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Tuesday, 24 November 1959

Mr CALWELL (Melbourne) .- The Opposition opposes this bill. When we listened to the speech of the Treasurer (Mr. Harold Holt) we could have been pardoned for believing that this was an innocuous measure designed to stop a certain amount of tax evasion because of some devices resorted to by manufacturers in the way they turned out certain motor vehicles. But the Opposition looks beyond what the Government regards as tax evasion. The Opposition is concerned with the principle of whether this Government or any government should be levying such a very high amount of indirect tax on the community at this time if the country is only one-half as prosperous as the Government says it is.

When the Chifley Government was in power it levied taxes only in what it regarded as a right and proper way. We threw on those who made big incomes, whether they were companies or individuals, the responsibility of helping to maintain the services out of which they were able to do so very well. We believe in the principle of direct taxation rather than that of indirect taxation. Since the Chifley Government was defeated this Government has over the years changed the pattern of taxation. It has reduced income tax, including company tax, and has increased the burden of indirect taxation, including sales tax, excise and customs duties and other forms of indirect taxation. The result is that the burden of maintaining this country and the services that are carried on to the advantage of everybody in the community is now being borne not by those best able to bear it, but by those least able to bear it.

In this instance the Government complains that station wagons are being sold carrying sales tax of 16$ per cent. The. Government says that it intended in its legislation of a few years ago - in the days of the little horror Budget of March, 1956 - to impose sales tax of 30 per cent, on such vehicles. The Treasurer said -

The existing law requires payment of tax at the rate of 30 per cent, in respect of motor cars designed primarily and principally for the transport of persons, including station wagons, estate cars, but not including delivery vans. The latter bear tax at the rate of I6i per cent., which applies to commercial type vehicles.

To paraphrase the Minister's subsequent remarks, it appears to the Government that a number of manufacturers have adopted a device of selling a vehicle which is usually described as a station wagon or an estate van, ostensibly for commercial use as if it were a delivery van. However, a conversion kit is sold separately and these vehicles are then easily fitted up and converted to station wagons. The Government has said that 85 per cent of the vehicles in this class are taxed at only 16$ per cent, whereas it wishes them to be taxed at 30 per cent.

We of the Australian Labour Party believe that the Government should not tax the station wagons because, even if they are being used for private purposes, who buys them?

Mr Cope - Mostly country people buy them.

Mr CALWELL - The average suburban housekeeper does not buy them but, as the honorable member for Watson has said, mostly primary producers and people living in the outback and in the far north and far west of this continent, who have no other means of conveyance or transport, buy them.

Mr Cope - And they are bought by self-employed people.

Mr Curtin - And by the small businessman.

Mr CALWELL - As my honorable friends have said, these station wagons are bought by self-employed people, by small businessmen and by men with young families. They are the only way, in many cases, in which men with young families can give their children an outing. They cannot afford to buy the more expensive cars. Even the Holden is now in price beyond the reach of quite a number of people. Station wagons can be used for a variety of purposes. If the Government were really concerned about the primary producers, about people who live in the outback and about the family man, it would not introduce this particular piece of legislation.

The Government has said that if this bill does not become law it may lose £3,000,000 this year in revenue. Every time the Prime Minister (Mr. Menzies) speaks he refers to the fantastic development that is proceeding in this country. The Treasurer has gone so far as to say that this nation is enjoying permanent prosperity. If all those things be true, the Government should not want to take £3,000,000 from the little people and from the primary producers.

Mr Turnbull - But you do not agree that we are enjoying prosperity.

Mr CALWELL - The honorable member for Mallee can make his speech later. The Opposition intends to divide the House on this bill. We intend to separate the sheep from the goats. We do not expect to find too many sheep in the ranks of the Australian Country Party, but no doubt it will have something to say for itself later. Our point is that £3,000,000 is better in the pockets of the people who own station wagons than in the accounts of the Treasury. This year the Government has given back £20,000,000 to those people who pay income tax. That tax was remitted most unfairly and improperly because a person with an income of £4,000 a year received a tax rebate of £200, whereas the man on the basic wage who has a wife and two children to support benefited to the extent of 9d. a week. The Government now says to the low income earner, "You must pay more sales tax on the station wagon that you buy for the use of your family or for use in your business ".

Sales tax was introduced into our Treasury practice in 1930 during the depression. The Scullin Government introduced the tax, but even in the dark days of the depression it never reached more than 2i per cent, although it was progressively increased in the ensuing years. I can remember the abuse to which the Scullin Government was subjected for having introduced a sales tax of even 2i per cent, on luxury goods. In the midst of the war the Chifley Government never increased sales tax beyond 25 per cent., although we did increase income tax up to 18s. 6d. in the £1 on all taxable income of £5,000 a year and over. This Government, which now proposes to take another £3,000,000 in increased sales tax, boasts that a man with an income of £16,000 a year has had his tax reduced from 13s. 4d. in the £1 to 12s. 8d. in the £1 in the present Budget. That is what this Government calls good government.

