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Wednesday, 2 April 1941

Senator LECKIE(Victoria - Assistant

Minister) [5.10]. - I move -

That the bill be now read a second time.

As honorable senators are aware, the Government is introducing a measure to provide for the payment of cash allowances for the benefit of children, and I suggest that honorable senators reserve their comments on child endowment until a subsequent measure is before the Senate. It is difficult to believe that honorable senators will disapprove of the principle of child endowment, but it is perhaps necessary to remind them that the new scheme, urgent and desirable as it is, must be paid for. This bill is designed to provide the greater part of the revenue which is necessary to finance the Government's scheme of child endowment;. In other words, it will provide funds with which the Government will supplement the wages and income of the family man. The importance of the family man to this country is too often overlooked. We are a comparatively small community in a vast country, and in our time some nations have assumed that might is right. If we are to survive as a nation there must be at least a sufficient number of Australians to develop and defend this country. In such circumstances, the family assumes a role of paramount importance. At this point I draw the attention of honorable senators to two simple facts. The first is that in each of the last eight years, that is, from 1932 to 1939, the birth-rate in Australia has been lower than the replacement rate. The other is that at present there are 100,000 fewer children under the age of fifteen years in this country than there were seven years ago. These facts are of the utmost significance to all of us. The state of affairs indicated is thoroughly bad, but features even worse can develop. A declining birth-rate has a snowball effect: its evils increase. Unless, therefore, something is done, quickly, to arrest the decline of the birth-rate, we must soon find ourselves surrounded with difficulties which will be infinitely greater than those with which we are confronted. This is the greatest of our dangers. Even if this legislation does nothave the effect of increasing the birth-rate - and that may be open to doubt - it will at least have the effect of ensuring that children will, from babyhood, have those necessaries and comforts which will enable them to grow into healthy and sturdy men and women. It would be idle to assume that our troubles will be solved merely by the provision of additional income for the family man. That is only the first step in a wider national programme for the encouragement of family life. It is, however, a very substantial step, and the bill now before honorable senators will make that step possible for without finance the additional family income cannot be provided.

This, therefore, is a measure of more than ordinary importance. Its objects are the preservation of our nationhood and of our freedom. These are the issues which honorable senators must have in mind when debating the bill. Only the seriousness of the problem could justify the Government in introducing measures for the encouragement of family life at a time when the nation is engaged in a war of unparalleled magnitude. The fact that the defence of the nation must cost valuable lives is an additional and pressing reason why this and cognate measures should be adopted. The scheme will be costly. The benefits to be provided are wider than those provided under the scheme which at present operates in New South Wales. That scheme is restricted by finance and by the fear that high costs would handicap New South Wales industries which operate in competition with those in other States. In New South Wales a means test is imposed, which takes into account the income of the family. The proposed scheme is not restricted by fear of its effects on interstate trade; it is on a national basis, and it is more costly because it is far wider in its scope. Because it is so comprehensive it cannot be financed from present revenues. All the revenue which can be raised through existing channels will be needed to pay for the defence of this country. Although we may increase existing taxes to the limit and expand credit to the limit of safety we shall still find it difficult to pay the costs of the war. Even for such a purpose as family endowment we cannot afford to reduce on expenditure on defence. It may be possible to provide some part of the co3t of the child endowment scheme from Consolidated Revenue, but the larger portion must come from new revenue raised for the purpose. No means of raising that revenue is more appropriate than the proposed tax on pay-rolls.

Wages are now fixed at flat rates regardless of the size of the family. Family endowment is a special supplement to wages and is graduated according to the size of the family. It is, therefore, a logical adjunct to the wages system and, as such, the money required to pay it should be obtained by a tax on the payrolls of the employers. It is necessary that the Commonwealth should collect, pool and distribute the money to the families, because, obviously, if the employer had to pay higher wages to men with families than to single men, the family man would not get a job at all. It is proposed that roughly two-thirds of the cost of the scheme will be provided by the tax on pay-rolls, which is approximately the proportion that will be paid out to wage-earners. Briefly, the bill provides for a tax at the rate of 2-J per cent, on wages paid by employers. With a few exceptions such as hospitals, charities, religious institutions, &c, all classes of employers will be liable to pay the tax and all wages, which includes remunerations of all kinds, will be taken into account. In the appropriate machinery bill, an exemption will be provided which will exclude those employers who do not pay more than £20 in wages in any week in a financial year. Employers whose pay-roll so fluctuates that it sometimes exceeds £20 and sometimes falls below that amount will get the benefit of an adjustment at the end of the year if their total wages bill for the year does not amount to £1,040. The tax will be paid by those employers who pay wages in excess of £1,040 a year and then only on that excess.

The argument that this tax will be passed on and considerably add to the price of goods to the consumer is hardly tenable since the average percentage of labour in manufactured articles is approximately 22. This means that the added cost on the completed goods will not bc 2^ per cent, as alleged, but only one-half of 1 per cent. The argument that endowment will not be paid out of Consolidated Revenue is unsound. The object of this bill is to increase the Consolidated Revenue so that endowment may be paid from it. The issue before us is plain. In the belief that the payroll tax is the most logical and appropriate means of raising finance to make child endowment possible, I commend the bill to honorable senators.

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