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Wednesday, 26 September 1906

Senator O'KEEFE (TASMANIA) E. - That is a very pertinent interjection which I expected to hear. It will be remembered that when the Tariff was sent up to the Senate, it provided for a duty of 3d. per lb. on tea, and 3d. per gallon on kerosene. It has been estimated that, if imposed, a duty of 3d. per lb. on tea and 6d. per gallon on kerosene would yield between £700,000 and £800,000 to the Commonwealth.

Senator Clemons - How much would be Tasmania's share?

Senator O'KEEFE - I d I do not think it is necessary for us to consider that question. What we have to consider is, what would be her share of the proposed expenditure calculated on a population basis. It would be £68,000.

Senator Clemons - What would be her share of the revenue raised by the special duties ?

Senator O'KEEFE - T - That does not matter in the slightest degree.

Senator Clemons - How does the honorable senator propose to provide the shortage ?

Senator O'KEEFE - M - My idea is that if £750,000 - that is, one-half of the sum required - be raised from Customs duties on tea and kerosene, then, assuming that there are no other taxable articles which would yield anything like a fair amount of revenue forthe purpose, I would resort to direct taxation in order to get the balance. So far as I can estimate from information I have obtained, the graduated land tax on unimproved values with an exemption of £5,000 projected by the Federal Labour Party--

Senator Clemons - But the honorable senator calls that a penal tax. not a revenue tax.

Senator O'KEEFE - Nev Never mind whether it is penal or not. It is estimated on fairly good ground that, for a certain time at least, it would provide a revenue of £500,000 a year. I do not think that I need be asked to consider what amount Tasmania would raise by the imposition of Customs duties on tea and kerosene. The question is whether, by the imposition of such duties throughout the Commonwealth, and by the levying of a direct land tax, we could make up a revenue of £1,500.000 for the purpose of providing old-age pensions.

Senator Clemons - The honorable senator would practically ear-mark the revenue from the land tax for the pensions fund?

SenatorO'KEEFE. - I donot think that it could be ear-marked for a better purpose. I fancy, from his interjection, that the honorable senator and I are looking at the question from different standpoints. I began by saying that, like myself, he is in favour of granting old-age pensions as soon as he can see that the money can be provided without doing injury to Tasmania. I am. still left in the dark as to whether I am right in that supposition.

Senator Clemons - I have said here dozens of times that I believe in the principle of old-age pensions. Hansard will prove my statement.

Senator O'KEEFE - I a I am glad to. hear the explanation, because one does not always remember what has appeared in Hansard. The honorable senator is in the same position as Senator Dobson, who, I think, deserves the thanks of the Senate for his extremely interesting speech. Certainly, he has made himself acquainted withevery authority on the subject. Those two honorable senators say that they are in favour of a. system of old-age pensions, but that their State cannot afford the expenditure at the present time. I am in favour of a system of oldage pensions. Certainly, it would bea hardship if the sum of £68,000 were taker out of the revenue now returnable to Tas mania. Although I am pledged tovote in favour of old-age pensions, still, ifthe

Bill proposed to allocate to that purpose a sum from that source, I should have to consider very seriously whether I would bejustified in voting for it or not.

Senator Clemons - That is all I said. I carefully said that the Bill would not yield anything like enough for the purpose.

Senator O'KEEFE - I - It might yield a little or much. We can only estimate what it will yield from our knowledge of what similar duties have yielded.

Senator Clemons - I also said that it is a wrong source from which to get money for this purpose.

Senator O'KEEFE - Did Did not a number of the free-traders, when we were considering the Tariff, assert that tea and kerosene were articles which could fairly be taxed for revenue purposes?

Senator Clemons - Yes.

Senator O'KEEFE - I d I do not remember for the moment whether the honorable senator voted for or against the duty on tea.

Senator Clemons - I voted for it.

Senator O'KEEFE - At At that time the honorable senator was in favour of retaining the duty of 3d. per lb. on tea, and 3d. per gallon on kerosene. Why ? In the interests of the revenue of Tasmania.

Senator Clemons - Exactly.

Senator O'KEEFE - I - If those duties had been retained, they would have yielded additional revenue to Tasmania. Yet the honorable senator says now that he is opposed to their re-impositibn.

Senator Clemons - F - For this specific purpose, because I think it is cruel to say to these old people : ' ' We intend to give you old-age pensions, and to . make you provide most of the money yourselves."

Senator O'KEEFE - T - That argument has been done to death. My honorable friend leaves it to be understood that, if the Government were empowered to impose special duties on tea and kerosene for a special purpose, the taxation would fall upon the poor old people who were intended to get the benefit of the legislation. That is a hollow argument. Is it only those persons who use tea and kerosene? Do not a very large proportion of the population, of Australia use them ? And would they not also have to pay the duties, if imposed ? What proportion of the total population would 'be entitled to old-age pensions? I suppose that, after deducting the infants under a certain ace.90 per cent, of the population are heavy teadrinkers, and that probably 50 per cent, use kerosene, and therefore would pay the duty,' if imposed.