It was only when the Chifley Government was defeated that this country began to realize just how high sales tax could be taken. In the days of the horror budget of 1952 the Government not only imposed a rate of 33J per cent, in the third schedule, as against 25 per cent, which was sufficient to assist in raising revenue in the darkest days of the war, but it also introduced a fourth schedule which included goods on which 50 per cent, sales tax was imposed, and then a sixth schedule which applied a 66f per cent, tax on certain goods. Of course, there have been reductions since then. If you look at the record of this Government in relation to the imposition of sales tax and see how it fluctuates, you would almost think that you were looking at a chart showing the temperature reading of a typhoid fever patient.

That is the story of sales tax until the little horror Budget of 1956 by which the Government again increased sales tax on a number of items, and on motor vehicles up to 30 per cent.

Mr Luchetti - The Government even promised to review it.

Mr CALWELL - Yes, the Government said that it was merely a temporary expedient. I am grateful to my honoured and distinguished friend from Macquarie for that interjection. This Government's promise to review sales tax is similar to its promise to put value back into the £1, a promise that once made was to be forgotten. By the little horror Budget of 1956 the Government took an additional £15,000,000 by way of sales tax, but of course there were other large increases in indirect taxes and excise duties.

Mr Cope - On beer.

Mr CALWELL - On beer, spirits, cigars and cigarettes. Not one penny of those exactions has been remitted, even in the Budget which the Government introduced recently which returned £20,000,000 by way of reduced income tax to those who do not need one penny of it whereas the people on the lower incomes receive practically nothing.

Mr Cope - And the Government gets back that amount by increased postal charges.

Mr CALWELL - As the honorable member for Watson has said, this Government gives with one hand and takes back with two hands. The Government has taken back all that it has given to the little people but, like Oliver Twist, it is asking for more. We of the Australian Labour Party have been complaining for years not only about the high rate of sales tax but also about the range of goods upon which sales tax is being levied. The honorable member for Mallee (Mr. Turnbull), who is certainly very electorate minded, occasionally protests about the sales tax on raisin bread. "But, beyond that, he seems to have no interest in sales tax. In this Parliament over the years, I have put forward a proposal that the sales tax on motor cars used by doctors and clergymen ought to be lower than that paid by people whose main concern in owning a car is to use it for pleasure or luxury purposes. I have argued that -church notices should no longer bear the burden of sales tax. But the Government turns a deaf ear to all these proposals. As I have said, it gives something away in income tax concessions, but it keeps taking from the people by means of sales tax.

We have made our protests. But we are not the only ones who have protested over the years. Sir Arthur Fadden, the former Treasurer, when in opposition, on 20th October, 1948, discussing the Sales Tax (Exemptions and Classifications) Bill 1948, : said -

The bill should be withdrawn and re-drafted on : a sensible basis having regard to our economic requirements and the indispensable need for an improvement of the home life and health of the community.

If that was a legitimate view when sales tax was only 25 per cent., it has much greater force at the present time, when sales tax is still inordinately high and the actual rates go beyond 25 per cent.

Let no honorable member reach the conclusion that indirect taxation, including sales tax, is not very high in this country. The White Paper on National Income and Expenditure 1958-59, which was circulated with the Budget documents, shows that, in the financial year 1958-59, the Government received by way of indirect taxation no less than £701,000,000 out of a national income of £5,021,000,000, the gross national product being £6,197,000,000. In other words, the Government is taking approximately one-seventh of the national income in indirect taxes. And the proportion is increasing all the time. I revert to my first argument: If the country is prosperous, the Government should not need to take so much from those who are least able to pay.

Mr Turnbull - Is the country prosperous?

Mr CALWELL - Does the honorable gentleman think that it is prosperous?

Mr Turnbull - I do.

Mr CALWELL - If he thinks it is prosperous, he should not vote for this bill, and I hope that he will back his opinion with his vote.

In 1956, shortly after the general election in December, 1955, eight professors called on the Government to introduce a new Budget. They recommended that direct taxes should be increased, and they turned their faces completely against indirect taxation. The Government took their advice about skimming off the surplus spending power of the people, as they described it, but did it by increasing indirect taxation. We think that the time has arrived when all this sort of thing should stop.

Let me now say something about the differential treatment accorded to station wagons in the various States and by the Commonwealth. I am indebted to my honorable, learned and gallant friend, the honorable member for Werriwa (Mr. Whitlam), who, on 12th November, 1957, asked Sir Arthur Fadden, who was then Treasurer, a question concerning taxation imposed on these vehicles. The story, as I have extracted it from the report in " Hansard " of both the question and the answer to it, is: The Commonwealth has always regarded station wagons as passenger vehicles, presumably for no better reason than that a higher sales tax is paid to the Commonwealth on passenger vehicles than on commercial vehicles. That appears to be the only reason. In New South Wales on the other hand, station wagons are invariably classed as commercial vehicles - again, presumably, for no better reason than that, in that State, a higher registration fee is paid on commercial vehicles than on passenger machines. There is no uniformity of approach to this problem in the several States and the Commonwealth, Mr. Speaker.

