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Tuesday, 11 April 1961

The CHAIRMAN - Before I call the honorable member for Port Adelaide, I should like to point out that this bill is not concerned with the reduction of the rate on private motor cars from 40 per cent, to 30 per cent- That will be covered in the resolution before the Committee of Ways and Means. Previously, the House debated the bill and the resolution together. This bill is concerned mainly with motor vehicles of a kind used for commercial purposes; motor cycles, auto-cycles, motor scooters, and side cars and side boxes for attachment to those goods; and parts and accessories and the like. The reduction of the rate on private motor cars from 40 per cent, to 30 per cent, will be dealt with in the resolution which will be before the committee at a later stage.

Mr Crean - The question with which we are concerned is the date of operation.

The CHAIRMAN - That is so. The date of operation of the reduction of the rate on private motor cars from 40 per cent, to 30 per cent, will be dean with in the resolution.

Mr. THOMPSON(Port Adelaide; [3.34]. - Mr. Chairman, I shall bear in mind what you have said and I hope that 1 shall not be out of order. When 1 was speaking to a big motor dealer in my district recently, he said that these continual changes involving the imposition of additional tax at one time and the removal of the additional tax a short time afterwards had put the dealers in a position in which they did not know where they stood. 1 told him that the increase of about £75 or £80 on a Holden motor car as a result of the additional 10 per cent, of the sales tax would not stop a person from buying a new car so much as the effect of the credit restrictions would stop him,. The dealer said: " But he does not have to pay that. We will increase our trade-in allowance on the good second-hand car that he turns in as part payment. We will give him perhaps an extra £50. So he will have to pay only about £30 more. When we sell the car which he has traded in, we shall get back the extra payment that we have made in respect of it. But we are now in a position in which we cannot get back the extra £50 on a car which we took in before the rate of sales tax was reduced, and we shall lose approximately £50 on each such car. As a result, we have had to write off several thousand pounds. This situation is brought about by continual changes almost from day to day."

Another person told me of his experience as a private seller of a car. He had intended to sell it for a certain amount, and when the rate of sales tax was increased, he raised his price accordingly. The car that he was selling was almost a new one. He told me recently that the sales tax rate had been reduced just too late to help the person who bought the car from him and that the purchaser had paid him the additional amount above the original price for which the owner had intended to sell the car. The seller of the car said to me, " Had the rate of sales tax been reduced two or three days previously, I would not have made anything more out of the sale, and the man who bought my first-class second-hand car would have saved about £75 ".

I am not arguing at the moment about the alteration of the rate from 40 per cent, to 30 per cent., but only about the date from which the reduction shall operate. For the sake of that argument, this bill and the other one which you, Mr. Chairman, have mentioned are similar. If we pass this bill as it stands and set the date of operation at 22nd February, 1961, we could not consistently oppose the fixing of the same date of operation for the other bill at a later stage. It is all very well to say that we shall deal later with the alteration of the rate on private cars from 40 per cent, to 30 per cent. In the circumstances, I ask that the amendment proposed by the honorable member for Melbourne Ports (Mr. Crean) on behalf of the Leader of the Opposition (Mr. Calwell) be agreed to. The Treasurer (Mr. Harold Holt) stated that this amendment, if agreed to, would require refunds to be made, and apparently he has made up his mind that the Government cannot make refunds. I make no bones about it: That is what I think is behind this. The intention is to give back to those who paid it the additional tax that was paid. That can be done only if the date of operation of this bill is taken back to the date in November last on which the rate of tax was increased, as is proposed in the amendment. I trust that the Treasurer will consider the matter further.

The right honorable gentleman said that the action sought by the Opposition would create a precedent. I say to him that precedents have been established before. I recall an occasion when Australian National Airways Limited owed quite a large amount of money and we passed a measure to relieve it of the obligation to pay nearly £500,000. That was done to benefit one company. When the Government and its supporters talk about retrospective legislation, they ought to realize that retrospective legislation has been enacted in the past to benefit certain people that the Government considered should be benefited. I think similar action on this occasion would be only fair and just.

