Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 3 June 1942


Senator J B HAYES (Tasmania) . - I shall support the second reading of the bill, but I reserve the right in committee to move amendments which will improve it. I regard the measure as war legislation. Its preamble reads -

Whereas, with, a view to the public safety and defence of the Commonwealth and of the several States, and for the more effectual prosecution of the war in which His Majesty is engaged, it is necessary or convenient to provide for the matters hereinafter set out . . .

The final clause limits its operation thus -

This act shall continue in operation until the last day of the. first financial year to commence after the date ort which His Majesty ceases to engage in the present war, and no longer.

Those provisions indicate clearly that it is a war measure. Their inclusion in the bill is one of the main reasons why 1 shall support it. I shall not vote against any proposal which might help in the more effectual prosecution of the war.

A good deal has been said, both in this chamber and in the House of Representatives, as to the constitutionality of this measure. Although eminent lawyers have expressed different opinions on this subject, we are entitled on the one hand to presume that the Government has received advice that it is acting constitutionally in bringing this legislation forward. On the other hand, we have heard legal opinions by eminent lawyers in which doubt is expressed as to the constitutionality of this legislation. The only point which I, as a layman, make is that the Government should satisfy itself beyond reasonable doubt that its proposals are constitutional. It does not need much imagination to visualize the result of this legislation being found ultra vires the Constitution after it has been in operation for, say, twelve months. Were that to happen, the result would be a state of chaos. If it has not already done so, the Government should take steps immediately to ensure that the Constitution is not infringed.


Senator McBride - The Government got as many " yes " men as possible to express their opinion.


Senator J B HAYES - On this subject, I speak as a layman. I should not be so foolish as to attempt to say whether one set of lawyers, or another set, is right. I have always had my own opinion about the Constitution; and perhaps this is the most appropriate time and place to express it. In my opinion, all doubt as to the constitutionality of this measure, and other measures in connexion with which doubt is raised, should be settled without recourse to law. Honorable senators have expressed some doubt as to what the High Court would decide if called upon to settle this question. I suggest that the High Court should be asked to settle that matter now. It should not be difficult to insert in the appropriate act - probably the Judiciary Act - a provision that, it shall be the duty of the High Court to determine the constitutionality of a measure of this kind before it is enacted.


Senator Crawford - That is what is done in the United States of America.


Senator J B HAYES - It should be done here. .Surely this Parliament has the power to determine what the functions of the High Court shall be. It is absurd that before we can say whether legislation is constitutional or otherwise, some one has to invoke the law. In order to test the validity of this legislation, a State must sue the Commonwealth. I know of nothing more stupid than that a State government, which represents the people, should be obliged to sue the Commonwealth, which represents the same people, in order to test the validity of legislation. "Whether a State, or the Commonwealth wins, the people must pay. What is the necessity for lengthy litigation in order to determine a question which could be submitted direct to the High Court for its opinion? Many cases of this kind have gone on appeal to the High Court, and the Privy Council ; and the proceedings have involved the parties in an expenditure of thousands of pounds. Is it not possible, after this legislation has received the Royal Assent, to submit it direct to the High Court for its opinion on its constitutionality ?

These measures can be improved in many respects. The Treasurer (Mr. Chifley) has estimated that the Commonwealth will receive an additional revenue of from £12,000,000 to £15,000,000 under this scheme. I have carefully examined the figures circulated by the Treasurer but I fail to see how that estimate will be borne out on the schedule of rates supplied to us. For instance, on an actual income of £1,000, the difference between the State tax and the amount of tax payable under this scheme in the respective States is as follows : - New South Wales no change, Victoria £12 more, Queensland £26 less, South Australia £31 less, Western Australia £11 less, and Tasmania no change.


Senator McBride - That is on a taxable income of £1,000 ?


Senator J B HAYES - No; an actual income of £1,000. I endeavoured to ascertain exactly what was meant by actual income. Actual income is the term used in the schedule of rates circulated among honorable senators. Averaging these alterations of the tax payable on an income of £1,000 in the respective States, I find that the Commonwealth will receive over all of the States £9 less in tax on each income of £1,000. Therefore, I fail to see how the Treasurer's estimate of an additional revenue of from £12.000,000 to £15,000,000 will be realized. I ask the Minister in charge of the bill to indicate clearly the basis on which that estimate has been made. I realize, of course, that the application of higher rates in Victoria will substantially favour that estimate; but even that factor does not reassure me that the Treasurer's estimate is sound.

