1950-11-21 19 1 2 REPS 2688 0 (louse of Representatives. 'Tuesday, XI November, 1950. Mr'. Deputy Speaker (Mr. 0. P. Adermann)took the chair at '2.30 p.m., and read prayers. HOUR OF MEETING. Motion (by Mr. Menzies) agreed to - That the House, at its rising, adjourn to to-morrow, at 11 a.m. THE PARLIAMENT. Mr. BEAZLEY. - I ask the Prime Minister a .question which arises from the rumours that the Government intends to terminate the current sittings of this House on the' 8th December instead of the 14th December because of accommodation problems in Canberra. "Will it be possible to set aside some time during the remainder of the sessional period for honorable members to discuss and finalize the motion that has been proposed by the honorable member for Curtin with respect to aborigines and also the report in relation to the suggested payment of a special subsistence allowance to former prisoners of war ? Mr. MENZIES-I cannot answer the question positively, but I hope to have both matters discussed. I have noticed the speculation on the probable date of the termination of this sessional period to which the honorable member has referred. The position has been a little complicated by the fact that the Government has invited delegates to the Commonwealth Parliamentary Association conference in New Zealand, which is _ being attended by representatives of this Parliament, to come to Canberra on their way back from the dominion. I am sure that all honorable members agree that such a visit is most desirable. I am now investigating the possibility of arranging for the accommodation of those delegates over the week-end that will begin on the 8th December, but there is no certainty that that date will ehime with their arrangements. I cannot say positively upon what date the Parliament will rise for the Christmas recess. There is no intrinsic reason why we should not finish the business pf this House by the 8th December. I shall certainly keep in mind the two matters that have been mentioned by the honorable member. Mr, CALWELL.- Twice during the last four or five weeks the Treasurer has promised the House that he will introduce legislation during the current parliamentary sittings for the purposes of dealing _ with excess profits and controlling capital issues. Does the right honorable gentleman adhere to his promise that the bills will be introduced during the current sessional period? If he has changed his mind, when does he propose to make an announcement to that effect? Rumour has it that the bills have not been drafted yet. Mr. FADDEN.-The honorable member knows what rumour is. It is my intention to bring down the bills, if at all physically possible, during the current sessional period. KOREA. Mr. GRAHAM.-"Will the Minister for Defence consider issuing a special distinguishing shoulder badge of the type worn by British Commonwealth Occupation Force personnel to the members of all Australian services, who are fighting with the United Nations forces in Korea? Will the Minister alao consider discussing with representatives of the United Kingdom Government the issuing of a Korean campaign medal? Mr.McBRIDE - I shall discuss with my colleagues, the Minister for the Navy and Minister for the Army and the Minister for Air, the suggestion for the issue of a shoulder badge for Australian servicemen who are engaged in the Korean campaign. The suggestion that a Korean campaign medal should also be issued will be discussed with the United Kingdom authorities at an early date. Mr.WIGHT. - I ask the Minister for External Affairs a question relative to the troops at present engaged in combat in Korea. Since the troops of the various nations engaged are fighting under the banner of the United Nations, and since all of them are giving the same service, will he say whether consideration has been given by the United Nations to having all these troops placed on the same rates of pay? Mr. SPENDER.- The answer is " No ". No consideration has been given to that matter by the United Nations. Mr. MULCAHY.-Will the Minister for the Army assure the House that the Australian soldiers who have taken part in the rapid advance from the temperate region of South Korea to the more frigid zone in North Korea are fully equipped for the climatic conditions which they are encountering? Mr. FRANCIS.- I can give the honorable member an unqualified assurance on that score. The Government has obtained from the United States authorities special equipment that was developed as a result of three and a half years of research under Arctic conditions in Alaska. Australian troops in Korea have been wearing such clothing for the last fortnight. DENTAL SERVICES. Mr. CHAMBERS.- In view of the tremendous strain imposed on the family purse by dental treatment and the great importance of proper dental treatment to the health of the Australian community, will the Minister for Health say whether he intends to introduce dental services as part of the national health scheme, and, if so, when? Sir EARLEPAGE.- The Government intends to deal first of all with the medical aspect and later with the dental aspect of the national health service. PAPUA AND NEW GUINEA. Mr. McCOLM.- Can the Minister for External Territories say whether it is a fact that some difficulty is being experienced in effecting shipments of copra to overseas markets, particularly to the United Kingdom, from certain ports in the Territory of Papua and New Guinea,' especially from Madang? Will the Minister say what action is being taken to replace the wharfs at Port Moresby, Samarai, Madang and Kavieng? I understand that recently the master of a Bank Line steamer refused to enter the port of Madang because he believed that by doing so he would endanger his ship. Mr. SPENDER.-It is a fact that difficulties have occurred in New Guinea because of the deficiencies in wharfage equipment for the shipments of copra from New Guinea. It is also true that some time ago, as the result of representations made to my department, Madang was excluded by a particular vessel of the Bank Line. However, provision has since been made for vessels of that line to take two loads of copra from Madang this month. The honorable gentleman will remember that during the war the entire wharfage equipment in New Guinea was devastated. However, I think that the present position could be summarized as follows: - Tenders have been called for the improvement of the wharfage facilities at Port Moresby, and they close this month. The wharf at Lae is now in use. Tenders have been called and accepted for work at Madang, and preliminary work is already being carried out. Similarly, tenders have been called for and accepted for work on the wharf at Samarai, and work has actually been commenced. At Kavieng work is already in progress. I can assure the honorable gentleman that the present Government has not lost any time in dealing with the matter he has mentioned. Mr. GEORGELAWSON.- Has the attention of the Minister for External Territories been drawn to a press statement in respect of the unrest among public servants in New Guinea, as reported by the secretary of the Public Service Association? Is it a fact that, as reported, public servants in New Guinea have been called upon to work longer hours and have protested about the matter? Is it also a fact that the tropical allowance of £150 a year to married women has been withdrawn, and that this has resulted in many such women leaving positions with the administration and accepting employment with private firms at a higher salary, including £150 tropical allowance? If the report to which I have referred is correct, does the Minister consider the action taken by the Government in that, regard tends to create and maintain efficiency, contentment and loyal service within the department ? Mr. SPENDER.-My attention has not been drawn to the press item to which the honorable member has referred, but I am aware of the subject of which he has spoken. I shall endeavour to make a statement before the session closes, which will indicate the extent to which this Government has dealt with the civil service in New Guinea, how officers have been reclassified, and how, in point of fact, it will be found that generally officers have had some of their grievances which had been outstanding for some time, remedied by the Government. Some representations were made to me by the Public Service Association in relation to hours of work of public servants hNew Guinea, before I left Australia to go overseas. The officers concerned protested against the extension of hours from 34 to 36^ weekly. I drew attention to the benefits given to the public servants in New Guinea by the Government, to the great shortage of man-power in the territory and to the tremendous difficulties that we had to overcome there. I said that I felt that in the circumstances an increase of hour? from 34 to weekly, in view of the additional advantages we had given them, could not be considered out of place. I understand that certain representations during my absence have been made to the Prime Minister on the same subject and that he promised that they would be referred to me upon my return. I shall consider the representations, but I can say to the honorable member that at the present time I do not see any prospect of the decision being altered. HEALTH AND MEDICAL SERVICES. Mr. WARD.- "Will the Minister for Health say whether it is a fact that under his Government's allegedly free medical and pharmaceutical benefits scheme for aged, invalid, widow and service pensioners, a special charge of 5s. is proposed in each case in which a doctor is required to attend a patient after 6 p.m. and that this charge will have to be paid by the pensioners? I understand that, in addition, whenever a doctor is required to travel beyond three miles to attend a pensioner a special charge of 5s. a mile will be imposed, of which one-fifth will have to be borne by the pensioners. If those are facts, will the Minister take action either to have the charges deleted or else discontinue the use of the term " free " in describing the Government's health scheme? Sir EARLEPAGE. - Treatment of pensioners generally in their homes will be free, but a charge will be made against the Government for visits by doctors to pensioners after the normal hours. Mr. WARD- Does that also apply to visits made to patients at any time after 6 p.m. ? Sir EARLEPAGE.- Yes. In connexion with the mileage charge, the position is that if a mileage fee is agreed to - and that is at present under discussion and has not "yet been settled - the Government will pay four-fifths and the pensioner will pay one-fifth of the charge. The reason for imposing some charge on patients is to dissuade- people from sending unnecessarily for doctors who will have to travel long distances or to attend them at difficult hours. Provision is being made in the scheme to ensure that the nearest doctor will be called, so that it is expected that the mileage that will be involved will be infinitesimal. In addition to that point, it is absolutely necessary that there should be some charge made so as to provide for proper checks. Mr. ROSEVEAR.-My question to the Minister for Health is supplementary to the question asked by the honorable member for East Sydney. Who was responsible for the printed instructions or the printed intimations to members of the medical profession that they might charge the fee of 5s. for visits made to pensioners after 6 o'clock in the evening? Was it the original intention to make that charge or was the charge subsequently approved? In any case, would the Minister, who does not appear to know anything about the matter, indicate who was responsible for the printing of the instructions to members of the medical profession that they could charge 5s. in the circumstances that I have mentioned ? Sir EARLEPAGE. - I know of no such instruction having been issued. Certainly, I have not issued any instruction of the kind to which the honorable member has referred. WAR GRATUITY. Mr, HANDBY.- As claim forms in connexion with the war gratuity to be paid next year can be obtained only from official post offices, at the moment, and as many country areas have only non-official post offices, which means that many ex-servicemen will have to travel many miles to obtain forms, will the Treasurer confer with the Postmaster-General to ensure that non-official post offices are supplied with such forms for the convenience of ex-service personnel in small outback towns? Mr. Fadden.- I shall be very happy to confer with the Postmaster-General on that matter. COMMONWEALTH JUBILEE CELEBRATIONS. M.r. HAYLEN. - I ask the Prime Minister who thought of the idea of celebrating dic festival of 50 years of federation by importing an operetta or pageant called Hiawatha, which is a dramatization of Longfellow's poem put into verse and music by an American ? The pageant is proposed to be produced by an Englishman. The star is to be a Canadian. .Has anything been written in this country which is suitable for representing the progress of Australia, and has the committee in charge of the celebrations made any inquiries to ascertain whether a local writer can produce an Australian pageant so that Hiawatha will not be foisted on us? Furthermore, is the Prime Minister aware that provision is made in the cast of the pageant for some Red Indian performers? Will the right honorable gentleman indicate whether they would be declared upon their arrival in Australia? Mr. MENZIES.-The answer is "I don't know ". CANBERRA. Dr. NOTT.- My questions are directed to the Minister for National Development. They are as follows: - 1. la the necessity for blackouts of power and light in Canberra due to the shortage of coal in Sydney, or is it due to the unsuitability of the coal supplied to key power stations in New South Wales? 2. Is the generating unit in Canberra able, under optimum conditions, to supply nearly 75 per cent, of all power and light consumed in the Australian Capital Territory; and, if so, will the Government consider the need for immediately installing new plant which will enable the local station to meet all the demands of the Australian Capital Territory for light and power ? 3. What prospects confront the people of the Australian Capital Territory in the forthcoming winter, unless such action is taken, if the power and light supply continues to fail so miserably in summer conditions ? 4. Does the Minister believe that the people of the National Capital and of the Australian Capital Territory generally should have to suffer vexations and inconvenient blackouts because of the hopelessly inefficient generation of electric power in New South Wales? Mr. DEPUTYSPEAKER-Order! I must ask all honorable members to present their questions in a concise form, and to refrain from making speeches. I ask the honorable member for the Australian Capital Territory to complete his question. Dr. NOTT.-Very well, Mr. Deputy Speaker. My last question is as follows: 5. Is it a fact that there is little likelihood of the position improving before the Snowy Mountains hydroelectric scheme comes into operation in approximately four years' time? Mr. CASEY.-Ibelieve that the frequent blackouts in the Australian Capital Territory are due to two causes. The first is the quality rather than the quantity of coal .available in Canberra for power generation, and the second is the dependence to an appreciable extent of the Australian Capital Territory on New South Wales for power. That means that the people of the Australian Capital Territory have to suffer inconvenience similar to that which is suffered by people in New South Wales, particularly in Sydney, and which arises from the power generation problems in New South Wales. I have not full particulars in my mind to enable me to answer all aspects of the honorable member's questions, but I shall obtain the facts and advise him of them as soon as I can. CIVIL AVIATION. Mr. KEKWICK-Is the Minister for Civil Aviation aware teat in recent years Trans-Australia Airlines, has lost a number of highly skilled technicians who, for the purpose of securing their own future, have obtained employment elsewhere because of persistent reports that Trans-Australia Airlines and Australian National Airways Proprietary Limited are likely to be amalgamated? In view of the intention that the Prime Minister clearly stated in his policy-speech that Trans-Australia Airlines would be operated on a truly competitive basis, is the Minister prepared, in order to correct any wrong impressions that may be held, to state that no such amalgamation is contemplated ? Mr. WHITE.- I have no knowledge that engineers and other classes of employees are leaving Trans-Australia Airlines because of the uncertainty of their employment. I should imagine that the reverse would be the case. The question of merging Trans-Australia Airlines with Australian National Airways Proprietary Limited or other airline companies arose during the regime of the Chifley Government when reports were published that the Leader of the Opposition who was then Prime Minister was contemplating that course. Subsequently, reports to that effect constantly appeared in the press. I have nothing further to say on the subject. Mr. DUTHIE.-I ask the Minister for Civil Aviation a question which is supplementary to that which was asked by the honorable member for Bass. Is the Minister aware that employees of the Trans-Australia Airlines organization are gravely concerned about the reports of a proposed merger between Trans-Australia Airlines and Australian National Airways Proprietary Limited? Is it a fact that it is Australian National Airways Proprietary Limited that has been making the approaches to the Government on this subject, through the backdoor as it were ? Is the honorable gentleman aware that many people conscientiously believe that competition between airlines is wholesome and that, without competition, there would be an unsatisfactory monopoly? If the reports of the proposed merger are not true, will the Minister deny them so as torelieve the anxiety of officers of the very fine organization of Trans- Australia' Airlines ? Mr. WHITE.- I have already answered a similar question. The honorable gentleman has suggested that many people have developed a state of anxiety neurosis about this matter, but I have not yet come in contact with any who are so afflicted. The honorable gentleman also said that he believes in competition amongst airlines. I point out to him that that is not the opinion of his political party, and that, in fact, the previous Labour Government introduced certain legislation in an attempt to eliminate all competition. As 'I stated in answer to a previous question, proposals for amalgamation were made by various companies to the former Prime Minister, who is now Leader of the Opposition, and they, recur from time to time. I have no further statement to make on the matter. Mr. WARD.- I understand that Qantas Empire Airways Limited has been conducting a weekly service between the mainland of Australia and Lord Howe Island and that Trans-Oceanic Airways Proprietary Limited has been conducting a fortnightly service on the same route. Will the Minister for Civil Aviation say whether there is any basis for the rumour that the number of trips made each month by Qantas Empire Airways Limited will be reduced to three and the number of trips which Trans-Oceanic Airways Proprietary Limited will make each month will be increased from two to three? If there is any basis for the current rumour, I should like the Minister to explain the reason for the proposed change. Mr. WHITE.-I do not know whether a rumour such as that mentioned by the honorable gentleman is circulating. However, I know that changes have been made on the air route mentioned. Qantas Empire Airways Limited is principally concerned with operating routes from Australia to the United Kingdom, to New Guinea and to certain Pacific Islands. Lord Howe Island is, of course, administered by -the Government of New South Wales. Trans-Oceanic Airways Proprietary Limited pioneered the air route to that island, and that firm is anxious to operate a more regular schedule of flights to the island. Qantas Empire Airways Limited is indifferent about whether it operates a service to Lord Howe Island in view of its large commitments. Some re-arrangement of the number of trips to the island each month may be made, but whether the service will operate once, twice or thrice weekly I am unable to say at present. COAL. Mr. GRIFFITHS.