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Wednesday, 1 June 1960

Mr REYNOLDS (Barton) .- Seldom, unfortunately, is it my pleasure to be able to agree so wholeheartedly with a Government supporter as I can agree with the honorable member for Richmond (Mr,

Anthony) on this occasion. Frankly, I should like to compliment the honorable member on the case he made for the abolition of this inquitous tax - the pay-roll tax. I go further: I invite the honorable member for Richmond to move an amendment to the bill to give effect to his views on the matter. 1 think that if he did so he could be pretty sure of getting the support of the Labour Party.

Mr Bowden - He believes your party agrees with it.

Mr REYNOLDS - We support the abolition of the pay-roll tax. One of the major items of our policy announced at the last general election was the abolition of pay-roll tax immediately on at least public and semipublic instrumentalities. Indeed, I go further than the honorable member for Richmond, and say that much of the sales tax should be removed for the same reasons as the pay-roll tax should be removed. I shall refer to that in more detail later.

I want to turn now, Mr. Speaker, to a matter that specifically concerns my own electorate, but which I believe has general application. I raised this matter in a question only yesterday. It concerns the transfer between public instrumentalities of land owned by the Commonwealth. This particular case concerns the Kogarah Municipal Council. There is an Army cadet headquarters situated right in the civic centre of Kogarah. The council wishes to acquire this block of land on which to build a new civic centre to include immediately a baby health centre and ultimately a town hall and a public library. When the mayor and the town clerk approached the Minister for the Army (Mr. Cramer) on this matter - and I must say that the Minister was quite co-operative, and saw no particular reason why an Army establishment should be located in the shopping centre of a leading municipality of Sydney or anywhere else - they found that, after having gone into the details, the Minister was agreeable, as were the Army authorities, that the Army should move from the site to a nearby parkland, with the same land title as the Army now has. The understanding was that the council, with the aid of a subsidy of £2,000 from the New South Wales Government, would remove the existing building to the new site, and that in addition amenities would be pro vided for the Army which the Army does not already possess at this Kogarah establishment. The idea was to have a direct exchange of sites, with the understanding that the council was to provide extra amenities to the Army.

The Army was quite happy with this arrangement. Such a situation could happen in the electorates of other honorable members who may have to make applications for the release of land held by the Army so as to enable it to be used for building sites, either for homes or factories. Unfortunately, the whole proposal is at this stage in jeopardy, because the Treasury apparently has regulations which prevent the Army, or any other Commonwealth department, from exchanging land that it owns for land owned by another public or semi-public instrumentality. The procedure required under these regulations is apparently that the Army would have to sell the land that it owns, with the proviso that the money received for it would go into the Consolidated Revenue Fund, and would then have to purchase the other site out of its own current allocation.

I do not blame the Army for resisting such a proposition. It seems an intolerable situation that two public instrumentalities - this is not a deal between private enterprise and the Government, but between public instrumentalities - which could make, and are willing to make, a direct exchange to their mutual satisfaction and convenience, are prevented from doing so by regulations. I understand that the position is under review. The Treasurer (Mr. Harold Holt) yesterday promised me that the matter would be reviewed. I sincerely plead with the Government to change the regulations which prevent the kind of exchange of land that I have mentioned.

In this particular case time is running out. The New South Wales Government guaranteed £2,000 towards the cost of transferring the Army building to the new site. Quite understandably the Army was not going to pay for the transfer, because it was making the move for the convenience of the council. But this guarantee was given by the New South Wales Government on condition that the £2,000 was expended before the end of the current financial year. Here we are at the start of the last month of the financial year and the Commonwealth, as a result of Treasury regulations, is unable at this stage to facilitate this very desirable transfer.

