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Wednesday, 3 June 1942

Senator ARTHUR (New South Wales) (3:40 AM) . - I had no intention to par- ticipate in this discussion because I had imagined that popular opinion would at least have influenced honorable senators, but I am impelled to add my quota to the debate by reason of the references by honorable senators with a legal training to the constitutional aspects of the measure. I propose to make reference to legal opinions which they have overlooked. Prior to the establishment of federation, interstate conventions were held and legal luminaries and statesmen of the calibre of the late Sir Henry Parkes brought to the notice of the people of Australia the need for the adoption of the principle of "one nation, one people, and one destiny". I believe that I am the oldest member of the Labour party now in Parliament. I always doubt opinions expressed by legal minds. Decisions by justices of the peace are frequently reversed by police magistrates, and the verdicts of the latter are often dissented from by higher courts, until the decisions are finally reviewed by the Privy Council. The Leader of the Opposition (Senator McLeay) and Senator McBride claim that this bill does not provide for uniform taxation. I am reminded of the Braddon " blot ", and I remember that in 1915, when the people were about to be appealed to at a referendum to grant increased powers to the Commonwealth Parliament, the Labour movement found " rats " in its own ranks and the referendum was withdrawn. In 1926, the people were again appealed to, and the result of the referendum was that certain financial matters were placed under the control of the Commonwealth. This led to the establishment of the Australian Loan Council. Is it not a fact that a State which needs money must come to the Commonwealth for it through the Loan Council? The Government's proposals for uniform taxation arise out of a desire to improve the country's war effort. This debate, particularly the speeches of the Leader of the Opposition and Senator McBride, reminds me of that old-time Greek philosopher Diogenes, who was always searching for an honest man to show him the light. There are many persons in the community who, although not members of the Labour party, have views which accord with mine, as the following letter which I have received from the Australian National Services League, of Dalton House, Sydney, shows -

At a meeting held in Sydney yesterday, convened by this league, and comprising representatives of the following commercial and financial associations of New South Wales: -

Sydney Chamber of Commerce (Incorporated),

Chamber of Manufactures of New South Wales,

Constitutional Association of New South Wales,

Cartridge Convention.

Employers Federation of New South Wales,

Farmers and Settlers Association of New South Wales,

Galvanized Iron Agreement,

Graziers Association of New South Wales, Iron and Steel Association,

New South Wales Wire Nail Distributors Association,

New South Wales Traders Protection Association,

New South Wales Sheepbreeders Association,

New South Wales Wholesale Tobacco Association,

New South Wales Wholesale Softgoods Association,

Patent Medicines and Proprietary Articles,

Wholesale Distributors Association,

Pharmaceutical Society of New South Wales,

Retail Traders Association of New South Wales.

Sydney and Suburban Timber Merchants Association,

Sydney Woolselling Brokers Association, Wire and Wire Netting Association,

Wine and Spirit Association of New South Wales,

Wholesale Grocers Association of New South Wales, the following resolution was unanimously carried : -

This meeting strongly supports the present proposal of the Federal Government to have one taxing authority for the Commonwealth for the duration of the war and one year thereafter, recognizing as it does the great benefit it will bestow on the business community not only in the simplification of its taxation returns, but in the saving of man-power both to the Government and the taxpayers in this time of great national crisis.

A copy of this resolution has already been forwarded to the Prime Minister and the meeting also decided that a copy should be sent to you.

It was felt that you should know that the organizations represented fully supported the principle of one taxing authority for Australia.

When a collection of organizations such as that is found supporting this legislation, one looks for a motive behind the opposition to it which has been voiced in this chamber. The motive of Senator McBride is not that of the Graziers Association of New South Wales, which stands behind that letter, nor is it that of the Graziers Association of South Australia, which is associated with the Adelaide Steamship Company, which in turn is interlocked with the coal-mines and other mining institutions and metal concerns in New South Wales, because those organizations favour this legislation. I suspect that we shall find it in the international financial bloc, with Australian head-quarters in Melbourne. That international bloc is directed from Switzerland, which is a neutral country. It represents German interests, as well as interests controlled by the Bank of England, with which Mr. Montagu Norman is so closely associated.