- Has the Minister for Labour and National Service seen the report in the press that the Chairman of the Joint Coal Board, Mr. Cochran, when speaking at Wallsend drew attention to the shortage of labour in the coal-mining industry and promised to provide continuous employment for miners for at least ten years? Does the Government concur in the statements that were attributed to Mr. Cochran in that report? Is the Minister aware that the coal-miners and their leaders, in view of their experience of unemployment in the past, have expressed their disbelief in the promises that Mr. Cochran made? Will the Minister have Mr. Cochran's proposals examined with a view to introducing legislation that will guarantee miners permanent employment for at least twenty years and thus encourage young men to enter this vital and important industry? Mr. HOLT-I have. not seen any full statement of the kind to which the honorable member has referred, but I have read a report in .the press that indicated that Mr. Cochran, had expressed himself along the lines that the honorable member has mentioned. I am aware that there is a shortage of labour in certain mining districts. On previous occasions in this House I have intimated that the Government was endeavouring to meet that problem by establishing hostels in appropriate areas and allocating migrants to the industry in order to meet its labour needs, I remind the House that the Prime Minister made an important statement in the joint policy speech of the present Government parties in which he indicated their attitude in relation to the production of coal. I cannot recall the precise words that the right honorable gentleman used, but, so far as I recollect, the substance of his statement was that in the event of there being some assurance of continuity of production the Government would guarantee to purchase all coal produced over a period so that there would be no possibility that coal-miners would work themselves out of a job by producing great quantities of coal. The Government would be glad to take up that matter at any convenient time with Mr. Cochran and representatives of the coal-mining industry. Mr. JAMES.-Has the Prime Minister seen the report in to-day's press of an announcement by the executive of the miners' federation to the effect that it will resist in every way, shape and form the introduction of mechanization into the coal mines? We all admit that mechanization will increase the output of coal, but I point out that a fear complex exists among the miners that the introduction of such machinery will reduce the number of employees in the coal-mining industry, that proper precautions will not be taken to ensure the safety of the miners, and last but not least, that they will suffer a serious reduction of earnings. Can the Government give a guaranntee that if mechanization is introduced into the coal mines, it will not cause a shortage of labour and a reduction of employees, and that it will not in any way jeopardize the safety of employees in that industry or reduce their earnings below the present level? Mr. MENZIES.-I have not seen the statement to which the honorable member has referred, but I cannot imagine that the development of coal production in Australia, by increased mechanization or otherwise, could impair employment or continuity of work. On the contrary, the Government believes that there is ample scope for a much greater production of coal in Australia and has indicated from time to time that it is quite prepared, by Various ways and means, to take steps necessary to see that employment is maintained under such circumstances and that safety precautions are also observed. CORTISONE AND ACTH Dr. DONALD CAMERON.- I ask the Minister for Health whether any research is being conducted in Australia into the use of the drugs ACTH and cortisone? If so from where are supplies of the drugs used being obtained? Have any efforts been made in this country to synthesize either of these substances? If not, is it possible to make such attempts? In view of the great public interest in these substances and of the various statements concerning their powers that have appeared in the press, will the Minister issue a statement in order to explain their nature, availability, potentialities and dangers? Sir EARLEPAGE. - The value of the ACTH medicaments has been proved in certain respects, but some very untoward results have also been produced, and therefore, they are not being made available at the present time in Australia. A certain quantity has been obtained from America, and experiments are being conducted with them in Melbourne, under definite restrictions and instructions, to ascertain at the earliest possible moment when they may be made available for general use. I understand that some drug houses are eager to secure certain patents under which they will be permitted to produce these drugs in this country. MR. ERIC J. HARRISON, M.P. Mr. NELSON.- Can the Prime Minister inform the House whether the reports are correct which indicate that the Minister for the Interior, who is the Australian Resident Minister in London at the present time, will be appointed to take charge of the arrangements for the forthcoming visit of Their Majesties, the King and Queen, to Australia in 1952? If those reports are correct, will the right honorable gentleman state whether the appointment of the Minister for that purpose means that he will not assume control of the Department of the Interior until the Royal Visit has concluded? Does the Prime Minister consider that it is in the best interests of that department, and particularly of the Northern Territory, which comprises one-sixth of the entire Australian continent, that an acting Minister, however capable he may be, should be responsible for administering that department whilst he is already administering another department which, in the past, has always been considered to require the sole attention of one Minister ? Mr. MENZIES.-The report to which the honorable member for the Northern Territory has referred is without foundation. The Australian Resident Minister in London will discuss in the next few weeks the preliminary arrangements for the Royal Tour. No appointment of a Minister to take charge of that tour, when it occurs in something like eighteen months' time, has yet been considered or made. HOUSING. Mr. SWARTZ.-Idirect the attention of the Minister for Works and Housing to a report of a statement made on behalf of the Government of Queensland to the effect that a Dutch manufacturing concern has recently contracted to supply a number of prefabricated houses for that State. In view of the urgency of housing requirements, and of the fact that prefabricated houses will assist to overcome the existing shortage of dwellings, will the Minister give an assurance that the Commonwealth will be prepared to subsidize the purchase of the prefabricated houses for Queensland? Will he also indicate that the Commonwealth will grant a remission of customs duty on such imported houses? Mr. CASEY.-Prefabricated houses from the Netherlands, provided they come within the terms of the Commonwealth and State Housing Agreement, will be eligible for a Commonwealth subsidy, as will any other prefabricated houses selected by a State Government, provided they come within the number of prefabricated houses in respect of which the Commonwealth has undertaken to provide a subsidy. The Minister for Trade and Customs has announced that the present remission of customs duty will be continued until the end of this calendar year. The matter of whether that remission should be extended into 1951 is now being considered, but a decision has not yet been made. POLIOMYELITIS. Mr. MORGAN.- Has the attention of the Minister for Health been drawn to the fact that two more deaths from poliomyelitis were reported yesterday by the New South Wales Department of Public Health. This brings this year's death-roll from that disease to 38 in New South Wales, although there were only four fatal cases in the corresponding period of last year. This year's total number of victims in New South Wales is 596, compared with 127 last year. Is the expert committee which has been set up by the Commonwealth able to throw light on this problem? If not, will the Minister urge the committee immediately to investigate the methods of treatment referred to by me in my previous question to him on the subject? Alternatively, will he take steps to have a parliamentary select committee appointed for the purpose of taking evidence from all available sources, unimpeded by preconceived notions or prejudices or any barriers of professional etiquette? Will the Minister give this matter his urgent and personal attention before further victims are stricken by this grim malady and will he make a full statement on the whole matter before the House adjourns thisyear? Sir EARLEPAGE. - I cannot imagine any grosser waste of public money than would be involved in the appointment of a parliamentary select committee to examine the causation of poliomyelitis when hundreds of the most expert technicians and doctors in the world are spending the whole of their time and many millions of pounds in trying to ascertain the cause of the disease. Mr. Morgan.- How far have they got? Sir EARLEPAGE.- The have got much further than any parliamentary committee in this country could get. It has been found that wet conditions are usually accompanied by an increased number of cases in Australia. That has also been so in America during this year. The actual cause of the disease has not yet been discovered, and it is not yet known how the disease is transmitted from one person to another. The special committee to which I referred some time ago will report to-morrow to the National Health and Medical Research Council and the Director-General of Health will b". present on that occasion. I shall ascertain, when he returns, the nature of the report and whether a statement can usefully be made on the subject. RICE. Mr. CLARK.- In view of the decision of rice interests to withhold rice from sale, will the Minister for Commerce and Agriculture arrange for an immediate investigation to be made by his department to ascertain the stocks of rice that are held in Australia, the legality of withholding this commodity from sale to certain citizens and the quantity of exportable surplus offering overseas? Will the Minister consider placing a restriction on the export of rice from Australia until the demands of the home market have been met in view of the scarcity and high costs of certain vegetables? Mr. McEWEN.- I have asked for some information on this subject and expect to receive it in the near future. The export of processed and unprocessed rice calls for export permits. I shall keep myself informed on this subject and advise the honorable member for Darling and also the House, if necessary, of the position. I understand that the Australian Government has no legal right to order the withholding of rice from sale. The control which was exercised by the Australian Government over the distribution of rice was exercised under war-time authority and since the termination of that authority several years ago control has been exercised by agreement between the Rice Equalization Association Ltd. and the Australian Government. I am familiarizing myself with the position and will make a statement concerning it to the House if necessary. SNOWY MOUNTAINS SCHEME. Mr. FRASER.-I ask the Minister for National Development a question concerning the progress of the Snowy Mountains hydro-electric scheme, which will involve the submerging of the village of Jindabyne. Can the Minister tell me, in the light of the present progress of the project, how much time will elapse before Jindabyne is flooded? Is the Snowy Mountains Hydro-electric Authority alive to the necessity for locating the site of the new Jindabyne and for drawing the plans of the new town as soon as possible ? How soon will the plans of the new Jindabyne be ready? Mr. CASEY.- I believe that it will be at least five years before Jindabyne is likely to be submerged. Mr. Hughes.- Hear, hear! Mr. CASEY.- For the comfort of my right honorable friend, the delay may be as long as eight years. The Snowy Mountains Hydro-electric Authority has the matter under consideration now. The views and wishes of the people of the township of Jindabyne will be taken into account, of course. I believe also that the Snowy River Shire Council is interested, and it will be consulted as well. I cannot tell the honorable gentleman exactly when precise plans, or even general plans, will be available but I hazard a guess that they will be ready about a year hence, which will be a number of years before the flooding of Jindabyne takes place. MR, EGBERT CUMBERBATCH. Mr. CREMEAN.-Will the Minister for Immigration state the present position in relation to the proceedings that are reported to be pending against Egbert Cumberbatch, a West Indian native who was recently arrested in Sydney? Has the honorable gentleman received a petition from certain trade union officials that Cumberbatch be permitted to remain in Australia? If so, from what officials did he receive the petition and what was his reply to it? Mr. HOLT-Cumberbatch is a West Indian national who was taken off the ship on which he was working in 1949 for treatment in Australia. He could not be located later when normally he would have been repatriated, and recently he was charged with being a prohibited immigrant. The proceedings arising from that charge are still before the court. The hearing was adjourned until the 20th November. Some representations on behalf of Cumberbatch were received by the honorable member for West Sydney and the honorable member for East Sydney, and I have also received representations from the Sheet Metal Workers Union. I have not had an opportunity to consider the matter recently but, as it is now before the court, I shall ascertain whether any further examination of the facts is warranted. I point out that the man in question is not eligible to remain in Australia under our immigration policy. PHARMACEUTICAL BENEFITS. Mr. DALY.- Is the Minister for Health aware that thousands of Australians are receiving from their doctors prescriptions for medicines that are not covered by the free medicine scheme? Does he consider that doctors are unnecessarily prescribing such medicines and, if so, what action does he intend to take to prevent that practice from being continued? If he does not consider that the medicines are being prescribed unnecessarily, what does he propose to do in order to add those essential medicines to the free medicine list? Sir EARLEPAGE.- The Government's policy, which is to supply lifesaving and disease-preventing drugs to the community at large, has been very clearly stated. This Government has not the slightest intention of emulating either the New Zealand Government or the United Kingdom Government by permitting doctors to prescribe all sorts of medicines, many of which are of very little value. The free medicine schemes of New Zealand and the United Kingdom have been grossly abused and prescriptions of the kind that I have mentioned have imposed a tremendous drain upon the public purse. The money that the Government has at its disposal for the supply of free medicines, which is derived initially from the taxpayers, will be used in the wisest and best way. Mr. CHAMBERS.-I preface a question to the Minister for Health by stateing that a complaint has been made to mc by a sufferer from arthritis, who has said that when he presented a prescription from his doctor to his chemist he was under the impression that he would receive the medicine free and that he was astonished when he was informed that he would have to pay for the medicine. He asked the chemist for an explanation, and was told that if the drugs included in the prescription were to be used by way of injection they would! be- supplied free. but since the prescription provided for them-, to: be administered by way of mouth they would have to be paid for. If the statement made' by the pharmacist is- correct, does the Minister agree that an anomaly has been revealed which should be rectified immediately?' Sir EARLE!PAGE.- If the honorable gentleman will place details of the case referred to before me I shall have them examined'. PARLIAMENT HOUSE. Mr. HULME.- Has the Prime Minister heard that Labour senators have requested that the President of the Senate provide beds in. their rooms in Parliament House and: that the President is prepared to accede to the request so as to enable the senators to. avoid paying for board and accommodation in Canberra, notwithstanding, the fact that they receive an allowance for that purpose? In. the event of Labour senators taking up residence in Parliament House, will the right honorable gentleman suggest to Cabinet the withdrawal' of their daily allowance?' Mr.. MENZIES-I heard, a rumour to that effect, but I am bound to say that r merely treated' it as to-day's funny story. I cannot, imagine, any such ridiculous proposal being seriously pursued. SOUTH' AND SOUTH-EAST ASIA. Mr.. WARD.-Will the Minister for External- Affairs, make a. statement about the present position in connexion with the Spender plan under which aid will be given to' certain Asiatic countries to improve their- living- standards ? Will he also make an early statement about Australia's precise commitments under that plan in respect of either finance or the provision of goods and services ? Mis. SPENDER.: - As the honorable member knows, a meeting of British Commonwealth- Ministers was held- in London during the end of' September and the beginning, of October, and at, that meeting' a report was completed- on the provision of economic aid and technical1 assistance to South and South-East Asia. That report will' be- made available shortly. It will- Be published as soon as possible,, and certainly, before the end of. the; present sessional period. I propose then to lay it on the table of the House and to make a statement- on the position generally. WHEAT. Mr. CLARE.- Can the Minister for Commerce and Agriculture say whether it is the policy of the Government to permit the> Australian Wheat- Board- to sell wheat directly to> various countries and retain the- commission earned on the sale of the wheat, or whether its policy is: that contracts for the sale of wheat shall be handled by private enterprise and the resulting profits retained by the private interests concerned' instead of by the board? Mr. McEWEN.-The policy of. the Government is to leave the sale of wheat to the' Australian Wheat Board, a majority of the members of which are elected' by the wheat-growers. I' understand: that the board itself sells most of the wheat which it handles, and, that it arranges all direct sales of wheat. If, in the judgment, of the board, some special reason exists for it to approve of the employment of some special agency in a, sale,, the decision, to do so would, be made by the board and would not relate to Government policy. I have not been consulted by the board on such, an, issue as- that raised by the honorable member and I have not volunteered, any information on it.. MR.. J. J. DEDMAN. Mr. BEALE((Parramatta, - Minister for Supply)-. - by leave - I desire to make a short statement concerning- a matter that was raised by the Leader- of the Opposition, (Mr. Chifley) on the motion: Aor- the adjournment of the House on Thursday last, the 16th November. Some time ago- an honorable member mentioned to me the matter.- of the- alleged- use by the former member for, Corio, Mr. Dedman, of a Commonwealth motor car in the Corio electorate, and recently the present honorable member for Corio (Mr. Opperman-) told me that constituents had complained to him about it, and' he asked rae to find out the f acts. I made inquiries, and last Wednesday I informed the House that Mr. Dedman had from time to time been driven in a Commonwealth motor car in the Corio electorate with an' assessing officer of the Repatriation Department, the effect of the practice being that Mr. Dedman had been obtaining government transport for his own personal or political purposes. On Thursday last, while I was absent on urgent public business in Melbourne, the Leader of the Opposition referred to the matter in a speech on the motion for the adjournment of the House, and stated that he had been informed by Mr. Dedman and by Mr. Broadby, the secretary of the Australian Council of Trades Unions, that Mr. Dedman had only travelled in a Commonwealth motor car as an associate regional officer acting on behalf of Mr. Broadby in connexion with the Commonwealth reconstruction training scheme. He added that Mr. Dedman had also stated that he had never discussed politics on those visits. I was prepared to allow the incident to close on the reply that I had furnished to the question without notice that was directed to me last Wednesday, the 15th November. However, as the Leader of the Opposition has seen fit to describe my answer as a " slanderous misrepresentation " of Mr. Dedman, I 'feel free to draw the attention of the House to the following additional matters : - (1) Mr. Dedman is the endorsed Labour candidate for Corio, and it is to Corio, and apparently only to Corio, that he has been travelling frequently for months past in a government motor car. Irrespective of the validity of the explanation which he now offers, one would have thought that by every rule of good taste and common sense he would have refrained from travelling in a government motor car to the electorate where he was trying to win votes, lest his purpose be misunderstood, and lest he cause embarrassment to the civil servants who were thereby involved. Mr. Byrson interjecting, Mr. DEPUTY SPEAKER.- Order ! The honorable member for Wills (Mr. Bryson) will remain silent. Mr. BEALE.- (2) As to the explanation itself- Mr. Bryson interjecting, Mr. DEPUTYSPEAKER-Order! The honorable member for Wills will apologize to the Chair for disobeying my direction to him to remain silent. Mr. BRYSoN- I apologize. Mr. BEALE.