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Tuesday, 3 December 1935

Senator FOLL (Queensland) .- I wish to supplement the remarks made last Friday by Senator Johnston regarding the necessity for a reduction of the various forms of emergency taxation imposed on the people of Australia during the last few years. In the depth of the depression, various forms of direct and indirect taxes were imposed on the people of this country, not only by the Commonwealth Government, but also by the various State governments, each of which gave an assurance that, as such legislation was merely an emergency means of raising additional revenue, it would be removed so soon as circumstances permitted. One reason for the imposition of new forms of taxes was the decline of customs revenue and, indeed, of revenue from all the sources then being tapped. Among the purely emergency measures introduced into this Parliament by the Scullin Government and its successor were primage duty, the special property tax, and the sales tax. Senator Johnston pointed out that last year these taxes yielded £14,000,000. I give the present Commonwealth Government credit for having reduced taxes ; but surely something is wrong when taxes which were imposed in an emergency bring £14,000,000 to the Treasury in a year in which we boast that Australia has, to a great extent, recovered its financial stability. In my opinion, the sales tax is one of the most iniquitous taxes ever imposed by an Australian Parliament.

The PRESIDENT (Senator the Hon. P. J. Lynch). - The honorable senator is not in order in reflecting on an act of this Parliament, unless he intends to move for its repeal.

Senator FOLL - I withdraw my statement, and say that no other tax causes so much irritation as does the sales tax. I am continually in receipt of letters from people who have been prosecuted for some trivial breach of the regulations under the sales tax laws. I am convinced that, in the majority of cases, the persons concerned had no desire to evade payment of the tax and that their failure to pay was the result of an oversight. The sales tax is irksome, not only because it adds 5 per cent, to the cost of goods, but also because it entails a considerable amount of accountancy work and increases overhead expenses. Furthermore, in order that a tax of 5 per cent, may be paid to the Treasury, the management of a business has often to increase the price of an article by so much as 10 per cent. Bad debts and the accountancy entailed in compiling the necessary returns for the Taxation Department have a'lso to be taken into consideration. Hence much irritation is associated with the sales tax legislation, and I hope that the Government, in view of its abounding revenues, will take an early opportunity to abolish this imposition. Another form of tax levied by the Government as an emergency measure is the primage duty. I fail to discover any reason why this impost should be permitted to remain for another day on the statute-book. In this morning's issue of the Sydney Morning Herald a paragraph appeared relating to the customs revenue returns -

For the first five " months of the financial year, customs and excise revenue, £17,307,133, was greater by £1,231,101 than that for tha live months ended November 30, 1934, £] 0,070,032; and exceeded the estimate, £15,770,000 by £1,537,133. The revenue from the same source last month was £3.508,991, which was greater by £254,400 than that for November, 1934, £3.254,591.

I remind honorable senators that in addition to the emergency taxation imposed by the Federal Government, the Treasurers of the various States have also adopted special measures to increase their revenues. Various forms of relief taxation, by means of imposts on salaries and wages, have been levied by every State in Australia; in Queensland the tax is nearly ls. in the SI, and. I believe that much the same rate applies in other States. There can be no real recovery in' commerce in Australia until the onerous burden of taxation is lifted from the shoulders of those engaged in industry. Appeal after appeal has been made by the Prime Minister (Mr. Lyons), the Treasurer (Mr, Casey) and others administrating the affairs of this country urging private enterprise to absorb an increasing number of the unemployed.

Time and again these gentlemen have declared that the policy of the Government is to assist in the rehabilitation of commerce ; but I venture to say that there can be no real rehabilitation of industry in Australia until the burden of taxes now being borne by industry is considerably reduced. Governments are continually bringing forward budgets in which the Treasurer glories in the fact that he is able to expend more on this department and on that department. I would be much more gratified to see them making substantial reductions of every form of taxation. Such methods would, I believe, finally bring to those government.0 practically as much revenue as they collect at the present time by heavy taxes which retard recovery. A few years ago, the Commonwealth Government brought down what was probably one of the best budgets ever submitted in this country. It proposed a reduction of taxes by nearly £8,000,000, and was a definite gesture of the Government's good intentions towards rehabilitating industry. The result was an immediate response on the part of industry itself, and that is one of the reasons why revenue has been booming and unemployment decreasing.

A common occurrence in the financial procedure of Australian governments, Federal and State, is for special taxes to be imposed, and the people are told that the object of them is to meet a certain emergency. Barely, however, "are such emergency imposts lifted. I do not agree with the policy that seems to be gaining ground in Australia, by which the Commonwealth Government becomes the' principal taxing authority for the purpose of providing revenue, not only for its own requirements, but also for making available grants to the States for various purposes. I believe that every government should have the responsibility of collecting the money it expends. During the last few years, the practice has grown up of the Commonwealth Government raising millions of pounds a year more than it requires for its own purposes, and returning a large portion of it to the States by different forms of grants. A much sounder and better policy in the interests of the State governments themselves would be for the

Federal Government to vacate certain fields of taxation, leaving them to the States, whose governments would then be responsible to the taxpayers for raising the moneys which they spend. Lately the Premiers and Treasurers of the States have met in conference with the Federal Treasurer to devise programmes of expenditure for the forthcoming financial year, not merely deciding what their loan requirements will be for the year, but also demanding that the Commonwealth shall pay for this and that requirement which is solely the responsibility of the State governments. The Government which is spending the money should bear the responsibility for the raising of it. In my opinion, the Federal Constitution never envisaged the possibility of the Commonwealth Government becoming the principal taxing authority in order to distribute to the various States the money to be expended by them. An extraordinary increase of revenue has taken place in practically every Commonwealth department during the last few months, very largely due to the sound administrative methods of the present Government, and partly due to reductions of taxes in previous years. I am oldfashioned enough to believe that the less the taxation and governmental restriction that are placed on commerce and industry, the greater will be the reward in increasing employment and general prosperity.