Some honorable senators opposite have advocated the imposition of taxes on incomes in the lower groups. Statistics show that 70 per cent. of the people of Australia have incomes below £300 a year. Under the uniform income tax proposals, a person without dependants, who has a taxable income of £300 a year, will pay £31.5 in taxes. At present, if living in New South Wales, he pays £35.1. Should he live in Victoria, his tax would be £31.6. A taxpayer, with a dependent wife, who has a taxable income of £300, would, if living in New South Wales, pay £24.7 in taxes. If living in Victoria or South Australia, his payment to the Treasury for income tax would be £21.5 and £29.3, respectively. A taxpayer with a similar income, but who has a wife and one child, will pay £13.1 under the uniform income tax proposals, compared with a present payment of £15.3 if he be a resident of New South Wales. The respective figures for Victoria and South Australia are £12 and £18.5. Should a taxpayer with a taxable income of £300 a year have a wife and two children, the payment under these uniform income taxation proposals will be £10, compared with £10.8 and £9.4, respectively, now paid by him according to whether he is a resident of New South Wales or Victoria. The Commonwealth Statistician's figures show that the average family in Australia consists of less than two children. In my opinion, Senator Spicer's speech to-day was the most hollow one that I have heard from him. Statistics presented to this Parliament by the Treasurer (Mr. Chifley) prove the incorrectness of the honorable senator's assertions. The Leader of the Opposition referred to the Government's proposal as camouflage and political trickery, but he did not adduce any arguments in support of his charge. The legal aspect of the Government's proposals has been discussed. I have had some legal training. So did Sir Isaac Isaacs, " Toby " Barton, and others who were prominent in the early days of federation. In an attempt to belittle the Treasurer, and to support the plea that these proposals are so much camouflage and trickery, honorable senators opposite tried to show a lack of uniformity in these proposals. In considering them, the marital condition of taxpayers should be taken into account. Of the people who pay taxes, 60 per cent, are married and 40 per cent, single. Of the former group, about 40 per cent, have only one child. Medical men say that children require certain food. Those requirements are based on the calorific value of such food. The same medical men say that a man doing hard work needs 3,400 calories, whereas a man in a sedentary occupation requires only 3,000 calories daily. Soldiers and others doing strenuous work require up to 3,800 calories a day. Where is this food to come from? If girls receiving £3 a week are to be taxed, they will have little money left with which to buy necessary clothing, pay travelling expenses to and from work, and meet their other needs. I disagree with any proposal to take so much out of their pockets each week in taxes; too little would remain for their needs. Preference has been made during this debate to the child endowment scheme of New South Wales. Since the passing of Commonwealth legislation providing for child endowment, the Commonwealth Government is the authority which deals with this matter throughout Australia. Some honorable senators opposite complain that, in calculating the amount of compensation to be paid to New South Wales, the special committee made no allowance whatever for the fact that New South Wales has been relieved of an annual expenditure of £1,337,000 in respect of its State child endowment scheme, which was superseded by the Commonwealth scheme. However, they omitted to mention that these amounts of compensation to the States may be increased, or decreased from time to time. It is a reflection upon this chamber thai we are obliged to stay here until the early hours of the morning to debate proposals which are obviously designed to benefit our people, as a whole and to improve our war effort. Many honorable senators opposite are strongly opposed to these measures. The reaction to the Government's proposal outside of Parliament has not been unfavorable. The contrary is disclosed in the following report of sales on the stock exchange from to-day's Sydney Morning Herald : -

Sales lists on the Sydney Stock Exchange yesterday were longer, than usual for present day trading.

Commonwealth bonds were lively at firm prices. Industrial shares generally had a stronger tone.

Opening business was a little brighter, but it was in. the afternoon that spread of buying interest became denned. A rather strange feature of trading was that no transactions were effected -in the classified sections in the morning. Even in the afternoon business in these sections was restricted. This was often because of the lack of sellers.

The price index of industrial shares rose by nearly half a point, resulting in further payment of the index for representative ordinary shares.

No guide to a market trend was given by the 'key shares because of irregularity of movement in the group. Colonial sugar stood out with a gain of 15s. to £42 10s. Last month these shares, on an ex-dividend basis, rose from £39 7s. fid. to £41 15s. British tobacco was slightly firmer. Broken Hill Proprietary held steady, and Australian Consolidated Industrie* and Electrolytic Zinc, new, were shaded.

Senator Spicerstrongly opposed this legislation on constitutional grounds. He did not tell us that for many years certain classes of wealthy companies in the State which he represents have escaped their fair share of tax. He also failed to point out that the State governments may continue to levy taxes, other than income tax, and that many avenues are open to them to increase their revenue from those sources. The Victorian Government, for instance, could justly demand a much greater contribution to its revenue from wealthy sporting bodies in that State. Under

Victoria's system of taxation the wealthier taxpayers paid considerably less tax in proportion to income than persons with incomes in the lower ranges. The wealthy section of the community is invariably enabled to obtain advantages which are denied to the poorer sections. For instance, wealthy people did not go empty handed in the recent rush to buy clothing in the capital cities following the Government's announcement of its intention to ration clothing. In most cases they were able to reserve the articles they desired to purchase merely by telephoning the big emporiums with which they had accounts. Further, they were not obliged to accept the shoddy material that was passed on to the workers. Senator Spicer urged that incomes of £3 a week should be taxed. That would be most unfair at a time when the lounges of the leading hotels in the capital cities are filled at all hours with well-to-do individuals who draw big incomes in the form of interest on investments in war industries. I cannot understand why the Senate is not prepared to pass these measures on the voices. I strongly support the principle of unification, and sincerely hope that before the war is over many more sections of our people, like those represented by the associations I have cited, who could not possibly be considered to be supporters of Labour, will swing in behind the movement to apply that principle to a still greater degree in our legislation. I also sincerely trust that we shall gradually improve our financial system. The Royal Commission on Monetary and Banking Systems declared that it was possible for the Commonwealth Bank to lend money free of interest to the Commonwealth Government. I can see no reason why we should not scrap our present financial system, and like the people of Russia, whom we hail as our saviours to-day, start completely afresh. Nazi Germany, or Fascist Italy, did not bother about uniform taxation. Despite any provision contained in these measures, the Commonwealth Government has power to levy taxes at the rate of 20s. in the £1 if it so desires. It could levy a tax at a rate of, say, 18s. in the £1, with the result that the States would be practically unable to obtain any revenue whatever. Much has been said about legal luminaries who discussed the constitutionality of these measures. Like Diogenes, they are looking for honest men to show them the light. I firmly believe that members of this Parliament who have opposed this legislation would be decisively defeated were general elections held in the immediate future.

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