My colleague, the honorable member for Reid (Mr. Uren), spoke about the rich rewards that some people are reaping from the national prosperity. I want to take a little time to talk about some of the people and organizations that are being deprived of a just share of the fruits of national prosperity. I put it to this House that a disproportionate share of our national funds is going to private enterprise as against the public sector of the economy. This is not just the opinion of the Labour Party. I have heard very eminent people, including Professor Copland, put the same view. They say that private enterprise is being very short-sighted in regard to its own interests, apart from the national interests, in demanding that the public sector of the economy have a reduced allocation of finance. So we have a kind of distortion in our economy to-day. We have very elaborate bank buildings and very elaborate new insurance buildings going up all over the place, we have big garages facing each other on practically every street corner, we have elaborate clubs that would be the envy of any school headmaster, we have big emporiums and great shopping blocks, and we have the importation of luxury goods. We have all these things, but nearly every State is short of police to protect these great institutions that are being created. I know that that applies to Queensland, New South Wales and Victoria, and I think it applies to other States also. Whatever we in this House may think, it is a very real fact in our community that property is being damaged and that people are being badgered, threatened and injured all because of an inadequate police force. Yet we can afford all the elaborate features that I have described. The streets in any capital city, quite apart from our provincial towns, are narrow and occupy only about half the space available for them. But we have more cars per capita of population than have most other countries.

Mr Chaney - This does not apply all over Australia.

Mr Forbes - It applies only in New South Wales.

Mr REYNOLDS - That is not so; I have just returned from Queensland, and I saw evidence of it there.

The shortage of money for housing has been mentioned in the Parliament, and 1 have heard reference to it in the various States that I have visited recently. To-day, people are being compelled to buy homes because it is impossible for them to rent homes. The waiting list for Housing Commission homes is growing instead of decreasing, as we have been told in this House. Many people to-day would prefer to rent homes rather than to buy them. I mention as an instance public servants who move around in their jobs.

Mr Jones - It is an eight years' waiting list for pensioners.

Mr REYNOLDS - I am told by my colleague from Newcastle that the delay is now eight years. A little advertisement was inserted in the local paper in my electorate recently, advising that four small blocks were to be made available in Hurstville by the Housing Commission for occupancy by pensioners. A swarm of people came in trying to obtain those four blocks, but they did not know that the allocation of them had already been determined and that priority had been given to those on the waiting list. We have all these luxury features, elaborate buildings, garages and clubs, but we lack adequate police forces, roads, houses for rental and other things that are essential for the community.

Honorable members well know that I have spoken here on a number of occasions about our education needs. I add, briefly, that 3,200 people from all over Australia attended a national convention in Sydney recently and pleaded to the Commonwealth, to the States and to any one who would listen, for help in the education crisis. But we still think that we can afford a high proportion of cars per capita of population, that we can afford to have luxurious clubs, that we can afford to have huge insurance and other buildings, and that we can afford many other elaborate features. While this happens, the essential needs for our national development go by the board. A disproportionately low percentage of our national income and national productivity goes into the provision of essential items in the public sector of our economy.

I could speak about the plight of hospitals, but this has already been mentioned in the House. We all know of the growing indebtedness of our public hospitals. I could speak about the delay in the provision of telephone facilities, and I remind the House that this is a prime responsibility of the Commonwealth Government. We find that not only do private homes lack this facility, but business people also are left without a telephone. They have no prospect of obtaining even one telephone, although they may need two, three or four. I know that my electorate lacks an adequate telephone service, and I am sure that this is not peculiar to my electorate. The problem is spread throughout the whole of the community. I hope that the rumour I heard is not true. I heard that the Postal Department is not replacing those who retire from the section that deals with the installation of telephones. I understand that some officers have been transferred to other sections and that those who retire are not being replaced. If this is true, I am very sorry, because, apart from serving a personal social convenience, telephones are vital to our national productivity. Even medical practitioners are not able to get a telephone service or the extension of a telephone service from a group practice to their homes, though an arrangement is made for each of the practitioners in turn to be on duty at night.

I put to the Government that we need a reappraisal of the distribution of our national wealth. It is all very well to talk about our affluent state, but this does not help the public instrumentalities that are not enjoying prosperous conditions. The provision of public services is essential not only for our individual well-being, but also for the development of private as well as government enterprise. This development is necessary if we are to increase our nation's productivity.

Amongst those who feel pretty badly about the distribution of our national productivity are the local government bodies. Within the last few weeks, four municipal councils in my area have asked me to join with others in making a plea to this

National Parliament for a better deal for local government. The municipal councils of Rockdale, Hurstville, Bankstown and Kogarah have sent to me, as I am sure they have sent to other honorable members in the locality, a plea to ask the Parliament to do something better for local government. They remind us that local government provides essential services to a sector of the communiity whose taxation goes only to the central government. They say that many people in their areas make no direct contribution to the cost of local government, but, through taxation on personal incomes, provide revenue for the Commonwealth Government. Our municipal councils, to my mind quite rightly, ask that we divest ourselves of an additional part of this money to help local government carry on with its great job.