- (2) As to the explanation itself that Mr. Dedman went down to Corio as an associate regional officer acting for Mr. Broadby, that is, as a member of the regional committee, the Minister for Repatriation (Senator Cooper) points out that visiting work is invariably done by a member of the industrial committee, all the members of which must be appointed by the Minister. Neither Mr. Dedman nor Mr. Broadby has ever been appointed to the regional committee, which is a State-wide committee concerned with the direction and organization of policy, and one is entitled to ask why this committee, which is not concerned with individual areas, is suddenly interesting itself, in the person of Mr. Dedman, in the Corio area. In this connexion it is significant that a letter from the Director of the Reestablishment Division to Mr. Dedman, dated the 4th January, 1950, reveals that Mr. Dedman, shortly after his defeat for the Corio division, was inquiring about Commonwealth reconstruction training scheme training and, to quote the letter, "particularly in and around Geelong", which is in the Corio area. (3) Furthermore, this story is also quite at variance with the official departmental explanation, which is as follows : - Shortly after the last election arrangements were allegedly made by the then Director of Re-establishment Division with his then Deputy Director in Victoria for Mr. Dedman, as ex-Minister, to see, as he desired, the results of the training scheme which he administered and which he had not had time to see. The House will observe that in this report there is nothing whatever about Mr. Broadby appointing Mr. Dedman as his delegate: The opinion of the chairman of the Repatriation Commission may be gathered from the final tersely expressed sentence of his report, which is - Instructions were immediately issued that this was not to he repeated. (4) Finally, Mr. Dedman says that he did not go down to the Corio electorate for political purposes or mention politics when he was there. On the other hand, it has been stated to me that Mr. Dedman has gone around among the trainees telling them who he is and that he was the Minister in charge when they got the benefits they were now enjoying. I do not know which is the right version, but I invite the House to draw its own conclusions in the light of all the matters that I have mentioned above. BROADCASTING. Mr.ANTHONY (Richmond- Postmaster-General). - by leave - On the 9th November the honorable member for Parkes (Mr. Haylen) asked me a question relative to the overtime rates that are applied to the Australian Broadcasting Commission staff. A statement in relation to the matter was prepared for me by the chairman of the Australian Broadcasting Commission, Mr. Boyer, which reads - The effect of the penalty rates previously fixed by the commission applying to the rostered staff was to create serious anomalies between those enjoying the penalty rates and other staff. The commission, therefore, made an alteration in the penalty rates which brought them into line with a determination of the Public Service Arbitrator covering announcing staff, in a government determination and other awards of the Arbitrator and Arbitration Court, covering week-end penalty rates for shift workers. The alteration involves a reduction, but not elimination of week-end penalty rates. The commission has suggested to the Staff Association that if it desires an amendment of the new conditions, they should approach the Public Service Arbitrator for a variation, as he ib the appropriate authority to determine any dispute between the commission and its staff. The Staff Association were under the impression that the Public Service Arbitrator was not empowered to deal with the matter under dispute, but they have now been assured hy him that he can do so. The association, however, has indicated that it prefers at this stage to continue discussions with the commission. We have no official knowledge of any injunction to restrain the operation of the rates in question. MR. J. S. TEASDALE. Mr. POLLARD.-I desire to make a personal explanation. Some weeks ago I moved a formal motion for the adjournment of the House to discuss the action of the Minister for Commerce and Agriculture (Mr. McEwen) in removing Mr. Cullen and Mr. Johnston from the Australian Wheat Board. During the course of my speech on that occasion I stated that Mr. Teasdale, the present chairman of the board, was or had been a director of Westralian Farmers Limited. Mr. Teasdale has not asked me to correct that statement, but from another source that I accept as absolutely correct I have been informed that Mr. Teasdale is not, and never has been, a director of Westralian Farmers Limited, but is a shareholder of that company. I regret that I made a mistake when I made my statement. I thought at the time that my statement was correct. I now correct my mistake. NEW AND OPPOSED BUSINESS AFTER 11 P.M. Motion (by Mr. Menzies) proposed - That Standing Order 104 - 11 o'clock rule - be suspended until the end of the year. Mr. CHIFLEY(Macquarie - Leader of the Opposition) [3.30].- Will the Prime Minister (Mr. Menzies) give an indication to the House, perhaps to-morrow, of the sitting days for the remainder of this session, and also express his mind generally on the measures that the Government may consider it absolutely necessary to bring before the House before the session ends? I ask my question to enable honorable members to base their individual arrangements on the information that the Prime Minister may supply. Mr. MENZIES(Booyong - Prime Minister) [3.31].- I shall be glad to accede to the right honorable gentleman's request when the House meets to-morrow. Question resolved in the affirmative. NATIONAL SERVICE BILL 1950. Motion (by Mr. Holt) agreed to - That leave be given to bring in a bill for an act to provide for national service in the defence force, and for other purposes. COMMONWEALTH AID ROADS BILL1950. Message recommending appropriation reported. In committee(Consideration of Governor-General's message) : Motion (by Mr. Fadden.) agreed to - That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated RevenueFund sums for the purpose of financial assistance to the States to be applied in the construction, reconstruction, maintenance and repair of roadsand works connected with transport, and for other purposes. Resolution reported. Standing Orders suspended.; resolution adopted. Ordered -. That Mr. Fadden and Mr. Whitedo prepare andbringin billtocarryout theforegoing resolution. Bill presented by Mr.Fadden, and read a first time. Second Reading. Mr. FADDEN(McPherson- Treasurer) [3.35].- I move- That the bill he nowread a secondtime. In this bill the Government proposes to introducea new system of Commonwealth payments for roads purposes to replace the provisions of the Commonwealth Aid Roads and Works Act 1947 which expired onthe 30th June this year. Briefly, the main proposals are - (a) To make availaible each year for roads a larger amount of money than under the former legislation and to ensurethat the aggregate grant will increase as petrol consumption increases. (b) To provide fromthis money a specific grant to the States for roads in rural areas as well asa grant for general roads purposes. (c) To givetheStates express permission to useany part of either of these grantsto assist local authorities in the construction and upkeepof roads. (d) To provide for continuity in roads programmesby making the legislation operative for five years. (e) To setaside annual sumsfor Commonwealth expenditure on strategic roads and roads of access to Commonwealth property and for the promotion of road safety. These proposals have been framedby theGovernmentafter very carefulstudy of the present-day (problem of roads finance in Australia. Many representations have been received on various aspects of the subject from State governments, local authorities, transport, motoring and producers' organizations and other : bodies. The viewshave been obtained of people highlyexperienced in the engineering and administrative problems of roads, and the proposals in their present form were discussed with the State Premiers at the Conference of Commonwealth and State Ministers last September. I need not stress herethe importance to a countrylike Australia of a sound and efficient roads system. Transport always has been and probably always will be one of thebasic economic problems of this country, and roads are oneofthe main factors in the problem of transport. From adevelopmental standpoint, roads arethe means of tapping large areasof valuable resources. From the productivity standpoint,roads involve the difference between slow, arduous andcostly transport and the fast and cheap movement of goods from place to place. From the defence standpoint roads, together with railways and airways, providethe strategic lifelines for the land defence of the continent. Withthe development of motor transport, the relative importance of roadshas grown enormously and it willprobablycontinue to grow. Duringthe twenty yearsbefore the recent war, a great deal of valuable work was done , to create a network of roads throughout Australia. This work would undoubtedlyhave gonea great deal further by nowhad it not been for the war. That road system proved of incalculable value during the period of national danger. During thewar years main-power, equipment and materials were drawn away into the war effort, new construction of roads for civil purposes came practically to .a. standstill, and standards of maintenance on existing roads tended to decline. A number of important new roads were, of course, built for military purposes during the war and though the economic value of some of these roads is limited, they remain important links in our national roads organization. After the war labour, materials and plant remained scarce and the position in this regard improved only gradually. Meanwhile, the volume of road traffic was increasing and the heavier and faster types of vehicles which had .appeared were causing greater wear .and tear on road ' surfaces. Costs of road construction and maintenance rose very considerably. Primarily, .roads are the responsibility of the State governments and local .authorities, and the Australian Government has no desire to encroach upon that responsibility. Over many years, however, successive Australian Governments have recognized the developmental and defensive importance of roads and have made grants to the States for expenditure on road construction and maintenance. The first such grant was made in 1923 while in 1926 the Bruce-Page Government negotiated with the States .a ten-year agreement under which the Commonwealth was to pay to the States £2,00.0,000 yearly for roads purposes. That agreement is generally regarded as a landmark in the progress .of the Australian roads system. During the war Commonwealth roads payments to the States continued, though on a 'diminished scale, because .civil consumption of petrol, to which roads grants were related, also diminished. But expenditure on roads was restricted in those years, and the .State governments were all .aMe to build up substantial balances in their roads funds. The effect of the Commonwealth Aid Roads .and Works Act 1947, and of .amendments to that act i-n the two following years, was to increase the amount of Commonwealth roads payments to the States, and the rise in petrol consumption also tended to increase those payments. During the last three financial years total Commonwealth payments for roads have averaged £7,7\00,000 a .year compared with £3,800,000 a year in the three years 1936 to 1939. Whilst -experience has varied from State to .State, it .seems that, by .and lar,ge, shortage <of labour and materials has done more than any lack .of money ite hold u,p progress in roads work. Some of .the State governments .still have substantial balances in their roads funds. It is abvious that a vast amount -of work will .need to be done on the roads in the next few years. A great deal of leeway has to be made up in repairing and rebuilding roads and bridges. Heavier types of vehicles are making necessary heavier forms of .construction, not only on main roads and highways but also on secondary roads. An immense programme of new road building is waiting to be carried out both in rural areas and in and around municipalities where the .establishment of industries and .the development of housing areas require the .construction of roads and streets. Road construction and maintenance being a function of the States, Commonwealth financial assistance for roads should be regarded as supplementary to State resources, and not as a means of relieving the States of any obligation to provide their share of additional finance for the large volume of road work that is now necessary. Since it is clear, however, that a good deal more money will be required for roads in the next few years, the Australian Government is prepared again to increase very substantially its contribution to this vital national work. It is now proposed, therefore, to set aside for roads payments each .year for the next five years an amount equal to 6d. a gallon of .customs duty on imported petrol entered for civil consumption, and 3Jd. ,a gallon excise on locally produced petrol. As before, aviation spirit will not be included in the calculation of these amounts. In the present financial year it is estimated that the amount of money so set aside will bc approximately £12,000,000. By way of comparison, I recall that Commonwealth payments for roads in 1949-50 amounted to 'approximately £9,400,000. Moreover, since the full amount of the proposed payments is to be related to proceeds of duties on petrol, it will increase year by year to the 'extent that petrol consumption increases. On present trends in petrol consumption, the proposed payments will increase by about £1,000,000 a year, though it is of course not possible to predict whether the present trends will be maintained. I should point out that under the former legislation only part of the total payments increased with petrol consumption, so that the proposals in this bill afford the possibility of a greater annual rate of increase in road payments. On the question of allocating Commonwealth roads grants as between different classes of roads or different areas, the Government has heard many different views. Formerly Commonwealth road grants to States were made for roads purposes generally. Then in the Commonwealth Aid Roads and "Works Act 1947 a specific grant was made for roads in sparsely settled areas and timber country. This was in addition to a general roads grant. In the light of all the information and advice available it appears to the Government that there is a strong case for making two separate grants. Whilst the States should be in a position to maintain and extend their road systems as a whole, including main roads, trunk roads and highways there are good grounds for the view that we have reached a stage when special attention should be given to what might be called secondary roads which exist principally in rural areas. These run off the main roads and traverse the actual farming and pastoral areas and extend into the undeveloped regions. Sometimes they carry heavy traffic and sometimes relatively little traffic; but in all instances they are highly important to the people in the areas that they serve. They are also very important to the economy as a whole, because they are the means of bringing the wealth of primary products to the main roads and to the railways. The Government, therefore, proposes to make a special grant for roads in rural areas as well as a general roads grant. This principle was introduced in the former legislation and it proved to be very valuable. In that legislation, however, the purposes of the grant were so defined that they could be taken to limit its scope unduly and doubts arose from time to time about which roads were eligible for expenditure under the grant. In the new proposals the scope of the grant has been widened to comprehend all roads in rural areas, other than main roads, trunk roads and highways. For example, it will now cover what are called feeder roads and developmental roads as well as roads in sparsely settled areas and roads serving ex-soldier settlements. It will also include roads in country municipalities and shires. This point was at issue under the former legislation because it was considered that funds made available for sparsely settled or rural areas could not be expended in and around country towns. However, that contention has little substance. Tha roads in and around country towns servo the surrounding districts as well as the. towns themselves. Many of them bear quite heavy traffic and entail considerable costs of upkeep. It seems entirely proper, therefore, to bring them within a grant for roads in rural areas. For this special grant for rural roads the Government proposes to allocate 35 per cent, of the total amount to be set aside for roads purposes annually. That is to say the amount will be equal to 35 per cent, of the proceeds of 6d. a gallon customs duty and 3-Jd. a gallon excise on petrol. In the current year, the amount is estimated at £4,200,000 which would be £1,200,000 greater than the grant that was made in 1949-50 under the former legislation for roads in sparsely settled areas. The increase would thus be of the order of 40 per cent. Moreover, unlike the former grant which was limited to a specific amount, the proposed grant would increase with petrol consumption. Apart from this special grant, it is proposed to make, as before, a general grant to the States for the construction, reconstruction and maintenance of roads generally. Unlike the grant for general roads purposes made under the previous legislation this grant may also be used for the purchase of road-making equipment. This money, therefore, Will be available to State Governments to expend as they think fit on roads purposes whilst up to one-sixth of the amount may be expended on works connected with road, or water, transport. The States will be able to use these funds as they think necessary in either urban or rural areas. They may finance works carried out by their own roads organizations or, as I shall explain in more detail, they may assist local authorities financially to carry out roads works and purchase roadmaking equipment. The amount of this general grant will be equal to 65 per cent, of the total amount to be set aside by the Commonwealth each year, less £600,000 a year which is to be allocated for strategic roads and for road safety. The estimated amount in this financial year is £7,200,000 which may be compared with the payment of ' £5,800,000 in 1949-50. As under the former legislation, this general gran*t will increase with petrol consumption. I wish to make clear the attitude of the Australian Government with respect to assistance to local authorities for roads purposes. Many urgent representations have been made to the Government on this subject, about which, however, there ought to be no misunderstanding. Local authority affairs, including local authority finances belong to the province of the State governments and the Commonwealth cannot and should not undertake responsibility in that field. The Government, of course, recognizes the very important functions of local authorities and believes that it is necessary that the local authorities should be in a position to carry out those functions adequately. That, however, is primarily the concern of the State governments and the Australian Government will not try to intervene in the matter. In this legislation, therefore, it is made perfectly plain that the State governments may use any of the money to be received under the general roads grant to assist local authorities in either urban or rural areas and any part of the grant for roads in rural areas to assist local authorities in those areas. Beyond that, however, it does not go ; and in respect of how the money received under either of these grants is allocated by the State governments, it is for local authorities to deal with the State governments themselves and not with the Australian Government. Apart from the grants to the State governments for roads, the Government proposes, as the former legislation provided, to set aside an amount of £500,000 a year for the construction and maintenance of strategic roads and roads of access to Commonwealth property. These strategic roads were built during the war as part of Australia's defence organization, and it is important from a defence standpoint to keep them up to a proper standard of maintenance. In some instances they run through Commonwealth territories and are, therefore, wholly the responsibility of the Commonwealth. In other instances, however, they are located in the States and whilst they may not have an economic value sufficient to justify the States maintaining them at the requisite standard, expenditure by the Commonwealth upon them will undoubtedly be of economic benefit to the States and to the community as a whole. The proposal to make £100,000 a year available for promotion of road safety continues the provision that has been made in recent years. I believe that honorable members would agree that money that is effectively expended on road safety could hardly be devoted to a more laudable purpose. To sum up, the payments which it is estimated will be made in the current financial year under this legislation compare with the road payments made last year as follows : - With respect to the term for which the legislation should operate, some balancing of considerations is necessary. Since authorities responsible for roads should be in a position to plan ahead and work to definite programmes, it is important that financial provision for