senator, when he was Minister in charge of the department, certain information which was given in evidence before the Joint Committee on Broadcasting. I gave to the honorable senator the views of other persons whose opinions were based on knowledge. I was not a critic of the department.

Senator Foll - I did not say that the honorable senator had criticized the department.

Senator GIBSON - That does not mean that I shall not be a critic of the department; but if I criticize it, my criticism will be in relation to its broadcasting service to places outside Australia. When the committee's report comes hefore the Senate I shall avail myself of the opportunity to express my views on that subject.

Senator Brandreferred to the activities of the Volunteer Defence Corps. This body recently did extraordinarily good work in the western district of Victoria. Although the recent mock " battle of Corangamite " extended for 150 miles, I believe that every bridge in that area was protected by members of the Volunteer Defence 001'ps. They did a remarkably good job. Their achievements show what organization in peacetime will do, and how valuable a little training is in preparing men for possible happenings.

I hope that the Government will amend its budget in many respects. There is ample room for amendments which will distribute the burden more equitably among all sections of the community.

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