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Wednesday, 26 September 1906

Senator BEST (Victoria) .- I receive with great respect the opinions expressed by Senator Turley, whilst I am unable to follow the line of reasoning which has induced him to come to his present conclusions. I look at the matter in this way : We all regard it as the duty of the Commonwealth to provide for its infirm poor. The Government, feeling that that is acknowledged, not only by members of the Federal Parliament, but almost universally by the people, wish to make some general proposition whereby a scheme of old-age pensions may be established. They very naturally say, " Oh, what use is it to offer suggestions for the establishment of an oldage pensions scheme unless we have a substantial fund available for the purpose." The difficulty of providing the means for the payment of old-age pensions is the one they have to meet. In the circumstances they have naturally listened to a suggestion which has been received, if not universally, at least by a substantial section of the community, that there are two articles the taxation of which would prove a substantial foundation for a fund which would enable them to formulate an effective scheme. Tea arid kerosene have been mentioned, I suppose, because, so far as tea is concerned, it is a beverage that is universally used. Kerosene is not used so universally, but there is a very large consumption of the article by a big section of the community. It is admitted that the duties on these articles would produce a revenue of £750,000 or £800.000. That would be sufficient to provide the foundation for the necessary fund, and we know that it would not be difficult to find the balance required to make up the sum of £1,200,000, which is the estimate of the amount required to give effect to a Commonwealth old-age pensions scheme.

Senator Stewart - How would the balance be made up?

Senator BEST - Various suggestions have been made. It might be made up by the imposition of taxation to the extent of to per cent, on articles in the existing free list. That, of course, must be done with very great discretion; but there are many items in the list which would bear taxation. Again, we could fall back upon the balance of the one-fourth of Customs and Excise revenue which we have the right to retain. We could certainly make up the balance of -the £1,200,000 from that source. The great matter is to secure the foundation of the necessary fund, and it would be secured by the taxation of the two items to. which I have referred.

Senator Stewart - How does the honorable senator justify the levying of special duties for a particular purpose?

Senator BEST - Senator Stewart justifies the levying of a special duty for a particular purpose, because he advocates a land tax.

Senator Turley - The receipts would go into the general revenue.

Senator BEST - We could put the revenue derived from the proposed special duties into the general revenue, if that would satisfy the honorable senator.

Senator Millen - Then what do we want this Bill for?

Senator BEST - For the obvious reason that, in order to obtain £800,000 under existing conditions during the operation of the Braddon section, we should require to raise four times the amount. The purpose of the Bill really is to anticipate what we shall be able to do in three or four years' time without such a measure, and it is necessary to do that if old-age pensions are to be paid at an early date.

Senator Turley - The matter must be referred to the people.

Senator BEST - It is proposed to refer this measure to the people. If the people are satisfied that the taxation proposed would "be unequal in its incidence, they will reject the Bill when it is submitted to them. Senator Turley will admit- that we have so far never discovered any means of taxation which is perfect in its incidence, and I agree, with the honorable senator that the proper course for us to follow would be to pay the money required for old-age pensions out of the Consolidated Revenue. As we will lie unable tr> do that for three or four years, we should take the next best course, and that is to levy taxation, which will provide a substantial fund from which we can pay old-age pensions. That is what is intended to be done. I, as one who" favours the earliest possible consummation of a scheme for this purpose, am prepared to take this practical means of solving that difficulty, rather than embark upon methods of taxation which have more or less support, but which at the same time would involve great delay. My honorable friend has referred to a land tax.

Senator Stewart - Tax the poor !

Senator BEST - It is wrong on the part of my honorable friend to make that suggestion.

Senator Stewart - That is a fact from which the honorable senator cannot escape.

Senator BEST - I shall not pretend to argue against an interjection. My honorable friend, will see that it is not as though the Parliament were being, asked to pass a Bill to tax the poor.

Senator Stewart - We abolished the duties on tea and kerosene because we thought that they were bad.

Senator BEST - All that the Parliament is asked to do is to submit to the mass of the people a Bill for the purpose of ascertaining whether they are prepared to sanction that particular source of taxation.

Senator Turley - That should be no excuse for passing the legislation.

Senator BEST - Of course it should not ; but my honorable friend will see that the proposal of the Government commands a sufficient support to justify its submission to the people by the fact that it has been received with a considerable degree of popularity by the people, and that that feeling has been echoed by a representative Chamber. The latter fact alone, to my mind, is a justification for the submission of the Bill to the electors. I admit, with my honorable friend, that we should not be justified in submitting to them a flimsy, ill-considered proposal.

Senator Millen - Then the honorable senator will vote against the Bill ?

Senator BEST - It is that reason which will prompt me to vote for the Bill. We enjoy a bicameral system. One section of the Parliament has desired that this means of formulating a scheme of old-age pensions shall be submitted to the people; and that section, is more representative than we are.

Senator Stewart - No; not nearly so much.

Senator BEST - D - Does my honorable friend seriously make that remark?

Senator Stewart - Yes, because no member of the other House represents more than a section of the people in his State.