roads programmes should be assured for a reasonably long term. On the other hand, the probability that circumstances that affect transportation and roads will continue to change makes it inadvisable to project legislation too far into the future. The Government has reached the conclusion that a term of five years will probably Be found appropriate. At the end of that period' ft- can Be expected that the subject will be re-consid'ered.. The proposed distribution of the grants to the States will Be made in accordance with the- formula that has applied under previous legislation. That is to say, 5 per cent, of each of the two grants will" Be paid to Tasmania and 9'5 per cent, to the five mainland States on the basis of three-fifths according to population of the States as at the 1947 census and twofifths according to the areas of the States. This' formula has on the whole proved satisfactory in the past and there are no apparent reasons why it should not be found1 at least as satisfactory during the term of this legislation. I mentioned1 earlier that the bill provides that one-sixth of the grant for general roads' purposes may be used' by the Spates- at their discretion for works connected with road' and water transport. It. was recognized in earlier years that some people who used petrol and paid tax on it did not use the- road's in their ordinary business and., therefore; they received no direct benefit from the roads grants. Typical of such people- would be the owners- of fishing boats and motor launches. For that reason the States were permitted to use a portion of the grants for transport works other than roads and under that provision the States were able to make money available- to construct boat havens and jetties for the benefit of owners and users of small water-craft. The relevant provision- in this bill is intended to serve a similar purpose. In this respect, as in other respects also-, the States are permitted to use the Commonwealth grants in certain ways, but are not required to do. so. Taken, with the funds available- to the States from sources of their own,, the moneys to. be- provided under this bill should ensure, that adequate- finance wil be- available for roads- during the next few years: Apart from Commonwealth grants, total receipts of S'tate roads funds, other than-, loam: moneys in the l'ast financial year,, amounted to- £11,600,000-. This year, the amount will be considerably greater,, because motor- registrations are increasing and because three of the States have lately increased motor taxation. Therefore, Common-wealth and State payments combined, seem- likely to provide Between £23,000,000: and £24,000,000 for road's in this financial year, and the amount can be expected to increase in subsequent years with increasing motor registrations and consumption- of petrol*. I have not included- in those figures; the substantial sums which local authorities raise from rates, and which are partly available foi- expenditure on- roads and available for expenditure on roads and' streets, or the balances in State roads funds. At the 30th June this year, these balances amounted to nearly £5-,500',000 and in some of the States at least, the balances were larger than necessary for working purposes. I should say. that, on a reasonable estimate, there should be something like £30',000j000 a year available for expenditure: on roads throughout Australia during the next five years, and even allowing for higher- costs of labour and- materials', that sum should be ample foi" the purpose. We have to keep in mind that, important though we all recognize road development to be,, there are m-any other great fields of constructional work which have high priority claims to manpower; materials- and finance, and road programmes must Be framed with due regard to the- requirements of those other projects-. I confidently commend this- bill to honorable members as one- designed to promote great constructive progress throughout the whole of Australia, and to bring, great benefits to all. sections of the community. Debate (on motion by Mr. Ward) adjourned. SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILE 1950. Second Reading.. Debate resumed from the- 12th October (vide page 795) on motion by Mr. FADDEN - That the- bill be now read a second, time Mr. CALWELL(Melbourne) [3.57].- This is another measure in the- catalogue of bill* which this Government, has introduced, or proposes to introduce, allegedly .to .put value back into the £1, but like adi other such bills, it will have precisely the .opposite effect. The Government doubtless would like to create the impression that it is not only trying to put value back into the £1, but is .also giving effect to the clear and unequivocal promises made by the twin leaders of the present tory coalition in their policy speeches during the last general election campaign. Let us refresh our memories about those matters, so that the House and the nation can appreciate the wanton and contemptuous manner in which tie Government has repudiated the promises which it so glibly made a few months ago. I shall begin with- the policy speech of the senior partner in the leadership of this Government. The present Prime Minister (Mr. Menzies) said in his policy speech at Camberwell, Victoria, -on the 10th November, 1949 - We will institute h prompt overhaul of the Taxation law* by a competent committee, to simplify the Statutes and remove anomalies. Wo will review the incidence of indirect taxes (which and a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs. The present Treasurer (Mr. Fadden), who is the junior partner in the coalition, delivered a policy speech on behalf of the Australian Country party on the 17th " November, 1949, at Boonah, in Queensland, and he made the following definite statement on our tax laws: - We promise that n competent review will also be made of the incidence of indirect fixation because we recognize the necessity for sensible reductions in the many cases whom such reductions will arrest the upward trend of living costs. No words could be clearer than those two statements made by the leaders of the present Government in their successful attempt to mislead the people of Australia into believing that, by voting for the Liberal party and the Australian Country party, they would elect a government pledged to a policy of .reducing taxes. The scaling down of indirect taxation was only complementary to their other project of reducing direct taxation. But the Government has not yet made an effort, strangely enough - although in some respects it is not so strange - to give effect to those promises which were made so glibly during the last general election campaign. Until the budget session, which was not commenced 'Until nine months after that election, we heard no mention from the Government of its plans for putting value back into the £1, and reducing the cost of living, but the Treasurer began his second-reading speech on the Sales Tax {Exemptions and Classifications) Bill 1950 with the following words: - In accordance with the assurances given by the Government, a comprehensive review of the .sales tax law has been carried out, and due consideration has been given to the many requests that have been made from time to time for exemption from sales tax of numerous classes of goods, I pause at that point to remind the House that the right honorable gentleman referred to the assurances that had been given by the Government, and that I have quoted them most faithfully from the policy speeches of the present Prime Minister and the Treasurer. I return now to the Treasurer's second-reading speech on this bill. He proceeded as follows : - It will he appreciated that it would be quite impossible to accede to all those requests, but relief is being given as far as is possible in the present circumstances. Up to that point, there was no suggestion that the degree of relief by way of reductions of sales tax would be much more than offset by the increases which the Treasurer subsequently announced in the same speech. He said - The new exemptions of building material include builders' hardware such as nails, bolts, screws, door handles, -locks and similar fittings of a kind installed by builders as fixtures in, 'houses. Shortly afterwards, the right honorable gentleman made the following statement : - Exemption is also being allowed in respect of structural steel in the form of girders, which, although used mostly in industrial and business premises, are to some extent used in buildings which provide residential accommodation such .as hostels. In other words, the few remaining items of building equipment, which were still subject to sales tax, were -to be exempted from that impost. I believe -that the figure would represent not more than about 5 per cent, of the total cost of erecting a house. An interesting point is that .steel girders are to be exempt from sales tax because they are, to some degree - to use the Treasurer's own. words - used in buildings which provide residential accommodation such as hostels. The benefit from the abolition of sales tax on that item will mostly be derived by persons who construct factories, large residential premises and big private houses, for which steel girders are required. Such structures are not built with the same materials as are used in the erection of small houses. That concession is a pay-off to the Government's supporters in the big business world, particularly in the building world, for the services which were so generously rendered to the Liberal party and the Australian Country party to ensure their success at the la3t general election. The Treasurer has stated that the value of the remissions of sales tax will be approximately £1,000,000 for a complete year, and about £640,000 for the current financial year. So far, so good ! Nobody would object in general terms to those remissions of sales tax if the Treasurer had stopped at that point. But, having given a miserable amount with one hand, he proceeded to scoop in large amounts with the other hand by increasing the sales tax on other items. They are set out in the schedule to this bill, and I shall deal with them presently. The collections from those increased rates of sales tax will yield additional revenue amounting to £10,000,000 for a complete year, and approximately £7,500,000 for the remainder of the current financial year. This is not only a tax reducing and a tax producing measure; this is not only a measure which gives away £1,000,000 in a full year and collects £10,000,000 in the same year. According .to the Treasurer this is a measure to meet the demon of inflation. These are his words - Australia is at present handicapped by shortages of certain essential goods, whilst oilier classes of less essential goods are available to the public in large quantities, and sell readily even at high prices. The taxing of these latter goods at higher rates is regarded as clearly justifiable from more than one angle. No doubt other honorable members of the Opposition will deal more fully than I am able to do in my limited time with the items regarded as more justifiably taxable - mouth organs, lipstick, and Jew's harps. The Treasurer went on to say - In the first place, a heavier impost can reasonably be expected to check the demand for such goods, to cause a diversion of labour to employment of greater value to the nation, and to release more materials for goods which are essential to the nation's welfare aud protection. The goods the demand for which is to be checked are jew's harps, bagpipes, mouth organs, lipstick and similar luxury items,. The proposal is anti-inflationary, according to the Treasurer, because it has been framed to cause a diversion of labour to employment of greater value to the nation. And that is nothing short of man-power conscription. That is no different from an indirect man-power control. If honorable members opposite waxed eloquent during the recent general election campaign at all, surely it was on the question of manpower direction. I quote again from the speech of the Leader of the Liberal party. The right honorable gentleman said - The socialists of Great Britain, nearer to the socialist precipice than we are in Australia, are already introducing industrial conscription. How could they do otherwise? It is essential to the whole socialist conception. Those were the words of the Prime Minister who leads a government which proposes to use a sales tax for the purpose of introducing industrial conscription. Mr. DEPUTY SPEAKER.- The honorable member is putting up an aunt sally and knocking it down in order to get outside the terms of this bill which has nothing to do with industrial conscription. Mr. CALWELL.- I am entitled to question the Treasurer's statement that the bill has been introduced to cause a diversion of labour to employment of greater value to the nation, Mr. Deputy Speaker. I am entitled to point out that what the Treasurer said when speaking on the second reading of this bill was different from what he and what the Leader of the Liberal party said a few months ago. I am entitled to say that no Minister has the right to use the sales tax to prevent anybody from choosing his own job- No Treasurer has the right to introduce legislation of this nature and to tell people who are making lipstick to-day that they must make bricks to-morrow. He has no right to say to people, "I will take you out of the occupation of your choosing where you are employed by an employer who wants to invest his money in his own way. That employer will have to close his business, if necessary, and you will have to take work in a brick kiln, making bricks, or in the country districts, cutting timber, or draw on the unemployment and sickness benefit fund ". Mr. Hasluck.- That is a fantastic exaggeration. Mr. CALWELL.- The honorable member for Curtin (Mr. Hasluck) can make his apologies to his electors on this issue and on other issues on which he will need to make them. Mr. DEPUTY SPEAKER.- The bill before the House deals with the application of sales tax. That is the subject with which the honorable member for Melbourne (Mr. Calwell) should deal. Mr. CALWELL.-I am dealing with that subject, Mr. Deputy Speaker. The Treasurer dealt with man-power conscription at the beginning and also at the end of his policy speech. This is what the Leader of the Australian Country party said - On December 10th, you will be called upon to make your final choice - a government pledged to foster and defend the philosophies of expanding freedom for the individual; or a government pledged to make you a pawn of a powerful State by a process of dictatorship, control and conscription. He concluded with an exhortation of the same sort. In between, he talked about reducing taxation, particularly sales tax. Referring to the Leader of the Opposition (Mr. Chifley), the Leader of the Australian Country party, towards the end of his policy speech, said - He does not tell you that socialism cannot work without man-power conscription. On the Treasurer's own words, capitalism apparently cannot work without manpower conscription and this Government cannot function without a measure of this sort which, en the one hand, seeks to raise a certain amount of sales tax but, on the other hand, uses the taxation instrument for the purpose of denying people an opportunity to work where and for whom they wish to work. Mr. Hasluck.- There is not the least direction of the individual provided for anywhere in this bill. Mr. CALWELL.- The honorable member is very simple. In. spite of his long experience of the United Nations organization and in spite of the fact that he had to fight Vishinsky on occasions, he fails to see that one does not achieve one's objective always by direct means so sucessfully as by the use of a measure of this sort. The Treasurer has said, "Let us find work for these people in other spheres. It will make the economy function more efficiently and satisfactorily than it is functioning to-day when women are buying lipstick at the rate of about six a year in the case of business girls and two or three in the case of housewives ". Mr. Hasluck.- Does the honorable member object to the use of the tariff to bring about economic effects? Mr. CALWELL.-No. But I object to a government of this sort, which talks so much about cant and humbug and hypocrisy, perpetrating a measure of this kind and expecting the country to believe it is doing so in an attempt to stop inflation. The Treasurer is no modern St. George. He is not going to charge the dragon of inafltion and spear it to death. He will creep up on inflation instead and pierce it to the heart with a lipstick container. He will woo it to the death with a jew's harp. He will soothe its troubled soul with the bagpipes, and then kill it with heavily taxed tooth picks. He will do all sorts of things but he will not meet inflation with the methods by which it must be met. Honorable members of the Opposition will tell the people of Australia this when they face them and the sooner we face them the better. Honorable members opposite have avoided the question of lipstick as if it were the plague. The Government proposes to tax lipstick but not shaving cream. That proves to the women of Australia that this is a man-drafted law, enacted by a man dominated parliament. No concern is displayed for the women in legislation of this sort. It is just another burden on the harassed housewife and the business girl. The Labour party stands for- the- abolition: of the sales tax. It has always- done S0 Mr. Fadden.- A Labour government introduced the tax. Mr. CALWELL.-Yes, at a time of grave- economic crisis. But when the Labour party was in- power during the worst period of the war against Japan, when the nation was in grave danger, it did not increase the rate of tax beyond 25 per cent, and it did not at any time take from the people more than £40',000,000- by way of sales tax in any one year. The- Chifley Government last year' reduced the general rate from 10 per cent, to 8$ per cent. The present Government parties went to- the people in the general' election campaign- and said, " We believe in getting rid of sales tax ". That declaration was implied in all their propaganda. Yet, now when- they are in power, they present us with a bill which provides for the unprecedented rate of 33-J per cent., a new limit that has been Specially established allegedly for the purpose of fighting inflation. Into the new category of goods that, will be taxable at 33-J per cent, will go such items as furs, jewellery and toilet preparations, which were taxed at 25 per cent, under Labour's administration, and also many items that were taxed by the Labour Government at only 8-J per cent. Into the 25 per cent, category will go many items that were entirely exempt from sales tax previously. This Government proposes to take from the people of Australia by means of sales tas a total amount of £57,500,000 this year. Of that sum, £7,500,000 will be represented by the added imposts for which this legislation provides. Somebody asked me by interjection earlier what the Labour party had done to abolish the sales tax. Labour governments progressively reduced the rates of tax, as I shall show. The Treasurer can verify my statements by reference to officers of his own department. Mr. Fadden.- I supplied the honorable member with the figures. Mr; CALWELL- That is true, but there is a slight discrepancy between those figures and other figures that I. obtained earlier-. I had no intention of checking the list that the right honorable gentleman provided, but I mislaid my first set temporarily and obtained another set. The Treasurer1 may not have seen- the figures- he supplied, which set out in detail the relief that was< afforded to the taxpayers by the- Chifley Administration, especially from the end. of the war in 1945 until the end1 of 1949. I shall deal specifically with- sales1 tax and customs and excise duties* the two forms of indirect tax to- which the Treasurer referred. In- 1943', long before the end of World War II., and periodically thereafter the Labour Administration progressively reduced sales tax. Two reductions were announced in one year - 1946. In the aggregate,, the people benefited by concessions that represented £35,525,000 a year. Mr. TomBurke. - And that figure is based upon the prices that prevailed before the onset of inflation. Mr.. CALWELL.