The Government could very well have taken this opportunity to implement specific measures for the purpose of financing the war effort. Every individual in the community should be obliged to contribute towards the cost of the war according to his, or her, means. I believe that such contributions can best be handled by a scheme combining taxes and post-war credits, such as was propounded in what is known as the Fadden plan. It was pleasing to note that the last war loan was over-subscribed by £12,000,000. Naturally, we were inclined to flatter ourselves on that success; and we sincerely hope that the current war loan will be equally successful. The fact remains, however, that comparatively very few people subscribe to war loans. The record number of subscribers, recorded in the last war loan, was approximately 250,000. That number represents a very small percentage of the total number of persons who can reasonably be expected to subscribe to war loans. That number should be at least doubled. I have not the slightestdoubt that the Fadden plan of postwar credits would have met with the approval of a majority of people in the lower income field. I have gained that impression from conversations which I have had with many workers whom I know. Many of these men live frugally, and their wives are constantly working for the Red Cross, and other patriotic organizations. When they have a few pounds to spare, they immediately make donations to patriotic funds, or buy a £10 war bond. They do everything within their power to assist the war effort. At the same time, hundreds of thousands of people, who are much better off, make no contribution whatever for the purpose of helping our war effort. They spend everything they can get their hands on. It is not fair that one man should contribute all he can spare to help the Government finance the war effort, whilst another person in exactly the same economic circumstances, makes no contribution whatever to assist the war effort. Whilst one person is doing his level best all the time, the other person does nothing. The only way to spread the burden fairly over all classes of the community is to implement a scheme, such as the Fadden post-war credits scheme, whereby the money will be taken by the Government at its source, and held in trust for contributors until after the war. I feel sure that any thoughtful person will agree to such a scheme. Whilst I do not think that this war will be followed by so serious a depression as occurred after the last war, economic conditions will naturally be such as to make these war credits very welcome to contributors, and will help to tide them over the bad time which must follow the present heavy expenditure. Australia's national income was estimated a few years ago at approximately £900,000,000. Allowing for economic development which has taken place in the meantime, it must now be over £1,000,000,000 annually. At the same time, we shall require about £400,000,000 annually to finance this war. Surely we can raise that money if every one does his best. Whatever special means are adopted for raising revenue for war purposes, the system of floating loans can still be continued, as an avenue of investment for many people who can well afford to invest their money in that way. I repeat that if every one did his, or her, fair share we should have no trouble at all in financing the war.

The bill contains several anomalies. I fail to understand why the amount of compensation to be paid to New South Wales is nearly two and a half times greater than that to be paid to Victoria. The amount to be paid to Tasmania will not be sufficient to enable that State to meet its requirements, although, through the representations of the Tasmanian Premier, the amount originally proposed to be paid to Tasmania has been increased by £77,000.


Senator McBride - Is the honorable senator suggesting that that was Tasmania's price for its acquiescence in this scheme ?


Senator J B HAYES - No. I have no doubt that the Premier of Tasmania put up such a good case that the Commonwealth was impelled, in justice, to make available the extra amount. I feel sure that after the scheme has been in operation for some time, Tasmania will be enabled to secure further adjustments through the Commonwealth Grants Commission. I shall support any move to embody a system of post-war credits or any other means under these proposals, in order to ensure that every one will be obliged to contribute according to his ability towards the war effort.


Senator Sampson - This is a uniform income tax measure.


Senator J B HAYES - I have no doubt that some scheme similar to this will be continued following the war provided we are able to improve it in the meantime and thus win the support of the people for it. However, this measure itself will lapse a year after the war ends; and should it be desired to implement a scheme along these lines, it will be necessary to enact entirely new legislation for that purpose. All of us accept the principle of uniform income taxation.


Senator McBRIDE (SOUTH AUSTRALIA) - This hill is supposed to be a uniform tax bill.


Senator J B HAYES - It has often been said that the title of a bill is designed to conceal its real purpose. However, I am not entitled to say that the Government does not mean what it says on this occasion. I am prepared to take the bill at its face value. At the same time, I think that honorable senators on this side would have brought down a much better measure had they had the opportunity to do so.







Suggest corrections