The local government bodies remind us that they meet the cost of providing roads used by transports which pay taxes direct to the Commonwealth Government. They remind us, further, that they are giving communal and cultural services to the community which would otherwise have to be provided by the Commonwealth. For instance, local government is relieving this Government of the responsibility to give further aid to pensioners, because the councils subsidize the rates of pensioners, and this is now amounting to a tidy sum. Personally, 1 am of the opinion that concessions to pensioners should be stopped and that all grants to pensioners should be consolidated into one payment. The Commonwealth should provide a decent pension to enable pensioners to pay their way and' to meet their obligations to the various instrumentalities in the community. I do not think that pensioners should be placed in the position where they must produce cards to obtain concession fares on public transports and to seek wireless and television licences at concession rates. They should not be placed in the position where they must seek a reduction in the rates on their homes. It is time we looked at all these matters and made one grant in the form of a pension that would be sufficient to meet the needs of pensioners. One effect of this would be to relieve local government bodies of the need to subsidize the rates of pensioners at a time when rates are increasing tremendously. The payment by councils of a subsidy on these rates really means that other ratepayers in the area are meeting the cost of the subsidy.

Local government bodies in my area, and, to my knowledge, in other areas, are taking on very important cultural and communal responsibility. They are helping to provide recreation centres for elderly persons and youth centres for young people. They are providing public libraries and are doing many things that they used not to do. I think it is time that we recognized that local government bodies are accepting these added responsibilities and that they are being saddled with the burden of the quick development that has resulted from this Government's immigration policy. Because of the rate of development, local government bodies generally deserve and greatly need much more financial assistance from the Commonwealth Government. That is the position with respect to the municipalities that I have mentioned, and I am sure that the same thing applies to all the other local government bodies.

Local authorities are asking, first, that the whole of the proceeds of the petrol tax, which is derived from traffic using local roads as well as main roads, be devoted to local government purposes. Secondly, they are asking for relief from a considerable loss of revenue sustained because government and many semi-government properties are at present non-rateable. I know that the constituent banks of the Commonwealth Banking Corporation, for instance, pay an amount equivalent to the rates that normally would be paid on properties similar to those owned by the banks. As an act of grace, they make that special payment to municipal councils. But other public bodies do not do this. If we are to put the PostmasterGeneral's Department on a business basis, as has been demanded in this House before, one of the things that it ought to do is pay rates or at least the equivalent of the rates that would normally be payable on properties such as those held by the department. Perhaps the department does this, but my belief is that it does not, and that, therefore, it makes no contribution to local government.

Thirdly, local government bodies are asking for a share of the common pool of taxation by way of grants representing a contribution to the payment of the cost of local government services enjoyed by people who do not own properties. Fourthly, local authorities are asking, as are others in the community, for the abolition of the iniquitous pay-roll tax. This tax was mentioned by the honorable member for Richmond. Whatever we may think about the imposition of the pay-roll tax on private organizations, surely the request that this tax be abolished in respect of government and semi-government instrumentalities is just and reasonable.

Mr Wilson - How would you make up the loss of revenue if these suggestions were adopted?

Mr REYNOLDS - As the honorable member for Richmond reminded us earlier, one way would have been by the Government refraining from giving the 5 per cent, reduction in income tax in last year's Budget. I do not say this with bitterness or political spleen, but I think that it was most irresponsible of the Government to give that tax concession. We all like tax concessions, but, in the face of the needs of the public sector of the economy which I have just described, this action was most irresponsible. In the public sector of the economy, there is a great need for the building of homes and the provision of roads, hospitals and other things for which money is urgently needed. But in spite of this, the Government diverted funds back into the pockets of the wealthy people and of private enterprise to the tune of something like £20,000,000 - an amount which happens to coincide with what the honorable member for Richmond estimated would be the net cost of abolishing the payroll tax.

I began 'by saying that the sales tax has an inflationary effect. That is the first point about it. The second point in relation to this tax is that it is a regressive form of taxation. In other words, it hits hardest those in the community who are least able to bear it. I think that it is generally accepted that all kinds of indirect taxes do this. It is notable that the Commissioner of Taxation stated in his 38th annual report that in the financial year 1948-49 11.2 per cent., I think, of the total revenue collected in taxes was returned by the sales tax and that last financial year the proportion had increased to 16.1 per cent. - an increase of nearly 50 per cent, in the proportion of total revenue represented by sales tax collections.