- Yes. As the honorable member so sagely reminds me, the value of sales tax concessions granted by the Labour Administration,, if based upon present prices, would be about £50,000,000 a year. But this Government, with the greatest revenue in history bringing in £130,000,000 more than was recorded in the government accounts for last year, proposes to add £10,000,000 in one year to the sales tax bill and offers no worthwhile reductions. To the degree that it has planned a reduction of £1,000,000 a year, it has redeemed its promise; but to the degree that it proposes to levy additional sales tax amounting to £10,000,000, it has repudiated the undertaking that it gave to the electors. The Labour Administration reduced customs and excise charges by amounts that represented £6,000,000 in one year. In other words, the people benefited by the lifting of £41,000,000 a year from their indirect tax burden under Labour's administration. Of course, that amount would be nearer £60,000,000 than £40,000,000 if the prices of other years, on which it is based, were marked up to the level of present prices. The Treasurer will have to do a lot of talking if he hopes to explain away the proposed- increases. He made two excuses in his second-reading speech. First, he said that the increases were necessary in order to raise revenue, and, secondly, he said that they would enable the Government to tackle the problem of inflation.. Of the additional revenue that the. right honorable' gentlemam proposes to obtain by. this; means, about £.600',.0.00 will come from toilet, preparations, which are to be taxed at the rate of 33$ per cent. With a budget of over £700,000,000, he will get. £600;000 from additional tax on toilet preparations ! The idea is so fantastic that. I could not have imagined any Government that wished to survive - and I have never known* a government that was more desperately anxious to survive than is the present Government - daring to embark on such a course of action. In: the worst days of the war against * Japan, when the Labour Government had to tax the people as heavily as it could, borrow as extensively as it could, and use the national credit to the utmost limit it did' not raise the highest rate of sales tax beyond 25 per cent. But, in this war against inflation, when the Treasurer is able to lay his hands on all the money about the place, and nobody will deny that Australia is much wealthier to-day than it. was in the dark days of 1942, the right honorable gentleman presents to us this infamous proposal to impose sales tax at the rate of 33$ per cent, and to drag into the upper category goods that should not be taxed at all. There is a long list of items, the inclusion of some of which is- farcical. The Government's proposals appear even more fantastic when one examines the proposed amendments to the schedules that have been circulated. They deal with such items as school bags, kit bags and attache cases. The Treasurer must have reached the ultimate degree of mathematical perfection in assessment if he can proclaim that attache cases and kit 'bags shall be liable to the highest rate of sales tax if they exceed 18 inches in length, but shall be taxed at S$' per cent, if they do not. Under his amended scales, also, a mother who wants to buy a lunch bag for her child will be taxed at the rate of 33-J per cent, if the bag exceeds 12 inches in' length. And all this is intended to help the Treasurer in his fight against the enemy of inflation. Many members of the community are gravely concerned about the setback that, will be given to cultural development by the heavy impost of 25 per cent, upon radio sets, musical ' instruments! and gramophone records. That charge- will not be confined to. recordings of jazz- music and1 the* rest of the cheap stuff that isi often described as negroid and nasty. The finest works, of the most famous composers; as:- performed- by the greatest modem interpreters of music; will be a this- vicious* tax. Recordings- of Bach fugues and preludes-, Beethoven sonatas, and the works, of Rachmaninoff, Brahms, Wagner, Haydn and Liszt will be taxed in order that the Treasurer may combat inflation ! The exquisite interpretive genius of men like Kreisler will bear- an extra charge of 25.- per- cent, in order that luxury laving- shall be discouraged ! This proposal, of course, emanates from a government that is- always boasting of its culture. It has a lot of university products in its ranks, men who- mix with the- nice people and the higher orders of capitalist society. They propose to deny the average worker, who cannot afford to attend many high-class concerts, the right even to listen to gramophone records unless he pays an extra 25 per cent, for the privilege. Mr. Pittard.- What roti Mr. CALWELL.- I am sorry that Government supporters are so amazed whenever I tell them a few home, truths. They open, wide their big, blue, innocent eyes and gape when I tell them what the Government is doing to culture, and they become quite excited when I explain how this Government is making the little people carry the burden of its war against inflation. I shall be glad to hear their excuses and apologies, and I hope to meet some of them on public platforms in the electorates that they represent so that we can discuss these matters. I enjoy nothing better in the field of disputation than, to meet opponents in public on issues such as the one that we are now discussing. I shall guarantee to provide audiences in their own electorates for any Government supporters who may wish to debate with me. Many of them would not be able to attract an audience otherwise. Mr. CharlesAnderson. - Come to Hume! Mr. CALWELL.- I shall be glad to do so and to debate publicly with the honorable member the demerits of this bill and the wool sales deduction legislation as well. The Government proposes even to put photograph frames into the 25 per cent, sales tax category. Anybody who wants to frame a photograph of his grandmother or of a family group will have to pay 25 per cent, additional tax. If we want to bang framed photographs of the present Treasurer and the present Prime Minister side by side, we shall have to pay 25 per cent, more for the pleasure of doing so than would have been necessary under the Labour Government's scale of tax. I am concerned about the interests of young couples, who will have to pay this extra tax upon frames for their wedding photographs. Why, this Government even regards marriage as a luxury! Mr. Fadden.- But Labour taxed the wedding ring. Mr. CALWELL- The Treasurer can talk for 75 minutes in reply to this debate, as he did in reply to the debate on the wool sales deduction legislation, and try to explain to the people then why he finds it necessary to impose these outrageous and obnoxious charges. The right honorable gentleman would find an examination of the reductions and exemptions that were granted by Labour governments most enlightening. In 3944, the Labour Government exempted most building materials from sales tax. In 1945, it exempted a further list of such materials as well as plant and machinery used in various manufacturing processes and in certain mining operations. In April, 1946, it exempted certain foodstuffs, building fittings and explosives. Mr. Ward.- This Government has left alarm clocks off the sales tax list. Mr. CALWELL.-Yes, for the reason that the honorable member for East Sydney (Mr. Ward) has already stated. It wants the workers to wake early in the mornings so that they can get to work early and thus help to increase production. But all other clocks and watches, which the La'bour Administration reduced to the S-h per cent, tax category, are to be lifted to the 33£ per cent, category. The reductions that the Labour Government made in 1947 affected foodstuffs and aids to manufacture. In 1948, it made further reductions and exemptions, and in 1949 lowered the general rate of sales tax from 10 per cent, to 8$ per cent, and transferred some items from the 25 per cent, list to the 8i per cent. list. The Chifley Government established the lowest category of sales tax ever imposed - that of 8-J per cent. This Government has reversed the process and established the highest ever known in our history, that of 33J per cent. The goods that we reduced to the 8-J per cent, list will go back in many cases to the 25 per cent, category. The measure has nothing at all to recommend it. It is not devised in accordance with any of the recognized canons of taxation, because taxation that is properly applied is levied upon those who are best able to bear the burden. This proposal conflicts with, contradicts and violates every canon of taxation of which I have ever heard. It is a retrograde and retrogressive step and is one of which the Government will have reason to be ashamed when it ultimately faces the electors. Labour promises the people of Australia a complete review of all taxation. We shall get rid of the 33^ per cent, rate of sales tax. If it were not necessary to impose such a high sales tax during the war, it is not necessary to do so now. I remind honorable members opposite that sales tax was first imposed for the primary purpose of obtaining additional revenue. If back in 1931, the Government of that time was not, according to Government supporters, justified in introducing sales tax, then the present Government has even less justification for increasing it because it proposes, quite illegitimately, to do so in order to introduce control of manpower and industrial conscription. When Labour takes office - and the time is not far off now-- it will reduce indirect taxes, including sales tax and duties of customs and excise, because it believes that the right people to be taxed are the wealthy, and that the best and fairest tax is income tax that is imposed on a sliding scale according to the incomes of the taxpayer. If the Government wanted additional revenue why did it not introduce a measure to increase income tax in order to provide the money that it now seeks to obtain by increased sales tax? I know that next February or March the Treasurer will have to come to the Parliament again and bring down a blood and tears, supplementary budget to increase all taxes. Doubtless he will then seek to impose more taxes on wheat and wool, on manufacturers and on profit makers, and amongst other proposals he will probably ask the Parliament to increase income tax. He should confront his difficulties fairly now. If the right honorable gentleman considers additional taxes must be imposed, then he should introduce legislation for that purpose without delay. He will find that running away from that unpleasant duty will pay no better dividend than the Government's decision to run away from currency revaluation. The present Government is on the skids, and the sooner it falls the better. Mr. DRUMMOND.(New England) [4.32]. - The forecast made by the honorable member for Melbourne (Mr. Calwell) about the fall of the present Government was inspired, no doubt, by wishful thinking. One admires the burst of optimism which led the honorable gentleman to conclude that the people of Australia, who so recently experienced eight years of Labour's administration, with which the honorable gentleman was so prominently connected, will forget those experiences so quickly. However, the honorable gentleman turned his guns on the measure that is now before the House, and in doing so he brought into issue, as it were, the credibility of the witnesses for the defence. He said that the Labour party stands for the abolition of the sales tax. I remind the honorable gentleman, however, that while Labour was in office it did not supply much evidence of its desire to abolish that tax. The honorable gentleman also spoke at considerable length of the disabilities under which the Government of which he was a member laboured in dealing with a situation that arose out of the recent war and the after effects of that war. I am quite prepared to admit at. once the validity of that argument. We can not conduct a war on the basis that sacrifices are unnecessary. On the contrary, war must be conducted upon the basis that sacrifices are inevitable. Consequently, if the honorable gentleman takes his stand upon the theory that war and the implications of war render sacrifices necessary, including the levying of sales tax, which I dislike in theory as much as he does, I agree with him. Obviously if any nation is to survive in war everything must be made subsidiary to its proper defence. We come now to the consideration of how that valid argument may be applied to the present situation. Are we at war, or in danger of war? Incidentally I notice that discussions have proceeded elsewhere upon those questions. The Parliament is asked to confront the question whether we are at war or are in imminent danger of becoming involved in war, because, after all, any real threat of war requires us to implement a major defence programme. If we admit at once that there is a possibility of war occurring or, what is worse, that war is likely to occur, we must accept the full implications of the arguments placed before the House by the honorable member for Melbourne in justification of the attitude towards sales tax adopted by a previous Labour administration. I take up the argument from that point. I have with me a copy of the " Monthly Letter on Economic Conditions and Government Finance " issued by the National City Bank of New York for September, 1950. That bank is, I suppose, the largest private banking institution in the world, and it is certainly one of the best informed. The issue to which I have referred deals with certain matters that have a distinct bearing on the problem that is now confronting Australia. In particular, I invite the attention of honorable gentlemen to the fallowing extract: - The prompt action by Congress in expediting a bill to increase federal taxes substantially, as recommended by President Truman following the outbreak of war in Korea, will have the effect both of providing an increase in Treasury revenues to cover the rising military exxpend i tn res and of acting as a brake upon the inflationary pressures now present. That statement refers both to the defence programme undertaken by the United 'States of America and to the inflationary pressures that 'have arisen from the defensive .-action that has 'been taken by the 'United States 'Government. When such action is taken by our .great ally and friend, can we be so 'blind to the obligations >of our own .position that we will "neither face -up to the need to provide '.proper defence for ourselves nor take steps to counter inflationary pressures? After all, Australia's destiny is inextricably bound up with that of the United States of America and, indeed, of all Western democracies. When we find that a nation so wealthy and powerful as is the United States of America is compelled to revise the taxation programme put before it by its President in order to achieve a similar objective to that now sought by the Australian Government, which is to obtain .additional revenue by increasing taxes, I 'think that it is idle and beside the point for honorable members opposite -to criticize the present Government for having introduced this measure. To suggest that because the present Government promised, in the light 'of the situation that obtained during the last general-election campaign,, to reduce taxes, it should be reproached for having (broken faith with the electors, or that it has introduced .a taxation measure that is not necessary, is to reflect the irresponsibility .of those who offer such criticisms. As one who -followed the leaders of the present .Government during the last general election campaign, I admit at once that I expressed freely the view that it was desirable 'that taxes should be reduced. I said, in particular, that it would be in -the interests of the country to reduce -sales tax, and I still believe that if circumstances permitted sales tax -should be reduced and ultimately discontinued. However, we should be failing in our duty, and the 'Government would be failing in its -duty, df we did not clearly appreciate the -fact that circumstances have materially altered since the 'Government leaders delivered their .policy speeches. It 'requires courage to introduce to the Parliament measures that are exactly contrary to those advocated by the victorious political parties during an election campaign. Of course, the honorable member for Melbourne admitted that the previous Government, of -which ' he was a member, -actually Teduced expenditure on defence during its .'last year of office. In contrast, the present Government had trebled the provision for defence, ;and it is now confronted, in .consequence, with the need to obtain additional revenue from taxes. I have already pointed out that only a couple of months ago the United -States of America >was 'compelled to provide additional funds in order to .combat inflationary pressures, and to .take .wide and sweeping .powers to increase taxes -of all kinds. I have already referred to the 'particular reason -why the 'Government proposes to increase sales tax, and I have cited the -action taken by the United States Government. I have also pointed out that we cannot dissociate 'ourselves from the actions of -that nation. Common decency compels us to take parallel action. If action taken by the United States of America will have the effect of strengthening the democracies, to which we belong, we should -be failing not only in common sense but also in common decency if we did not take parallel action. The United State Government decided not only to increase the rates of sales tax 'but also to extend its incidence to embrace deep freezers, slot machines, and auction sales of furs and jewellery. Compare that decision with the proposals that our Government has introduced. Parallel action is to be taken by increasing the tax -on jewellery and furs. Of course, honorable members opposite, who advocate that it is particularly heinous 'to increase sales tax at any time, overlook the principle upon which the present sales tax is based, which is that it is borne by those who can best afford to pay it, and that it is. therefore, the least harmful tax that people can be called upon to pay. I suggest, therefore, that the criticism voiced by the Opposition is absolutely unsound. After all, if the goods on which sales tax is to be increased are not luxuries they are certainly not nearly so necessary as are agricultural machinery, cane lifts, stump and tree extractors and grubbers, foods manufactured in Australia, metals, 'building materials, and -builders' hardware, which includes sanitary fittings and practically all the -smaller articles 'that are imported in order to 'speed up 'the building programme. Such items are entirely omitted from the list. Materials of all -kinds that are used exclusively or primarily for the making of concrete or cement or of .mortar or plaster fixtures, and a wide range of electrical fittings and accessories, all of -which are very important in connexion with our building programme, are -also omitted from the list. The 'items that are exempt from sales tax also include engines, alternators, primary and secondary 'batteries, other generating equipment, and earthenware bath-room .fittings. I have not attempted to cover the whole list of items that are to be exempt from sales tax under the commonsense and practical policy of the Government. Great credit should be given to the Government for its adoption of a policy that will reduce the cost of essentials for home building and because it has diverted .the incidence of sales tax towards less essential items. The rate of sales tax on motor cars is to be increased from 8-J- per cent, to I'O per cent., but such vehicles as panel vans, delivery vans and utilities, the last-named of which is a remarkable development in the motor trade, ''being a vehicle that is 'half lorry and half car, which has come into enormous use throughout country districts 'and is one of 'the most 'useful developments yet made, jeeps, trucks, lorries and motor vans are excluded from the increase. That fact also shows that while circumstances force the Government to increase sales tax on motor cars, other vehicles that are vitally associated with production and with a reduction of the cost of living are not to be subject to an -additional tax. I hope that the day is not far distant when it will be possible to remove the sales tax on musical instruments.. I believe that our community will be better off if it has more music - more harmony and less discord. The people's morale can be strengthened and their happiness increased by broadened opportunities for the exercise of their musical talents. New Australians have introduced a desirable leaven of musical talent and appreciation into the community. The sooner we can reach the point where it will be possible to review the sales tax on 'musical instruments the better will it be for the nation. I appreciate the action -of the Treasurer in removing the proposed additional sales ta-x -on batteries "used in wireless sets. If it were possible to police the use of battery 'wireless sets themselves, I should like "to have the sales tax removed from them also. I admit, however, that it is very -easy -to -convert a battery wireless set into a power-using set, and so it might be impracticable to remove the tax on such wireless sets. Nevertheless, the Treasurer has shown a practical understanding of the difficulties of country people by providing that no increase of tax shall be 'imposed on batteries "for wireless sets. Battery wireless sets are used mostly by people in outlying areas, many of whom are unable to afford the installation of an electricity generating plant that would provide them with power for an ordinary "wireless set. Naturally I .am grieved to find that bagpipes are to be subjected to an increase of sales tax. I am sorry to find that certain people -query whether bagpipes should be included among musical instruments. I 'believe that this music of my ancestors is one of the finest means in the world for the raising of morale. I sincerely hope that not only bagpipes, but also the regalia used by Caledonian societies, may a't no distant date be excluded from the operation of 'sales tax. I have traversed the arguments that ha-ve -been 'advanced by the spokesmen of the 'Opposition, and I have pointed out that the reason why the Government has found it necessary to review the original proposals that it placed before the people in a manner that would make them less oppressive and harmful, is the same as the reason that compelled the United States Government to make provision against inflation on the one 'hand and to levy taxation on luxuries on the other hand. It would be extremely unwise for 'this 'Parliament to mislead the people into the belief 'that any 'Government can save this country from having to face '-up to 'the realities of the present situation *by conjuring ideas from 'the "vasty deep, when the United States, which is our greatest ally in point 'of 'material strength, and is also a great -ally in point of sentiment, has been compelled to ta'ke drastic action to tax the American people to prevent inflation while at the same time it has to provide for the military defence of the whole civilized world. So while I regret the necessity to increase sales tax, I believe that the Government had no alternative, and that it has acted with discretion and judgment in relation to the taxes that it seeks to impose. Mr. CLYDECAMERON (Hindmarsh) [4.53]. - I do not propose to deal with matters other than some of those that I think have been overlooked by the Government in relation to its definitions of what are essential commodities and what are non-essential commodities. I propose to select from the list of items included in the bill the main items in respect of which I consider there are anomalies, and to make a plea on behalf of people who may be affected by the tax on those items. I shall do so in order to find out whether the Government will not, even at this late stage, give someconsideration to a review of its decision in regard to them. First, there is the proposed increase of sales tax on stationwagons from 8i per cent, to 10 per cent. Such vehicles are sometimes used by shearers while following their vocation in the pastoral industry. Already legal provision has been made that primary producers may purchase station wagons free of sales tax. I made representations to the Government many months ago to have the same privilege granted to shearers who wish to purchase station wagons for the sole purpose of enabling them to travel through the outback areas of Australia in pursuance of their occupation. The Treasurer (Mr. Fadden) will agree that, if the matter be viewed from a dispassionate angle it must be admitted that a shearer who buys a station wagon in order to carry on his work is not purchasing a vehicle for pleasure, or, indeed, for any purpose other than that of carrying out his work. Surely a person who travels from shed to shed and offers his services as a shearer is contributing almost as much towards the production of wool as is a stationowner who is allowed to purchase the same kind of vehicle free of sales tax because he intends to use it for the purpose of mustering his sheep and travelling from bore to bore and dam to dam attending to the requirements of his property. I was rather disappointed when I found that station wagons were not exempted from sales tax by this measure, so that shearers would be given the same consideration as owners of properties receive. Mr. Turnbull.