Senator Clemons - No.

Senator O'KEEFE - I - I do not know the exact percentage;, because I have never seen any figures.

Senator Clemons - How much kerosene is used for lighting purposes now in the large cities?

Senator O'KEEFE - Doe Does the honorable senator mean to say that there is a large proportion of the aged people of this country who would draw the old-age pensions ifthey were established? What is that proportion, and what is the proportion of those who would pay the tax on tea? I venture to say that 90 per cent. of the people of this country over a certain age would pay their share of the tax on tea. It is idle to say that it is cruel to impose taxes on tea and kerosene because those taxes would strike at the poor people who would receive the benefit.

Senator Clemons - I did hot use that argument. What I said was that it is the sort of argument that might be used by some honorable senators opposite.

Senator O'KEEFE - I - It appears to me to be perfectly clear that almost every one of the people who will derive benefit from an old-age pensions scheme will pay their share towards it.Ninety per cent. of them use tea, and a very large proportion consume kerosene. Another argument used against what is proposed is that the time is not opportune. When will it be Opportune? I do not like to say it, but I am somewhat doubtful of the sincerity of those who profess to believe in old-age pensions, and yet, when any definite scheme is put before them, say that they are opposed to it because it is not opportune. If we desire to see a Federal old-age pensions scheme established, we ought not to allow any small obstacles to stand in the way. We ought, indeed, to be willing to forego some of our- opinions as to the way in which the money should be realized, in order to secure the great end we have in view. The argument used by Senator Clemons, that he is opposed to placing taxes on tea and kerosene for this particular purpose, seems to me to be absurd in view of the fact that in the next breath -he said that he was in favour of old-age pensions, and wouldpay them on the security of the revenue. How would he propose to raise that revenue? His arguments seem to me to be mutually destructive of each other. I fancy that the honorable senator's zeal to defeat this measure has led him into a position that cannot be logically maintained

Senator Dobson - Does the honorable senator suggest that in Tasmania we should have both a Federal and a State land tax?

Senator O'KEEFE - Whe When the proper time comes I will explain my views on that subject, but perhaps I may say now, in reply to the 'honorable senator's inquiry, that I am in favour of the imposition of a direct tax on the unimproved value of land, with an exemption up to £5,000.

Senator Dobson - In addition to the State tax?

Senator O'KEEFE - I - In addition to the State tax, because there are very few estates in Tasmania that would be 'hit bv it.

Senator Dobson - Because it would only rob a few, the honorable senator would rob them ?

Senator O'KEEFE - Tha That is a very big question, upon which mv honorable friend and I might argue until Christmas without coming any nearer to an agreement. While the primary purpose of the land tax advocated by the Federal Labour Party is to assist. in breaking up large estates, I also" think that it would, for a time at any rate, raise a certain amount of revenue - probably £500,000 a year, which, in addition to the £750,000 estimated to be derived from tea and kerosene, would ma'ke up about the amount required - according to the estimate of the Old-Age Pensions Commission - for the purpose we have in view. I confess that I should have preferred that some other means had been projected by the Government for finding the money.

Senator Dobson - Hear, hear.

Senator O'KEEFE - I - I wonder whether the honorable senator will say "Hear, hear" to my next sentence. I should prefer that those means were the na tiona! i- "zation of the tobacco industry of Australia.

Senator Dobson - Oh !

Senator O'KEEFE - T - There is no "Hear, hear." this time ! The difference between the honorable senator and myself is that I believe we should gain a great deal more revenue bv nationalizing the tobacco industry than we derive from it through Customs and Excise under private ownership, and that that difference would go a con siderable way towards paying old-age pensions. That is" why I have said that I should favour other means of raising the revenue than that projected by the Government. Does my honorable friend agree with me in that?

Senator Dobson - Certainly not.

Senator O'KEEFE - The Then it all comes back to this - does he agree that we should raise the money by direct taxation ? Suppose I were to consent to assist to kick this Bill out - will my honorable friends opposite, supposing they have a chance in the near future, agree to impose direct taxation, either on incomes or land, for the purposes of old-age pensions ?

Senator Dobson - I will agree to take the money out of the Consolidated Revenue.

Senator O'KEEFE - As As it stands at present ?

Senator Dobson - Of course, it would have to be made lip for the purpose.