A statement was made by Senator Collings on the 15th November last, in which he referred to the industrial position in the Northern Territory. He said -

Some years ago I travelled north from Brisbane with a representative of Vesteys, who should be com petent to speak on the subject, and as the conversation occurred many years agoI shall not bo breaking any confidence if I disclose the information then given to me. I asked if it was true that Vesteys had closed down their meat works in the Northern Territory because of the extravagant demands of labour. After denying the statement he said that the company could afford to pay any reasonable wages but at that time it did not suit them to carry on inAustralia because they could make bigger profits from their operations in Argentina.

During the week-end I discussed this matter with some of those respon- sible for developmental work in the Northern Territory, and I have been assured that it was the continual demands made on the company by its employees in Darwin that determined it to close down the works. This view is supported by a letter, written in 1925 by the managing director of Vestey's in Australia to the Administrator of the Northern Territory, in the course of which he said -

Following upon our conversation during the visit of Mr. Rowlands, and the writer on the 20th ult., we beg to advise that on the experience of working costs shown by present operations, there is no immediate possibility of a permanent re-opening of the works. We were prepared for a loss on the boiling down operations, but labour and other costs have been so much above reasonable expectation as to show conclusively that to freeze stock under present conditions would be to lose large sums as compared with what the stock is worth as store stock, or shippers on the hoof. - The expert labour brought from south is efficient, but very expensive in that we have had in this case to pay their fares and travelling time on top of the 25 per cent, premium upon Queensland award rates of pay.

The local labour is in many cases very inefficient, and on that account more costly, because it also receives the premium of 25 per cent.

I saw Vestey's works in Darwin before they were closed down, and I have seen them since, and I am convinced that the company was not treated fairly. Those who are best acquainted with the history of events in the north have no doubt that it was the harassing tactics of the employees, together with the decline of the price of beef, which caused the company to cease operations in Australia. Landholders in the north, naturally, resent statements by Senator Collings, and by members' of the House of Representatives that they are holding large tracts of country which they make no attempt to develop. As for Vestey's, we know that no company would be prepared to expend £2,000,000 on an enterprise which it did not at the time intend to prosecute to the best of its ability.

Senator Gibson - The company spent £3,000,000 in the Northern Territory.

Senator FOLL - That makes the position worse. We should encourage people with capital to interest themselves inthe Northern Territory. We should welcome them with open arms, and assist their efforts to the best of our ability. Those who are prepared to bring capital to Australia for the development of unsettled areas are public benefactors.

It has been suggested that no attempt has been made by this company to popularize primary products on the English market. I have here a number of photographs picturing displays of Australian mutton and beef in the Smithfield market in London, and they show that everything was done to put Australian products before the public in the most attractive form. Senator Collings has already seen these photographs.

Senator Collings - Yes, they are very good, but Vestey's had nothing to do with that display.

SenatorFOLL. - The display was arranged by "Weddell and Company Limited, a subsidiary company of Vestey's. One photograph pictures an excellent display of a shipment of new season's lamb from South Australia. Everything was done to make the display as attractive as possible, and it was evident that the company was proud of the fact that it was able to export from Australia lamb equal to that produced in any other part of the world.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The same company has arranged for ships of the Blue Funnel Line, fitted with the latest chilling apparatus, to visit Australia.

Senator FOLL - That is so. New ships have been built, and specially fitted with chilled space, to carry Australian beef and mutton overseas so that it may realize the best price obtainable on the British market. It ill becomes us to belittle the work of firms which are doing so much for the Australian export trade. Another photograph shows a display of chilled beef raised by Mace and Son, of Turilla Station, near Rockhampton, in the State which Senator Collings and T have the honour to represent in this chamber. The beef is of very even quality, and is a credit to Australia. It is evident that Australian graziers can produce beef entirely suitable for the British market. I trust that in future charges of the kind we have had to listen to recently will not be made, unless there is some foundation for them. When I was in England this year, I found that a great many persons with capital were seeking investments in Australia and to other parts of the Empire. If ever we are to develop this country properly we must encourage the introduction of overseas capital, because we cannot succeed if we depend entirely on our own resources. We must look to our kinsmen overseas to supply the capital and population which we lack. Although much is now being done to advertise Australian products abroad, our trade rivals such as Argentina, Denmark, and New Zealand have done more, and the fact that they are able to obtain better prices for their products than we do is due largely to the fact that they have kept the virtues of their products continually before the buying public. They have not been content merely to raise the produce, ship it overseas, and let it take its chance on the market. They have advertised the goods, and insisted upon uniform grades.

I conclude by expressing the hope that it will be possible for the Government, in its next budget, to make provision for a further reduction of taxes on all sections of the community.

Senator Collings - Why not abolish all taxation?

Senator FOLL - If it were possible to lift more taxes off the shoulders of the people, I am sure the Government would gladly do it. For some years now, industry has been greatly harassed by Federal, State and municipal taxes. A substantial reduction of these imposts would do much to rehabilitate Australian primary and secondary industries.

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