- What is the difference involved ? Mr. CLYDECAMERON.- A shearer who purchases a station wagon will have to pay 10 per cent, sales tax on it. A primary producer or station-owner may purchase the same kind of vehicle free of sales tax. A provision relevant to such purchases as the latter is already law and is operating. I made written representations to the Treasurer many months ago, but he could not make any alteration of the position at that time without making an amendment of the act. However, I hope that now that the act is in the process of being amended he will make the suggested concession to the relatively few shearers who may decide that station wagons are their most suitable means of transport over the rough outback roads that they have to traverse in going from shed to shed. I turn now to. the subject of sales tax on batteries for use in wireless receiving sets that was referred to by the honorable member for New England (Mr. Drummond). I am glad to notice that that matter is being rectified by the Government and that such batteries will still be subject to the old rate of 8-J per cent, instead of the rate of 25 per cent, that was proposed when the measure was first introduced. I consider that the Government's decision not to increase the rate was wise, and because it found itself in a position to make that decision I am hopeful that it may be able to review also other rates that are tentatively set out - I hope that they can be regarded as being only tentatively set out - in this, proposal, before the bill is passed, either in this House or in another place, and will remove the anomalies that I have mentioned. I turn now to the tax on gramophone records. The honorable member for Melbourne (Mr. Calwell) and the honorable member for New England very rightly directed attention to the fact that Australia is at lon? last beginning to develop a sense of appreciation of good music. The Australian Broadcasting Commission should be given full marks for the part it has played in inculcating a sense of appreciation of good music in the people. Already we find an inclination in every stratum of society for people to seek a better class of music than they formerly sought. The best way to enable the people to enjoy better music and to cultivate their appreciation of it is to make easy the purchase of gramophone recordings of good music played by good orchestras, which they can play at home to their friends and their families. They would thus derive a more permanent benefit from the good music that is available through the medium of records. I shall now deal with the proposal to increase to per cent, the rate of sales tax on watches and clocks and on bands and straps for wristlet watches. Nobody can logically argue that a wristlet watch or a clock is an unessential item. I have never in my life seen a person wearing more than one wristlet watch at a time. When one has been accustomed to using a wrist watch one finds it very difficult to carry on the ordinary business of life without it. In these days when the tempo of life is constantly increasing, people find it necessary to use wrist watches to enable them to be on time to catch trains, trams and buses and . to keep appointments. Mr.CURTIN - The honorable member should also say something about alarm clocks. Mr. CLYDECAMERON. - Alarm clocks are allowed to be sold free of tax. That is probably because the Government realizes that alarm clocks are necessary to enable workers to get up early so that they will be able to get to their work at starting time. Another classification that deserves reconsideration by the Treasurer is that of fountain pens, particularly ball-point pens. The ballpoint writing instrument was first introduced by the Biro people, and since then it has been imitated by many other manufacturers. Ball-point pens are used almost exclusively by clerks, during the course of their duties, and by school children. It is unfair to impose an extra burden on such people. No one writes with a fountain pen or a ball-point pen unless it is necessary to do so, and people buy them and use them only because they are absolutely essential to their activities. They can by no stretch of the imagination be called luxuries. Other articles which are caught up by the new rate of 33J per cent, are lighters for cigarettes. People use lighters to light their cigarettes only for the purpose of saving matches. Nobody lights his cigarette with a match and then lights it a second time with a cigarette lighter. Why should a person who decides to use a cigarette lighter instead of matches pay a 33-J per cent, tax simply because he makes that choice? I now turn to the proposed tax of 33-^ per cent, on pipes. Not many people in the community other than age pensioners smoke pipes. Mr.Eggins. - The Leader of the Opposition (Mr. Chifley) smokes a pipe. Mr. CLYDECAMERON.- That is quite correct, but by far the biggest percentage of pipe smokers are age pensioners. Not many age pensioners smoke cigars because they cannot afford them, neither do many of them smoke cigarettes. I do not say that facetiously. I say in all seriousness that elderly men from the age of 65 to SO years do not as a rule smoke cigarettes. The majority of those elderly men are age pensioners. It is unfair that they should have to pay extra for their pipes, which to them are a necessity. The sales tax on kitbags and attache cases up to IS inches in length is maintained at the old rate, and a new rate of 33 1/3 per cent, is proposed for kitbags over that size. I cannot see why the Government should draw the line at 18-in. kitbags. It should be remembered that whilst a child would not use a kitbag larger than 18 inches in length, many working men use kitbags of a larger size in which to carry their lunch to work. If this proposal is endorsed, a working man who wants to carry his lunch, overalls, towell and soap to work will be compelled to pay a 33£ per cent. tax. Of course, I do not overlook the fact that in this bill some items have been completely exempted from the previously imposed tax. For instance, bovril, yeast, macaroni and spaghetti, to mention just a few, have been put on the free list, Many items far more essential than spaghetti and bovril have been loaded with the increased rate of 33$ per cent, tax. I also ask that the Treasurer give his personal consideration to. the matter of removing the tax on wire clothes baskets. I do not know whether the Government had in mind that wire clothes baskets would be caught up in the new proposal, but they have been because the schedule recites - Baskets and hampers of a kind used for private, personal, domestic or office purposes, made of cane, wicker, seagrass, metal . . . The word " metal " brings wire clothes baskets within the scope of the tax. I shall read a letter which I received from the Adelaide Welding Company, in which it is stated that a considerable portion of the company's business is concerned with the manufacture of wire clothes baskets. The letter reads, in part, as follows : - . . We find this item is now taxable at the rate of 33J per cent, as against 8J. formerly, and this sharp rise has seriously affected our market and our business. We had always considered our product as an essential domestic article and how those responsible for the tax schedule would explain to a housewife that Iter clothes basket is a -t luxury item " is beyond us . . . I appeal to the Treasurer to give special consideration, to having exempted from this provision the item clothes baskets, particularly wire clothes baskets. Nobody would suggest that a person who bought a wire clothes basket was of a " hUfalutin " type. Those who buy wire clothes baskets can probably not afford the high cost of other types. I hope that the Treasurer will give this matter further consideration and will agree to exempt clothes baskets made from wire, and preferably clothes baskets made from any material. A clothes basket is certainly not an unessential item. I also direct attention to- that part of the bill which foreshadows the imposition of a 33$ per cent, tax upon hairdressing requisites. Apparently the use of soap for personal cleanliness is commendable and carries a low rate of tax, but the use of shampoo, which is only purified liquid soap, is regarded as something which should be discouraged by an extreme financial penalty. I direct honorable members' attention to the fact that hair cleanliness appears to have been singled out for particularly harsh treatment. Yet it is as essential to maintain cleanliness of the- hair as it is to maintain cleanliness of the body in general. No objection is offered to the exclusion of razor blades and shaving creams from the incidence of sale3 tax, but women's hair requirements are singled out for the imposition of a high tax. One hairdressing firm in Adelaide has already informed its clients that the charge for a permanent wave, is to be increased by a guinea. Having her hair permanently waved has become as essential to" a woman as shaving is to a man. It is certainly not a luxury; in fact a permanent wave is an absolute necessity to many women. If the total cost of the tax impositions on women's hairdressing articles is to result in the charge for a permanent wave 'being increased by a guinea, then only wealthy women will be able to have permanent waves. Not only the wealthy woman, but also every working man's wife is entitled to a permanent wave if she considers that she needs it. If the taxation imposed on women's hairdressing requirements comes into force it will be completely out of the question for a working man's wife to have a permanent wave. Working girls may still be able to have their hair treated because their wages are fairly high. But when they marry and have to live on their husband's wages, their income becomes considerably less than it was in their single days and they will not be able to have their necessary permanent waves. The tax on hair oils will be increased by 33$ per cent. To some people, hair oil is certainly not an unessential article. Hair oil is necessary to many people for the prevention of the deterioration of the hair. If some people do not use hair oil the hair deteriorates so much that baldness ensues in men and unsightliness of the hair in women. Why a 3-3$ per cent, sales tax should be placed on. combs is beyond my comprehension, because every civilized person needs a comb to keep his hair tidy. I know of only one honorable member who comes into this House stroking his hair with his- fingers and1 I assume- that all other honorable members: use combs- before they enter it. It is absolutely essential for everybody to comb his hair at least twice a day: Yet combs are taxed at the rate of 33-1 per cent. Again, the person who brushes his hair in ord'er to keep it tidy and healthy is to be called upon to -pay 33$ per cent, sales tax when he buys a brush. The sales tax on shampoo, powders has also- been increased.. The Government, apparently, has' set out to penalize persons who endeavour to keep up a decent appearance. I shall not say anything about the proposal to increase sales tax on lipstick, face powders and powder puffs. The honorable member for Melbourne (Mr. Calwell) has dealt with it effectively. However, nothing could be more distressing to the male population than the spectacle with which they would be confronted if the women absolutely refused to use lipstick, face powders,, rouge arid other cosmetics in retaliation: of the Government's action in increasing sales tax on those articles. Mr. Eggins.- If they did', they would still be as charming as they are now. Mr. CLYDECAMERON. - I do not agree with the honorable member. I believe that most women increase their charm and enhance their appearance by the use of cosmetics. One naturally concludes that the Government in proposing to increase the sales tax on the articles that I have mentioned has acted on the advice of either widows or confirmed bachelors and of men who are both bald and elderly and have no need to use a comb, and consequently has ignored the average woman's viewpoint. These proposals are at variance with the promise that the present Prime Minister (Mr. Menzies) made in his policy speech at the last general election when he said - Wc will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs. In spite of that promise we now find that whilst the Government has reduced sales tax on a few items by £1,000,000 in the aggregate it has, at the same time, increased the tax on other items by £10,000,000 in the aggregate-. Under these proposals the Government expects to increase its. collections of sales, tax by £9,0.00^000. which is. a considerable increase- of the overall indirect tax -burden which the Prime Minister promised would, be reduced. I note that the sales tax is not to be increased' on such articles as Scotch whisky, champagne or luxurious carpets upon which it could reasonably be increased in order to penalize the users of luxury goods. In the main, sales tax is to be increased on items that are included among- the everyday requisites of the average man. and woman. Mr.. LESLIE(Moore) [5.18].- The arguments that honorable members opposite. have advanced against this measure ha-ve been so- weak and ridiculous that I do- not propose to- reply to them. However,, I am impelled to remark that if the: honorable member for Melbourne (Mr. Calwell.) had set out to give a humorous- dissertation on how the Parliament is supposed, by cynics,, to work he could not have improved upon the exhibition that he gave this afternoon. He was merely foolish when he waxed eloquent in discussing the proposal to increase sales tax on such articles as lipstick and other cosmetics, which are of relatively small- importance. Possibly, the Government realizes that beauty is more than skin deep and that these proposals which will discourage the purchase of cosmetics may tend to "bring out the- inherent beauty of women and discourage the exaggeration of -beauty that is more apparent than real. When the honorable member for Hindmarsh (Mr. Clyde Cameron) criticized the proposal to increase sales tax on wire clothes baskets he unconsciously illustrated the real purpose of this measure which is to discourage the use of essential materials that are in short supply in the manufacture of articles that can be made equally efficiently with other materials- that are not so urgently required in industry generally. By increasing the sales tax on wire clothes baskets the Government will discourage the use of wire and metals for that purpose with the result that such materials will be made available in increasing quantities for the manufacture of articles that the community requires far more urgently. Mr. ClydeCameron. - The quantity of wire that would he used in the manufacture of wire clothes baskets would be relatively small. Mr. LESLIE.-The total quantity of wire that is used in the manufacture of articles of that kind is relatively large, and if manufacturers are obliged to use substitute materials it will be made available to overtake shortages of more essential articles. If that proves to be the case, the Government will have helped to curb inflation to that degree. At first glance the proposal to increase the sales tax on an article such as a wrist watch may not appear to be warranted, but honorable members opposite, apparently, fail to realize that the tax proposed to be placed on the lower priced and unadorned articles is relatively negligible, whereas the tax that will be borne by the highly prices adorned article to which has been added frills that contribute nothing to its real values will be correspondingly high. In view of the present prosperity of the community generally buyers are purchasing the fancy article and overlooking what might 'be called the utility article. For instance, prior to the recent war a most reliable watch that a person could buy was the Westclox Boyproof watch; but if a person now offered to buy such a watch for a boy the latter would spurn it and ask for a. more costly watch which would not be more serviceable than would be the cheaper article of good quality. If these proposals have the effect of diverting the spending power of the community to the purchase of sensible goods at lower prices on- which the sales tax will be comparatively low and of discouraging the purchase of fancy things they will help considerably to arrest present inflationary trends and to encourage the increased production of basic materials. I take this opportunity to direct the attention of the Treasurer (Mr. Fadden) to an unsatisfactory feature of the administration of the sales tax. Many traders are taking advantage of the imposition of sales tax on certain goods to work a fine racket foi' themselves. Since this measure was introduced I have had brought to my notice a case that will illustrate the practice to which I refer. A person has informed me that when he went to pay for a wireless receiving set that had been built to his order he was obliged to pay double sales tax. When I inquired, into the matter I found that certain traders were similarly charging sales tax illegally to purchasers of other classes of goods. In the first place, sales tax is charged by the wholesaler who holds a registration certificate from the Commissioner of Taxation authorizing him to charge sales tax on articles that he supplies to retailers and distributors and to collect that tax from the latter, who recoup themselves of the sales tax thus charged in the price that they charge to the ultimate purchaser. However, many traders add sales tax to the normal and authorized sale price, which already includes sales tax in respect of the components of the article. Mr. Curtin.- The honorable member supports the Government. What is it doing to stop that practice? Mr. LESLIE.