Senator BEST - According to the scheme of democratic representation in the other Chamber, it is more representative than is the Senate.

Senator Millen - Of what?

Senator BEST - Of the people.

Senator Millen - I should like to know any member of that House who could claim, from the votes recorded, to be more representative of the people than I am.

Senator BEST - I am simply dealing with the argument that this is a mere flimsy proposal. It commands a substantial support, and that in itself furnishes a justification for its submission to the people. In the "next place, the States Premiers, representative as they are of their several States, have with a large degree of approval sanctioned the course which is proposed to be taken.

Senator Millen - No.

Senator BEST - The Bill is practically submitted in accordance with a general understanding arrived at with the States Premiers.

Senator Macfarlane - No.

Senator BEST - Of course I do not pretend to bear in mind everything which, has taken place at the Conference. But, so far as a few minutes would permit, I have examined the report of the Conference of Commonwealth and State Premiers and Ministers held in Sydney in April, 1906, and I shall now read what it contains on this subject -

Mr. DAVIES.Would you say anything about Old-age Pensions in connexion with the Braddon section proposals?

Mr. KIDSTON.There was a proposal made in Hobart, that the Commonwealth Government should impose certain special duties of Customs for the purpose of raising sufficient revenue to pay the Old-age Pensions, and that with regard to those special duties the States should express their willingness to surrender their claim to three-fourths of those duties in order to enable the Commonwealth Government to provide revenue for Old-age Pensions. Now, if we are goingto ask the Federal Government to make the Braddon section perpetual -

Senator Turley - If the Braddon clause is going to be made perpetual ?

Senator BEST - I do not attach that meaning to the statement.

Senator Millen - Surely, there is no other meaning that could be attached to it.

Senator BEST - Moreover, that is really beside the question.

Senator Turley - Oh, no; that is the condition.

Senator BEST - It proceeds - in order to give us security in regard to our three-fourths of the revenue, it is a wise thing on our part to make it clear to the Federal Prime Minister that that request for an amendment of the Braddon section is to be taken as being in perfect accord with their imposing certain Customs duties for the purpose of raising revenue for Old-age Pensons. I am exceedingly doubtful as to the precedent, but it is owing to the peculiar circumstances in which we find ourselves. The Federal Parliament may say to us, " If you go in for perpetuation of the Braddon section, there can be no Old-age Pensions."

Mr. EVANS.The other day we passed the following resolution, moved by Mr. Kidston : - " That it is incumbent on the Federal Government if it adopts an Old-age Pension scheme, to provide the revenue required tofinance it without trenching upon the 'Customs revenue now returned to the States."

Mr. DAVIES.Yes, but that does not indicate that they might do it by means ofthe Customs duty ; that implies that they might raise it by an income-tax or a land tax, or some other tax.

Mr. KIDSTON.We might add to that resolution, so as to make it clear, the words, " In the event of special Customs duties being imposed for this purpose the States will waive their claim to their three-fourths of those particular duties."

Mr. Peake.That would involve an alteration of the Constitution.

Mr. Swinburne.There might be great danger in that. If they impose special duties on certain things and allocate them, they might afterwards take off duties on other things and reduce our three-fourths.

Mr. KIDSTON.I quite understand the danger, but we arc in a very difficult position with regard to this matter.

Mr. Davies.They could do it only for that special purpose, therefore they could not take off other duties without reducing what they required for other purposes.

Mr. Price.Leave it as it is;thatis the best way.

Mr. KIDSTON.It is well to have it made clear that if the Federal Government adopt this method of raising revenue for Old-age Pensions the Slates Governments are quite prepared to waive their claim to three-fourths of that special "revenue.

Mr. Peake.You cannot waive it ; it is given to you under the Constitution.

Mr. KIDSTON.You can do anything if you go the right way about it.

Mr. DAVIES.You would have to amend the Constitution to make the Braddon section perpetual, and this might be part of the amendment.

Mr. KIDSTON.Would the President make that clear to Mr. Deakin with reference to the Old-Age Pensions question.

The PRESIDENT - I take it that if you want a fresh resolution you had better propose it.

Mr. EVANS.There is no need for any fresh resolution. We have passed a resolution dealing with Old-age Pensions. All that is required is to make this matter clear to Mr. Deakin.

The PRESIDENT - I can assure you that Mr. Deakin knows about it.

Senator Turley - On the understanding that the Braddon blot was to be made perpetual, they agreed to the proposal.

Senator BEST - The fact that the proposal has not only received the sanction of the other Chamber but has also met with some approval from the States Premiers, is a justification for its submission to the mass of the people. Is there anything unfair or unreasonable in asking the electors whether they approve of this method of providing a fund for the payment of old-age pensions? If they hold the view that the proposed tax would be unequal ' in its incidence they will only have to reject the Bill. Surely, Senator Turley will see that that is a substantial advance on the part of the Government towards the consummationof a proposal which has been so much talked about ! Are the Government to be reproached because they have made a practical suggestion which has met with such popular and representative approval? I think not. In his thoughtful speech, and in his advocacy of the land tax for this purpose, Senator Turley is running the risk of losing the substance while he is grasping at the shadow. Theoretically, his land tax may commend itself to him. But. if he introduced his proposal, certainly he would not meet with large support- from hispresent allies, who are seeking to secure the rejection of this Bill.