Senator O'KEEFE - T - The Government proposes to make it up by imposing taxes on tea and kerosene. Will my honorable friends. Senators Dobson, Macfarlane, and Clemons tell me plainly what sources of revenue they would prefer. If they do not, though I do not like to question their sincerity, I must be pardoned for saying that people outside will be excusable if they question the sincerity of any man who says, " I want old-age pensions as soon as we can get them," but who, when you ask him from what source he proposes to raise the money, gives you no definite answer, except that he would take it from the Consolidated Revenue. I am quite sure that Senator Dobson would never agree to- take the money from the Consolidated Revenue as it stands at present. Would he; agree that the £250,000 returned to Tasmania from Customs and Excise should be decreased by £68,000 for the purposes of old-age pensions ?

Senator Dobson - I have already said that I believe in the recommendation of the Royal Commission that the money should come out of the Consolidated Revenue.

Senator O'KEEFE - The Then I may take it that if the Government brought in a scheme under which thev proposed to take the money out of the Consolidated Revenue, the honorable senator would not object to it ?

Senator Dobson - It would all depend on what the scheme was.

Senator O'KEEFE - S - Suppose it were proposed to pay 7s. or 8s. a week?

Senator Dobson - I have said that I believe that we can pav that.

Senator O'KEEFE - I - If it would cost £750,000 per annum to pay a pension of 7s. or 8s. a week, how much would it cost to pay a pension of 10s. ?

Senator Dobson - Probably £1,000,000. But I propose that the workers should pay their share.

Senator O'KEEFE - The The honorable senator said just now that he would agree that the pension should be paid 011^ of the Consolidated Revenue.

The PRESIDENT - Senator Dobsonhas spent an hour and a half in explaining what his scheme is.

Senator O'KEEFE - A - Any sum that is taken from the Consolidated Revenue for this purpose will necessarily decrease the amount returnable to Tasmania. It is because I believe that the Treasurer of Tasmania has sufficient difficulties in his path already that I am not favorable to any policy which would decrease that . revenue. I therefore favour giving the people an opportunity, by referendum, to intrust the Federal Parliament with authority to tax special articles for this special purpose. And, after all, any proposal for taxing tea and kerosene - or, indeed, any other article - must be passed by Parliament. It cannot be agreed to otherwise. We have been talking for five years in the Federal Parliament at one time and another about the necessity for granting old-age pensions: These Commonwealth old-age pensions are intended to take the place of the pensions now paid in New South Wales and Victoria, and to make similar provision throughout the States. , I can say that I am thoroughly tired of advocating old-age pensions, both on the platform and in this Parliament, without taking some definite step to establish them : and this is absolutely the first time I have had an opportunity to vote on the direct question. It is true that the Bill does not mention the exact purposes to which this revenue shall be applied, and, perhaps, it would be better if it were stated in the Bill that the intention is to establish old-age pensions. I am not altogether in love with the means proposed for raising the revenue, but, like a great many people in Australia I aim prepared in this matter to take half a loaf rather than no bread. Even if we allow the truth of all the statements we have heard about the cruelty of such taxation to poor people, T believe that the community generally will be quite, willing to pay their share, provided the burden is equally distributed, in order to make provision for our aged poor. Last night Senator Drake mentioned that at the expiration of four years the Braddon section will cease to operate, thereby inferring that this question should be postponed until then, and the necessary money provided out of the Consolidated Revenue.

Senator Drake - I did not say that; I was thinking about the interest on " the States debts as well.

Senator O'KEEFE -Th -The honorable senator in effect asked why we should tinker with the question now, when, at the expiration of four years, it was not imperative that the Braddon section should be retained! and the whole question might be reopened.

Senator Drake - That is so; but what the honorable senator was suggesting just now was what the Minister suggested, namely, that we should wait for three years, and then take the necessary funds out of the Consolidated Revenue. .

Senator O'KEEFE - I k I know that if Parliament so decides, the Braddon section, at the expiration of three years, will cease to operate. I hope and .believe, however, that there will be substituted fixed payments, or some other plan, so as to insure that the finances of the States shall not be suddenly and entirely disorganized. I believe that in the opinion of the large- majority of the members of the F'ederal Parliament, the States should continue to have returned to them some proportion of the Customs and Excise revenue; and it appears to me that there is not a great deal of difference between discussing this question now and discussing it three or four years hence. Whilst I certainly should have preferred some other method of raising the revenue, I welcome the Bill as a definite attempt to deal with a question which ought to have been dealt with loner ago. I think the Government are honest in their intention when they argue that a very considerable proportion qf the necessary revenue may be obtained if the power sought by the Bill be conferred. It is not said by the Government that the special tax on the two articles, which" have been mentioned, will provide the whole of the necessary funds; and to the Governmnent of the day must be left the duty of providing the balance. Mv own hope is that that balance may be obtained by the imposition of a duty on the unimproved value of land, with an exemption of £5,000. I believe that from those two sources sufficient revenue would be obtained; and I support the second reading of the Bill as an honest attempt to deal with a matter which has agitated the nub.lic mind for a considerable time.

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