- I do not wish to engage in a party political argument on this matter. The practice to which I refer has been going on for a considerable time and it calls for remedial action on the part of those who administer the sales tax. I suggest that it can be stopped by requiring every person who is entitled to charge and collect sales tax to hold a registration certificate from the Commissioner of Taxation authorizing him to collect the tax and also by providing that all such persons, whether they be wholesalers or retailers, shall display such certificates on their premises or be obliged to produce them if and when requested by customers to do so. In that way the public would be protected against traders who are illegally charging sales tax. At present, there is a wide impression that the ordinary retailer is entitled to collect sales tax in addition to the marked price of goods which already include sales tax in respect of the components used in the manufacture of such goods. In the case to which I refer the wireless receiving set was made and sold not by a reputable trader but by an electrician who purchased the necessary accessories, including valves, from a wholesaler and the price which he paid to the wholesaler included sales tax in respect of all of the parts that were used in the construction of the set. When the electrician delivered it to the man to whose order he had built it, he said that the price was £45, which the customer had previously arranged to pay, plus sales tax. That price included the cost of the components of the set, the sales tax chargeable thereon and the cost of the labour used in making the set. The electrician then charged his customer sales tax at the rate of 25 per cent, of that price and thus got a rake-off of approximately £12 which he promptly put into his own pocket and did not account for to the Commissioner of Taxation. That is how certain traders are exploiting the sales tax. I ask the Treasurer to arrange for officers of the Taxation Department to devise means by which the public can be educated to the fact that a consumer, unless he is dealing with a wholesaler who possesses a certificate authorizing him to collect sales tax, is not required to pay the tax as a separate item. I now direct the attention of the Treasurer to an injustice that is inflicted upon the people of Western Australia by the operation of sales tax. As the right honorable gentleman is aware, that impost is assessed upon the wholesale cost of an article, to which freight charges have been added. Western Australia has not a wide range of industries, and, therefore, its population is obliged to rely to a considerable degree upon manufacturers in the eastern States to supply its requirements. Honorable members will immediately realize the position. An article that is manufactured in Sydney or Melbourne may be delivered by a boy on a bicycle or by a carrier with a motor truck for almost a nominal charge. Consequently, the addition of freight or cartage to the wholesale price of an article, when it is sold in the eastern States, does not substantially increase the amount of sales tax that is payable on it. But the public of Western Australia are in a different position. In recent times, as a result of the disruption of shipping and of rail services, merchants in that State are requesting manufacturers in Sydney and Melbourne to despatch their goods by air. The freight on such orders is considerably more than the charges made by shipping companies and the railways upon similar articles, and, when it is added to the wholesale price, the sales tax payable on it is substantial. In that way, a heavy burden is being imposed upon the people of Western Australia. One firm required them urgently to obtain tyres for their motor trucks. They would have been delayed for months if they had been sent by sea or by rail, and, therefore, they were despatched by air. The freight was so substantial that, when it was added to the wholesale price, the purchaser waa fleeced by an amount of £100 in respect of the additional sales tax that he waB obliged to pay on them. I realize that this is merely a technical matter, but it should be adjusted without delay. I am firmly of the opinion that the sales tax should be imposed on the wholesale price of an article, without freight and handling charges. As I have shown, the people of Western Australia are suffering a severe disability as a result of the present method of computing the sales tax, and I contend that the system should be revised with a view to removing that anomaly. When the matter was brought to my attention, I suggested to some firms in Western Australia that they should take action to obtain much-needed relief. Indeed, I have an idea that grounds for action may exist under section 99 of the Constitution, which provides that the Commonwealth shall not differentiate as between States. However, the merchants with whom I discussed that matter replied, in effect, " Why should we worry ? The sales tax does not concern us, because we pass it on to the consumer. If people are prepared to pay it, let them. It is not our pigeon. We are only the collecting agents for the Government". I quickly discovered that assistance to rectify that anomaly would not be forthcoming from that quarter. The only remaining course that is open to me is to direct attention to it in this Parliament, and to urge that the special position of Western Australia in respect of the operation of the sales tax shall be sympathetically considered. Certainly, the disability that is now inflicted upon the people of that State should be removed without delay. I say frankly that I dislike tax measures of any description, and my opinion in that respect is shared by all Australians. I am perfectly honest about my attitude. But I believe that the Treasurer, under this legislation, will tax non-essential goods - I shall not des.scribe them as luxury goods- - and his decision is wise in view of the present economic circumstances of Australia. 1 believe that, ultimately, the Government will be able to show that definite results have been achieved by speeding up the manufacture of our 'essential requirements and by restricting expenditure on luxury items, because such a policy will .assist to combat the present inflationary conditions. Opposition members have .attempted to make 'a great deal of party political capital at the expense of the decision to increase the sales tax upon cosmetics, including lipstick. I do not support those criticisms. After all, lipstick is kept -in a metal container, and I believe that such metal can be used to better advantage. Why cannot a cardboard container be used? Would it not serve the :same purpose? There are unlimited opportunities for re-orientating the ideas of the people, in view of this country's economic 'circumstances at the present time. I do not believe the assertion by Opposition -members that this legislation is harsh, and I consider that it will assist to achieve the necessary -re-orientation of our ideas. Mr. CREMEAN(Hoddle) [5.37].- The -honorable member for Moore (Mr. Leslie) cited a number of examples to show that the operation of the sales tax inflicts hardship upon the people of Western Australia. I am confident that if he has assessed that position fairly, the Opposition will support any action that is taken to correct it. Mr. Leslie.- Why did not the preceding Labour Government take that action? Mr. CREMEAN.-We are prepared to believe that the honorable gentleman spoke with sincerity, but he was not willing to extend that courtesy to .us, because he criticized 'the speech of the honorable member 'for Melbourne (Mr. Calwell), who presented the Opposition's case against this bill. The honorable gentleman appeared to consider that the excellent arguments adduced by the honorable member -for Melbourne could be swept aside with derisive remarks, but he was greatly mistaken in that respect. The Opposition's contentions about the increase of sales tax on cosmetics and musical items are far from being a joke to the people who will be affected by it. I :assure the honorable member for Moore that if he .adopts a similar .attitude whendiscussing this matter with members of bands and choral societies, and with women generally, he with quickly discover that the views expressed by the honorable, member for Melbourne are in accord with current thought. Government supporters ha.ve accused the honorable member for making an incorrect assumption from certain provisions of this bill. He was derided when he said that the adoption of this measure would mean a compulsory diversion of man-power and, if my memory of the incident is correct, the honorable member for Ballarat (Mr. Pittard)' denied that it would have such an effect. I quote the words that were spoken by the Treasurer (Mr. Fadden) when hemoved the second reading of the Mil - In the. first place, the heavier impost can reasonably bo ;expected to check the demand for such goods, to cause a diversion of labour to employment of greater value to the nation . Is not that compulsory diversion of labour? Mr. Fadden..- Where is the element of compulsion.? Mr. CREMEAN-It is clearly stated -in the right -honorable .gentleman's ownwords. Mr. Fadden..- I did not say that there would be a compulsory diversion of labour. Mr. CREMEAN.- The right honorable gentleman, when referring in hisbudget 'speech 'to the Government's proposal in respect of sales tax, also said - lt is hoped 'that the -discouragement of higher :rates -will check, ito .some extent, thegrowth of 'this competition for materials and' man-power which could .be better employed in. the production of .more essential .goods. Do not those words mean the diversion of .man-power ? Mr. Fadden;- Where is the element of compulsion ? Mr. CREMEAN.- Of course, it is compulsory. Mr. Fadden.- It is not. Mr. CREMEAN.- It is compulsory in this respect, that if the Government closes avenues of employment in the industries that manufacture the various articles set out in the schedule to this bill, people will be, of necessity, diverted to other industries. Mr. Thompson.- It is gentle persuasion with a big stick. Mr. CREMEAN.-Obviously, the honorable member for Melbourne was correct when he said that the adoption of this bill would mean a compulsory diversion of man-power. His statement cannot be contradicted. Mr.White - The honorable gentleman has a great imagination. Mr. CREMEAN.-Yes, Opposition members have a great imagination, which makes ns anticipate those things which are right, and avoid those things which are wrong. This bill will increase the sales tax upon many items and will thereby adversely affect a great majority of the people. That, in my opinion, is wrong. I remind the House that the present Prime Minister (Mr. Menzies), when he was broadcasting his policy speech to the nation during the last general election campaign, emphasized' that the incidence of indirect taxation would be reviewed, with a view to scaling it down. This bill does not scale down the sales tax, which is an indirect tax, but it provides for a complete scaling of the public in certain respects. The present Treasurer; when he delivered his policy speech on behalf of the Australian Country party during the- last general election campaign, made a similar promise- to review indirect taxation, because he realized that it had a marked effect upon the upward trend of the- cost of living. The right honorable gentleman, when he made that statement, must have had sales tax prominently in his mind. His method of honouring that pre-election promise is- to- increase sales tax 011: ai number of items. It is1, true that the- Commonwealth, as a result of this legislation, wild! collect from sales tax: an additional £7,500,000 for the- remainder of the current financial, year, but, in the process,, serious hardship will' be inflicted upon, many people. Has the Treasurer considered the effect of the higher tax on the radio manufacturing industry? I have received a letter from Electronic Industries Limited, a well-known, reputable firm of radio manufacturers in Melbourne. Mr. Pittard.- I believe that all honorable members have received similar letters. Mr. CREMEAN.- That is probably correct, but I propose to read* some extracts from my copy, because I believe that it tells a sincere story. It states - The terrific burden of tax that the Government has seen fit to place on radio is one of the most retrograde steps taken by any government for many years. We, as an industry, have accepted our responsibility to the community by keeping the price of radio moire closely in line with pre-war figures than perhaps any other product. With prices rising on every hand we have striven to keep radic within the reach of the wage-ea.rner. It has been due entirely to our scrupulous attention to efficiency within the industry that we have succeeded in doing so. We have regarded this as our duty because of the very special place that radio occupies in the life of the community as the companion of the sick, the maimed, and blind, and, indeed, of every man, woman and child among us. Twenty to- 25 years ago radio might, quite justifiably- perhaps. have been looked upon as a luxury, but today it is a- universal necessity as- a medium of civic, political' and enlightened citizenship. The concluding part of the letter is a very strong commentary on the proposal to increase the sales tax on radios to 25 per cent. It reads as follows : - The tax not only penalizes the man who needs a new radio but the inclusion of component parts for replacements penalizes the man. who has to make do with his old set, the man who has to watch every penny. Inclusion, too, of ra'dio batteries in the schedule is- a sectional ta-x which' will fall entirely on the country dweller. I understand that since that was written the Government has' decided to retain, the present rate of tax on radio batteries. The letter goes on to- state - It is of importance also that the action your Government has taken might very well have the- effect, of decimating an- industry on which Australia leaned very heavily in World War II. and on which it must inevitably lean even more heavily in any future war. It is reliably estimated' tha;t 40' per cent, of the equipment that will be used m any future world conflict will involve the use of, electronics in some form or other. It is to the radio industry that the nation must turn for the skilled tradesmen to provide this electronic equipment. Many people regard radio as an essential part of household equipment and the in-, crease of the sales tax on this item will impose a grave injustice. Although the honorable member for Moore accused the honorable member for Melbourne of approaching this subject in a humorous vein which was unsuitable in the Parliament I agree with what the honorable member for Melbourne said regarding the increase of sales tax upon musical instruments such as pianolas, player pianos, gramophones and wireless receiving sets. Any bill that penalizes the use of articles such as musical instruments impinges on the cultural life of the community. The average wage-earner has no opportunity of attending oratorios or concerts. He has to have recourse to the musical items referred to in this measure. The imposition of sales tax upon such articles may not put them beyond his reach but it will impose a heavy strain upon his capacity to secure new musical instruments or replacements. Included in the items on which the tax is to be increased are items such as cymbals which make up the component parts of a fife band, an ordinary band or a brass band. The imposition or increase of sales tax on such items will place a hardship on the many bands that render cultural benefits to the people throughout Australia. Bands that are at the constant beck and call of charitable organizations and municipalities for the purpose of promoting charitable entertainment will be affected very adversely by these provisions. It is a travesty of progressive government to seek to put value into the £1 by increasing sales tax on items such as these. An honorable member opposite said that one cannot eat cosmetics and that they are not a necessity. He does not seem to understand that the modern woman regards cosmetics as a necessity. The increase of sales tax on these items will render a disservice to the women of Australia. Cosmetics are not a luxury, they are an absolute necessity. I should like to hear honorable members opposite tell the women in their electorates that cosmetics are a luxury. They would receive a salutary answer. Photographic material such as lantern screens and commercial slides are included in the list of items on which it is proposed to impose tax ranging from 8J per cent, to 25 per cent. Those items are used extensively by advertising companies and are the media on which screen advertising is based. They are very sound media of advertising and may be compared with litho plates, on which there is no sales tax. Both these items provide a means of visual advertising yet the sales tax on them is to be increased whilst no increase is proposed of the tax cn litho plates or on any plates used in newspaper advertising. That is one of the many contradictions in the schedule. It has been said that the provisions of this bill will not be imposed with unequal severity on one class in the community - that it will apply equally to all. Such is not the case. It is proposed that the rate of tax on certain goods shall be increased from 8$ per cent, to 10 per cent. That increase of 20 per cent, is to apply to motor cars, but the sales tax on other goods is to be increased by 200 per cent, and more. The actual cash return to the Treasury may be greater in respect of a motor car than in respect of a cosmetic, but the proportionate increase will be only 20 per cent, in the case of a motor car whilst it will be 200 per cent, in the case of cosmetics and wireless sets. These increases will fall most heavily upon a class that is less able to bear them. One could point out many anomalies in the schedule of proposed increases. There is a great contrast between this proposal and the achievements of the Labour Government during the years from 1942 to 1949. The proposal to increase sales tax is in conformity with various broken promises of this Government. Between the years 1942 and 1949 sales tax reductions effected by the Labour Government totalled £35,525,000. Tax reductions on building materials and fittings such as angle irons and bars amounted to £2,800,000 a year. Exemptions of tax on further items of building materials and on clothing amounted to £1,400,000 a year. Reductions of sales tax on advertising and printed matter, including photographic equipment, smokers' requisites, confectionery and ice cream, amounted to £3,500,000 a year. Reductions on plate and plated ware, blankets, rugs, tablecloths, curtains, passengers' baggage, &c, were worth £475,000 a year. The relief allowed during the seven years to which I have referred totalled over £35,000,000. In that same period, customs and excise duties, another form of indirect taxation, were reduced by over £6,000,000 a year. That is a record of which any party might be proud. Contrast it with the proposals now before the House. If .this is one of the Governments contributions towards putting value back into the £1, it marks a very sorry day for people of Australia. Some of the items on which sales tax is to be increased are necessaries and the increased expenditure on them will merely add to the inflationary spiral because these items must be purchased and they will be purchased at an increased cost with the result that the staggering spiral of inflation will be accelerated, not retarded. Many of the increases proposed in this bill are not in the interests of justice, equity or the national economy. Debate (on motion by Mr. Eggins) adjourned. Sitting suspended from 5.58 to 8 p.m. NATIONAL SERVICE BILL 1950. Bill presented by Mr. Holt, and read a first time. Second Reading. Mr. HOLT(Higgins - Minister for Labour and National Service and Minister for Immigration) [8.1]. - by leave - I move - That the bill be now read a second time. Before commencing my speech, I wish to draw the attention of honorable members to two corrections which should be made to the copies of the bill that are now in their hands. The Government Printer, as honorable members might imagine, has been particularly busy and the checking of the final print had to be done quickly to permit the bill to be introduced this evening as planned. In clause 44 the reference to " sub-section (2.) of section 37 " should be a reference to section 38, and in clause 59 the reference to section 27 should be a reference to section 26. The main purpose of the bill is to establish a system of national training for the Defence Force of Australia. The Prime Minister (Mr. Menzies), in one of the principal points made in the policy speech delivered by him on behalf of the present Government parties, announced our intention to introduce - universal military and physical training for periods suited to our conditions and by methods and on conditions as to call-up and numbers to be determined on the best expert advice. The general policy in relation to national service was thus placed clearly before the people, and the Government rceived a firm mandate to give effect to this policy. The grave international developments of the intervening months have made it desirable that this policy should be implemented without delay. But whilst national training is directly linked with the nation's defence, the Government's approach to the principle of national service is directed to the attainment of two objectives. The first is the contribution which can be made in this way to our defence preparedness, and the second is that we should improve the physical fitness - using that phrase in the widest sense - of our young manhood. We believe that Government measures to be taken in the field of medicine and medical and hospital benefits, which are both remedial and preventive in their purpose, will be the more valuable if they are supplemented by a system of national service which brings to our young men the advantages of a period of regular disciplined training under expert instruction. If this scheme were purely one for training persons for the defence force, the services would wish to apply rigid medical standards of fitness before entry. We do not necessarily propose to maintain those standards when determining who shall be liable for call-up under the national service scheme. The conception in which defence planning is being pursued is that there would not be time in the event of another emergency to turn completely untrained men into an effective fighting force. The Government has on other occasions stated its' intention to raise the Permanent Forces and Citizen Forces of the Navy, the Army and the Air Force by voluntary enlistment to the peace-time strengths approved for them. But in time of war, it would be necessary to mobilize forces considerably 1 anger than those maintained in time <of peace .and to -do so -very much .more rapidly than in the past. We cannot count on the breathing space .given to Australia in World War I. and World War II., when hostilities began in Europe. We have to plan to have available in the first weeks of war .a force capable of defending this country and of meeting whatever obligations the Government of the day has decided to assume. As honorable members are aware,, the Defence Act provides that all male 'inhabitants of Australia between the ages of 18 and 60 years who are British subjects are liable in time of war to serve in the Citizen Forces. The defence legislation .also contains provisions for the calling out of the Citizen Forces in time of war. If any national service trainees are, by virtue of the provisions of this bill, then in the Citizen Forces, they will, like .other members .of those forces, be .affected -by .the call-up. There is, of course, nothing novel in this. The same obligation .