Sir Wilfrid Kent Hughes - Are station wagons registered as commercial vehicles in New South Wales?

Mr CALWELL - Yes. In three of the States, station wagons are registered principally as private passenger vehicles and are subject to imposts lighter than those applied to commercial vehicles. However, if station wagons are in fact vehicles designed for commercial use, they may be registered as commercial vehicles, and are subject to the higher fee. In one State - I think it is South Australia - no distinction is made between private motor vehicles and commercial vehicles in respect of the charge to be paid. In New South Wales in all circumstances, and in most other States in some circumstances, station wagons are subject to the higher rate of indirect tax payable on motor vehicles. Station wagons suffer from the worst of both worlds. In fact, the only advantage which the owner of a station wagon enjoys is that, in some capital cities, he is allowed to park his vehicle in a loading and unloading zone provided that he leaves the rear of the vehicle open while it is parked. That is most interesting.

Mr Curtin - That is a concession.

Mr CALWELL - It is a great concession. He will not be in trouble for parking in a prohibited place if he leaves the ~ar of A. vehicle open while it is parked in a loading or unloading zone.

Sir Wilfrid Kent Hughes - What happens to the goods inside it?

Mr CALWELL - There may be no goods.

Mr Whitlam - It pays to unload, but not to load.

Mr CALWELL - That is right. If the owner leaves the rear of the vehicle open, he is not loaded up with unnecessary debt.

We say that the Commonwealth should take the initiative at a Premiers' Conference in securing uniformity of fiscal policy between the Commonwealth and the States in respect of station wagons. We consider, therefore, that the Government should drop this measure until such a conference has been held.

I could go back over the years and point out, further, how this Government has always discriminated against the little people and in favour of its friends. In 1953, it made certain decisions which exempted airlines from the payment of sales tax on purchases of aircraft and aircraft parts. That was designed to benefit Australian National Airways Proprietary Limited, of course. The Government isstill moved with the same spirit which has motivated that action and all its other actions in regard to privately owned airlines, and it is still giving to private airline operators advantages to which they are not entitled.

I think that the figures concerning the amount of sales tax levied by this Government compared with the Labour government ought to go into the record. In the financial year 1949-50, under the last Budget brought down by the Chifley Government, sales tax levied amounted to £42,458,000 out of a total tax revenue of £504,000,000.

Mr Anderson - There was nothing to buy in those days.

Mr CALWELL - There was plenty tO' buy in those days. If the honorable gentleman thinks that there was not much to buy then, let him listen to the figures for thefinancial year 1950-51, the first financial year in which this country suffered to the full the blight of the Government which he supports. In that financial year, the Government raised in sales tax £57,173,000' out. of a total tax revenue of £718,600,000. The honorable member for Hume (Mr. Anderson) said that in 1949-50 people could not buy anything. When this Government came in, presumably, the people could buy things, if his argument is correct. But the amount of sales tax paid in that year was £57,173,000, and it has grown progressively since. In 1951-52 it was £95,459,000. Then it dropped to £89,067,000. Then it rose to £95,689,000, and it has been rising ever since. The amount collected last year in sales tax was no less than £143,617,000 out of a total taxation revenue of £1,126,000,000.

Mr Cramer - That is prosperity.

Mr CALWELL - The Minister for the Army says that that indicates prosperity but there has not been an increase of 300 per cent. in prosperity between 1949-50 and 1958-59. Yet the amount that this Government collected in sales tax last year was three times as much as the Chifley Government collected in 1949-50! Not satisfied with that, the Government estimates that it will collect £150,000,000 this year out of a total taxation revenue of £1,204,000,000. The percentage is now rising. If the Government will get £7,000,000 more in sales tax revenue this year than it received last year, why is there a need to take the additional £3,000,000 for which this bill will provide?

With the concurrence of the House, I shall have the following figures incorporated in " Hansard ":-

The Opposition believes in reducing sales tax before income tax is reduced. In any case, we believe in shifting the burden of taxation back on to the. shoulders of those best able to bear it. We will oppose this bill as we have opposed, every other sales tax bill that this Government has introduced. I hope that the honorable member for Mallee will say a word or two in regard to the sales tax on raisin bread, pastry and ice cream. I hope that he will speak on the other iniquitous forms of sales tax to which he objects in private but against which he will not vote in public.

Mr Thompson - What about reducing the rate of 30 per cent, on motor cars to 16$ per cent.?

Mr CALWELL - The best thing that could happen would be that the sales tax on station, wagons should remain at 16$ per cent, and that the tax on all other motor vehicles should be brought down to the same rate. We should have a maximum tax of 16$ per cent, on all kinds of motor vehicles.

Debate (on motion by Sir Wilfrid Kent Hughes) adjourned.

Sitting suspended from 5.55 to 8 p.m.

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