I do not know whether the Treasurer has kept in mind that a lot of people who paid the additional tax only to see the rate reduced soon after will wait in future before purchasing anything, if they consider that there is any likelihood of a reduction in tax rates. If, as the Minister stated, the Government felt that it had achieved what it wanted by reducing the sales of motor vehicles and the amount of labour employed in the motor industry, why does it want to keep the money that it collected in respect of the additional sales tax? It could say: " We have done what we wanted to do. We do not want to make a profit out of it and we shall give back to those who paid the additional tax the money to which they are justly entitled." I realize that when money is collected to enable a government to run the country's affairs, that money cannot be disposed of willy-nilly, but the Government ought to acknowledge the fact that justice not only should be done, but also should appear to be done.

A man came to show me his new car, and while he was showing it to me, saying that he had obtained it that afternoon, a neighbour came out and said, " I have just heard on the wireless that the sales tax is to be reduced from to-morrow morning ". Do you call it justice, after a responsible Minister has said that the increased sales tax is to be continued, for people to be mulcted in that fashion? If the Minister had said, " The Government is going to consider the matter ", this man, and others in like circumstances, could have waited another week or so. The Minister gave less than justice to people who, on the basis of statements made on behalf of the Government, and by the Treasurer himself, that there was no likelihood of the tax rate being altered, went ahead and bought vehicles. I do ask the Minister to consider again what he has told us is the decision of the Government with regard to the refund of the extra tax paid.

The CHAIRMAN - Before I call upon the next speaker, let me explain again that this bill has nothing to do with the reduction of the rate of sales tax on motor cars from 40 per cent, to 30 per cent- While the bill and the resolution to which I referred previously may be complementary, they are completely separate. The matter of the increase of the rate of sales tax on motor cars to 40 per cent, in November, followed by the reduction to 30 per cent, in February, is completely separate from the matters with which we are concerned in the bill now before us. The committee will be able to discuss those other matters later.

Mr Duthie - What can we say on this bill?

Mr Harold Holt - The best thing to do is to dispose of this bill and then get on to the resolution.

The CHAIRMAN - In reply to the honorable member for Wilmot, I simply say that he can talk about what is contained in this bill.

Mr Bird - But the Treasurer spoke on the resolution.

Mr Cairns - What about the Treasurer's speech, a copy of which I have before me?

The CHAIRMAN - That was a speech on a matter completely separate from what is now before the committee. 1 suggest that the committee consider this bill, and that honorable members say what they want to say about it. Honorable members can debate the resolution when it comes before the committee.

Mr Cairns -I cannot dispute your ruling, Mr. Chairman, but in introducing this bill the Minister made a speech in which he referred at the very beginning to passenger motor vehicles and the reduction of sales tax on them from 40 per cent. to 30 per cent. He also referred to the rate of tax on motor cycles and scooters, and he went on to mention that registrations of new motor vehicles were at the rate of 330,000 a year. Then, replying to the honorable member for Melbourne Ports (Mr. Crean), he endeavoured to justify the whole action of the Government in relation to this matter. He did not deal specifically with the technicalities of this bill; he tried to justify the whole policy of the Government in increasing the sales tax on motor cars and later reducing it.

The CHAIRMAN - Let me say again to the honorable member for Yarra that what the Treasurer said in his second-reading speech was on a matter completely outside the present jurisdiction of this committee. That matter was referred to because of convenience. As to what the Treasurer said in this committee, I allowed him a certain amount of latitude, because he was replying to what had been said by the honorable member for Melbourne Ports. I allowed both the honorable member for Melbourne Ports and the Treasurer to go a little wider than they normally would have been allowed to go on this bill. When the resolution is before the committee, as I have said, honorable members will have an opportunity to discuss the other matters that have been referred to. The committee at the moment is confined to what is contained in this bill. That is how the Chair rules.

Mr Browne - The matter of dates is important, but the rate of tax is even more important.

The CHAIRMAN - So far as dates upon which various rates of tax were imposed are concerned, this bill deals only with motor cycles, auto cycles, motor scooters, side cars and accessories. The matter of the reduction of sales tax on motor cars from 40 per cent. to 30 per cent. is covered by the resolution.

Question put -

That the words proposed to be omitted (Mr. Crean's amendment) stand part of the bill.

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