As I said before, this is most undesirable because, as we all know, the sales tax and other indirect taxes are regressive, since they bear most heavily on the people who are least able to bear them. The same amount of sales tax is paid on a packet of biscuits by a pensioner and by a person in the £50,000 income bracket. The only difference between them is that the person with an income of £50,000 may eat a few more biscuits than does the pensioner. If I had more time I might remind the House of the whole range of items that still bear sales tax at high rates. I think it is bad that motor cars for private use, for instance, still bear sales tax at the rate of 30 per cent. - a rate that was imposed in 1956. To-day, a car is not considered to be a luxury item, and I do not see why it should still bear sales tax at this very high rate.

One of the most disturbing and dissatisfying features of the whole thing is the fact that such a wide range of foodstuffs commonly used in the home still bear sales tax, as do home furnishings and household appliances such as stoves, refrigerators and vacuum cleaners. All these things that are part and parcel of any home to-day are still subject to sales tax. The Australian Labour Party makes no bones about the fact that it believes that income tax and company tax should be the main sources of tax revenue. This party deplores the increasing incidence of the sales tax, which has developed as I have indicated.

Unfortunately, Mr. Speaker, I have taken more time on this matter than I intended. I want to make a final plea. Here we are at the very end of the sessional period before that in which the next Budget will be presented. We have heard much talk about our affluent economy. I have spoken of the disproportionately low share of the country's wealth which is going into the public sector of the economy, and I should like to remind the House, at this last opportunity before the Budget sitting, that we owe a great debt to those in this community who depend on social services and on repatriation benefits. I am well aware that the Government has been presented with proposals by the Returned Sailors, Soldiers and Airmen's Imperial League of Australia and other bodies representing ex-servicemen. Having attended conferences with representatives of the league and having met representatives of totally and permanently incapacitated exservicemen, I want to say, in all frankness and sincerity, that I consider their claims on the national productivity and national prosperity to be moderate in the extreme, if I may use such an apparent contradiction. The Government ought to be impressed by the moderation of the increases asked for.

These days, we are accustomed to asking for the limit in the expectation that we may set half what we have sought, but these people have come along with the most modest and most moderate claims. I hope, therefore, that the Government will consider their needs seriously and sincerely, and that it will not forget that it is eight years since the dependent wives and children of certain classes of war pensioners received increases in their pensions. Eight years of increased production and greater prosperity have gone by, and I trust that the Government has not forgotten its promise to review the means test in a comprehensive way.

Last year, in the debate on the Social Services Bill 1959, the Prime Minister (Mr. Menzies) said -

Although the Government has not felt able to deal with the means test or, in particular, the property means test, in the Budget and in this measure, that does not mean that we regard the problem as closed or as finally disposed of. On the contrary, there are still many problems to be worked out, and this, no doubt, is one of the most contentious of them.

I have, some time since, agreed with my colleagues in the Cabinet that it is not always satisfactory to deal with the intricacies of the social services structure at the time when you are considering the broad sweep of Budget preparation, and I therefore propose to have this problem, and those problems allied to it, very carefully examined by the Government well before the preparation of the next Budget. I say that because I know that the problem is difficult, and I believe that it requires concentrated attention and a good deal of close study.

I assumed, as, I think, did everybody else, that the Government would have taken social services separately, and particularly the means test, and would have brought down a measure in the current sessional period rather than wait for the next Budget sitting. That is what the Prime Minister seemed to me to be saying, and I am sure that that was how the great multitude of the people outside this Parliament interpreted him.

In spite of those statements, the Budget session came to a close without any indication that the means test would be eased, although such action is greatly desired in the community. I sincerely hope that the Government will bring down measures in the next Budget session to ease the means test, particularly as it is applied to property ownership. A worthwhile section of the community is being hurt severely by the application of the means test. We hear a great deal of talk about our prosperity and the affluent state of the economy, yet this Government is neglecting the needs of many worthy people.

I strongly urge the Government, first, to give immediate attention to the needs of that sector of the economy which is so vital to our future prosperity and national development and, secondly, to have regard for those people in the Australian community who are dependent on social service and repatriation benefits.

Sitting suspended from 5.56 to 8 p.m.

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