Senator Clemons - We have heard enough about the ally business.

Senator BEST - But it is a fact, for all that.

Senator Clemons - The honorable senator is not an ally. He is something much lower than that.

Senator BEST - I should be very sorry at any time to be an ally of my honorable friend.

Senator Clemons - The honorable senator will not have very much chance, if I can help it.

Senator BEST - That is my good fortune.

Senator Clemons - The time may come when it will not be the honorable senator's good fortune.

Senator BEST - That, perhaps, is a matter which may not be regretted, but it is no cause for an exhibition of temper.

Senator Clemons - Well, leave the ally question alone.

Senator Turley - Doesthe honorable senator never vote on a question when honorable senators on the opposite side intend voting with him ?

Senator BEST - It was not by way of reproach that I made that suggestion ; I did not intend to convey that meaning at all. If we desire to get a substantial advance towards the consummation, of an oldage pensions scheme, we should accept the substantial proposal which is submitted rather than seek to deal with theoretical proposals which are not within reasonable means of consummation. Senator Turley will see that, in regard to a land tax, there is no unanimity. The party to which he belongs had advocated a progressive land tax. But the progressive land tax which he advocates is quite opposed to the kind of land tax which was advocated by the Old-age Pensions Commission.

Senator Dobson - But the Prime Minister has swallowed the progressive land tax.

Senator BEST - That, of course, I do not know.

Senator Dobson - The honorable senator does know.

Senator BEST - I do not know anything of the kind.

Senator Dobson - We all know that he has.

Senator BEST - I am pointing out to Senator Turley first, that there is no unanimity in regard to a land tax, and, secondly, that a proposal for a land tax, no matter what form the tax might take, would meet with very strenuous opposition. It would mean, at the outset, a very considerable difference with the States.

Senator Turley - This proposal is going to meet with a great deal of opposition.

Senator BEST - That is for the people to say. Next, I urge that the States themselves have so far regarded the land as a source of local taxation. In some States thereare substantial land taxes at present. If it is suggested that there is to be a Federal land tax in addition, honorable senators will begin to realize the difficulties associated with its imposition for the purposes of old-age pensions. In all these circumstances, I cannot help feeling that when a substantial proposition is placed before us it is our duty to take advantage of it, particularly as it means the submission of the question' to the people themselves. It has been argued that even if the Premiers have approved of what is proposed, there is, so to speak, a sort of conspiracy on the part of the Federal and States Governments for the purposes of breaking the Constitution. I cannot see the matter in that light. There is no suggestion to break the Constitution. Allthatis proposed is to alter it in a legal way.

SenatorMillen. - To break the spirit of the compact all the same.

Senator BEST - Only with the consent of the parties to the compact.

Senator Millen - Not necessarily of all the parties.

Senator BEST - The compact is contained in the Constitution, which provides for it's own amendment in the manner set: out in it.

Senator Millen - Technically, the honorable senator is right.

Senator BEST - It is for the people themselves to say whether they desire an alteration in this direction.

Senator Millen - The honorable and learned senator will recognise that a different assent is requisite for the amendment than was required for the original document.

Senator BEST - In matters of this kind, involving Federal finance, it is most desirable that we should consult the States, and that whatever we do should be done with their approval and concurrence. We, as a Federation, . should endeavour to work with the States in everyrespect. This particular scheme is one that, at all events, has met with the substantial approval of the representatives of the States, and one which furnishes the only substantial proposal vet put forward for the consummation of' an old-age pensions scheme.

Senator Clemons - That is justwhat it does not do. If the taxes are imposed they will not raise enough for old-age pensions purposes. Ifthe supporters of the Bill succeed they fail at the same time.

Senator BEST - It is contemplated that £800,000 will be raised by this means. My view is that the money should be paid out of the Consolidated Revenue, and I think that the amount mentioned, with the balance of the one-fourth Customs and Excise revenue, that is within the command of the Commonwealth Parliament, will supply the necessary amount to make up the old-age pensions fund.

Senator Pearce - In any case, this does not exhaust our taxing power.

Senator BEST - Of course, it does not. I further point out to my honorable friends who oppose this Bill, that when they can induce the people to support a land tax for the purpose of old-age pensions then, and then only, will it be time enough to revoke the taxation which it is proposed to raiseunder this Bill. But at present this is the only practical means of dealing with the question.

Senator Stewart - No.

Senator BEST - Well, I submit my own view with the greatest respect and regard for those who differ from me. I feel that, from the point of view of those who desire to bring about an old-age pensions scheme as rapidly as possible, this is our only way of effecting our purpose. If the Bill is rejected, there does not seem to be much chance of consummating an old-age pensions scheme for many years to come.

Senator Stewart - Why not?

Senator BEST - Not until the restrictions of the Braddon,section are removed, at all events. According to my view, this is the most substantial advance that has been made in the desired direction, and for that reason I propose to support the measure.

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