-applied to trainees .under the earlier training schemes. The .crux of the matter, however, is that if and when a liability for service should .arise under the defence legislation, many ,0 those required to render service with the forces would have already received some training under this national service scheme. The national service scheme will thus effect .a profound change from our present situation. In the unfortunate event of Australia .being forced to engage in hostilities, the forces recruited in accordance with the then existing law would contain at least a .substantial nucleus of persons trained in the latest methods of warfare. In short, the scheme which this bill authorizes is aimed to provide a reservoir of trained men who will be available to be recruited for service with the Defence Force in the normal way in the -event of an emergency. Naturally, in the circumstances, the bill does not change any existing provisions dealing with liability for overseas service. The law on that matter is contained in the existing defence legislation, and nothing in this bill is inconsistent with it. In -order to emphasize this fact, which I .believe -to he of some importance, I refer honorable members to the full text -of clause .28,, which is as follows.: - A person -is not .'liable to render service under this Act beyond the limits of Australia unless he has volunteered as prescribed -for service beyond those limits. Mr.Calwell. - 3But .a man -can-not serve in the Navy or the Air Force unless he volunteers for service .anywhere. Mr. HOLT;- I shall deal with that point as I proceed. There is considerable 'difference between this scheme and 'earlier training schemes authorized by 'Part XII. of the Defence Act. Honorable -members will remember that, Tinder -the Defence Act provisions, youths were liable if or service in one -form or another in 'the Junior Cadets, the -Senior Cadets m-nd the 'Citizen Forces, from the age of twelve years unifil the 'age of '26 years. Service was of a limited "character and scattered over that -period, 'but -there was rarely any continuous period of training in excess of fourteen days. The -type of training provided under these earlier schemes ds utterly unsuited to our requirements today. The essence of the present scheme is that it provides for continuous periods of service sufficiently lengthy to enable not only the necessary 'basic service training to be given, 'but also an introduction to more specialized forms of service. It applies to those who .are sufficiently mature to participate in and derive the maximum 'benefit from this 'basic and advanced "training, and, as the training will take place with existing organized units of the three services, it not only allows -of training in all of the specialized units of the services, but ;also facilitates the -overall training of the regular units of the services themselves. The scheme authorized 'by this hill has already been made known in considera'b'le detail to honorable members and the public through various governmental announcements from time to time. It is a practicable plan devised hy the Government's -expert 'advisers and "endorsed by the Defence Committee. In its preparation, the systems and experience -of national service devised and operating in the 'United Kingdom and New Zealand were heavily drawn upon. There have been reports that the proposed .system of training is not acceptable to members 01 the Opposition. I sincerely hope that this does not prove to be the case. I stress, in this connexion, that the schemes of national training now operating in the United Kingdom and New Zealand, which are similar in principle to our own, were introduced by Labour governments in those countries. Our national service scheme is> an integral part of the Government's general defence policy. The foundations of the post-war defence forces were, as this Government has already acknowledged, laid by the previous administration. Our main quarrel with what that administration did is that it was not enough and appeared to rely much too heavily upon the scientists, a few specialists and small permanent service cadres. While feeling that a good deal more was necessary, we have had to reconcile the demands of defence requirements with our other main objectives of production and development. As the Prime Minister has said, we have to do simultaneously three things. We must attend to our defence requirements, expand our economy and increase our productivity. Having weighed all these things, we have decided that this national service scheme is an essential element in the defence programme. Every scheme such as this national service scheme must have its beginnings. We have to provide camps and training facilities. We need to train instructors, and in some cases to recruit them. We do not wish to add to the already extremely heavy pressures on the building industry by rushing up additional camp accommodation in one short period. We do not propose to take in for training young men for whom there are not adequate instructors and training facilities. Therefore, our plans provide for a progressive building up of the numbers to be trained under the scheme, and, as we can provide the extra facilities, So progressively will the total numbers taken under the national service scheme in any one year increase. This also necessarily means that, for the time being, we must limit the number of centres, particularly in the country areas at which training can be given and from which, therefore, young men can be called up for training. It has been claimed by critics of the scheme that industry, being already short of man-power, will be further prejudiced by the withdrawal of young men from useful employment. This again is one aspect of the capacity of this country to do, concurrently, the three great tasks I have already mentioned. But let us examine this argument. We will not, as I shall explain, be able to call up all eighteen-year-olds. We shall deduct first all those exempt from registration and service under the provisions of the bill. We shall deduct those who live too far away from training centres to be trained. We shall deduct those who are unfit for training. In the early stages, we shall probably deduct a higher percentage on this ground of medical unfitness than later on, because, as I have said, we have not immediately the facilities on the scale to enable training for the maximum potential available to commence immediately. If we deduct the numbers which fall into the three classes I have mentioned, we are reduced to. a total availability of something under 30,000. Now, the period of service is roughly six months - and it will not be a continuous six months' period, except in the case of the Air Force - so that this means that we would be, in effect, withdrawing as a maximum the equivalent of 15,000 young men for a period of one year. In fact, in the first few years of the scheme, the numbers will be less because of the operation of the system of deferment, to which I refer. But let us assume the figure is 15,000. Now, the total work force is at the moment nearly 3,250,000 persons, so that if we deduct the 15,000, it means a total withdrawal from the work force of less than half of 1 per cent. We have looked at the incidence of this withdrawal on particular industries. As honorable members might imagine, it will not be uniform, but only in a few cases does the withdrawal from any industry exceed 1 per cent., and then only .slightly. The Government has weighed this loss of possible production against defence requirements, and has concluded that it is something which has to be borne. Let me put the matter in another way. The loss of production for one day's public holiday throughout Australia is greater than will be the loss of production flowing from the temporary withdrawal from industry of trainees under the national service scheme. Let us be realistic about these matters. In giving this illustration, I have spoken purely in quantitative terms. In qualitative terms we would have to weigh the production of skilled tradesmen and older and experienced workers in the scales against the withdrawal from production of inexperienced young men, most of whom will only have been in industry for a short time. The Government has also looked at the question of exempting persons in particular industries from service. Again, in its weighing of defence requirements against our industrial and economic needs, the Government has decided in principle against any such general deferment. The loss in any particular section of industry is relatively small, and we feel that there are strong reasons of principle why the scheme should be universal so far as is practicable in its application. There is, I confess, also a practical problem. Once we give exemptions on some industrial or. occupational ground, where do we stop? Under the conditions in which we find ourselves at the moment, it is not easy to determine degrees of essentiality amongst industries and occupations. That problem becomes much simpler under the overriding compulsion of war. "We do, however, meet the industrial need in two particular directions. First, we believe that youths who are apprenticed or are at educational establishments should not have their training interrupted where it would seriously dislocate their studies for a trade or profession. The Government believes that it is in the national interests, in the interest of industry, of the young men themselves, and in the ultimate interests of the services that those of our young men, who are equipping themselves for special tasks in the community, should complete their training as quickly as possible. Persons who fall into these categories will not be exempted from service. They will, if they wish, be deferred until such time as their educational and trade training has been completed. ; Mr. Calwell.- That might necessitate a period of seven years I Mr. HOLT.- The bill indicates the limits proposed. We intend to adjust, as far as possible, the call-up of individuals, and I am thinking particularly of those engaged in industries having seasonal fluctuations, in such a way that the call-ups will coincide with seasonal slacks and not occur at the peak of activities. With this introduction to the main objectives of the scheme, and its underlying principles, I shall now discuss particular provisions of the bill in more detail. First, I shall say something about the general administration of the scheme. This scheme involves registration of persons liable to register under the bill. It provides for their interview and examination as to fitness for service. Deferments and exemptions can be made on various grounds. Machinery provisions are included for the actual call-up for service, and allocation to the different services. Specific provision is made for protection of civil reinstatement rights. The intention is that the Department of Labour and National Service shall handle this administrative work. The regional directors of the Employment Division of the Department of Labour and National Service will be appointed registrars under the measure and their offices will be the national service registration offices. Interviewing and such action as call-up and allocation to the services will be handled by the district employment officers of' the Commonwealth Employment Service under and, of course, in accordance with policy directions from myself as Minister. General supervision and oversight will be exercised by the permanent head of the department and regional directors. The responsibilities of the individual services attach when the trainee reports to commence his service in accordance with the notice to do so that will come to him from the Department of Labour and National Service. There will naturally be the closest liaison between the civil department and the services in ensuring the smooth intake of trainees into the services and that the services obtain trainees of the categories required. I should add that these administrative arrangements accord with the practice in the United Kingdom and New Zealand. As to the liability for registration, it is proposed that all male British subjects ordinarily resident in Australia of the age of eighteen years will be required to register under the act when called upon by notice published in the Gazette to do so. The only exceptions will be certain officials in tie service of international bodies, diplomatic personnel, men already serving in the permanent forces, and aboriginal natives of Australia. In the case of aboriginal natives, the services will consider applications from volunteers seeking to do national service. I think that upon reflection honorable members will agree that that is the best way of dealing with the problem presented by the aborigines. We want them to be regarded as Australian citizens, but there are various practical difficulties which will suggest themselves to honorable members, and the Government considers that the best way to overcome the problem is to consider applications by aborigines for registration, as trainees under the national training scheme. Provision is made for youths of seventeen to register early if they can show good reason for wishing to do so. This is designed to meet the needs of those who, for reasons associated with their careers, may wish, for example, to get their principal period of service over before commencing their studies. For example, a youth who is leaving school and is about to commence a university course, may find it more convenient to do his training in his seventeenth year than to do it in his eighteenth year. Provision has been made for the extension of the obligations under the bill to persons who are not British subjects. The Government feels strongly that migrants coming to this country with the intention of making it their home should, equally with Australians and other British subjects in Australia, make their contribution to the country's defence preparations and be liable for training. We consider that training for national service alongside Australians of the same age would play an important part in the assimilation of the migrants. But there can be no cut-and-dried approach to this matter. International law has an important bearing on it. It is not customary, as most honorable members are aware, for the nationals of one country to be subjected to compulsory military service in the forces of another country. In some cases, those who join the forces of another country are liable to lose their nationality. That is a serious difficulty. On the other hand, among the migrants to this country there are many stateless aliens concerning whom these difficulties do not arise. But I reaffirm that we desire to see aliens who have migrated to this country joined in this scheme. We are seeking the co-operation, to this end, of other countries. For example, we are seeking the co-operation of those countries with which we are negotiating immigration agreements. To the extent that we can do so within the rules of international law and the practices which govern the comity of nations, we propose to make these new residents of this country liable for national service. The requisite registration forms will be available at all post offices as well as at district employment offices, and as each registration form is received in the national service registration office a certificate of registration will be issued to the registrant. The bill, it will be noticed, provides that each registrant must notify changes of address to the registrar until such time as he actually commences his national service. The bill provides for medical examination by a medical board consisting of two medical practitioners. The standards of fitness will be as laid down by the services. This examination will include a radiological examination of the chest. I have already referred to the fact that we propose to adjust standards of fitness as we go along, so as to bring in persons who might not be fit for actual service with the defence force in time of emergency. I am pleased to be able to say that the State authorities are co-operating with us in relation to radiological examinations. This has considerable value in connexion with the general campaign which is being waged against tuberculosis. We have already been assured of the assistance and co-operation of the British Medical Association in arranging for doctors to- undertake medical examinations,, and. I am confident that the medical profession -reilly when individual doctors are approached for assistance,, be ready and willing: to make its: contribution to the successful operation, of the scheme. The medical examinations will normally be- conducted in local training depots-, formerly known as drill halls, and will follow upon the interview of the registrant with an officer of the Commonwealth Employment Service. At this interview, questions of deferment, preferences in- relation to the service, and suitability for allocation to particular arms of the services will be determined. "We propose that these interviews and examinations shall take place in the evenings of week days. This: should obviate avoidable interruption of industry, enable the scheme to be administered with a maximum of economy of staffing, and provide the most favorable conditions for the full co-operation of medical, practitioners. The time occupied by registrants in attending for these interviews and examinations is, under the bill, to be treated as an absence permitted by the employer without deductions or loss of pay, but, as they will normally take place in the evenings, there will not be many cases where employers will be required to bear the cost of such absence. Opposition members interjecting, Mr.Calwell. - The doctors will be paid for attending, but the youths will not !' Mr. HOI/T.- I can understand the mirth of honorable members opposite. However, as the provisions of the bill are explained honorable gentlemen opposite will realize that employers will be called upon to shoulder substantial responsibilities under this measure. In addition, there are, of course, many workers engaged on shift work, and when such persons attend for interview at night their employers will be called upon to make up their pay. Indeed, the- liabilities of employers in respect of the reinstatement provisions of the measure will fall much more heavily upon them than the obligations imposed by the requirement to pay for time lost during those interviews. Concerning the provisions for the call-up, exemption and deferment, the position is that every registrant who complies with the standard's- of fitness- laid down will be liable to> be called up. for service unless he is exempt, from service. The exempt classes, apart- from persons subject to. prescribed physical or mental disabilities, are theological students, ministers of religion, members of religious orders and conscientious- objectors. The Government has- given careful consideration to the position of conscientious objectors. The Defence Act, Part IV., provides that persons whose conscientious beliefs do not allow them to bear arms shall be liable in time of -war to be enlisted for duties of a non-combatant nature. During the Vast war, however, » the act was superseded by the National Security ('Conscientious Objectors) Regulations, which provided that if a person was found by a court to hold conscientious beliefs which did not permit him to engage in any form of naval, military or air force service, he should be totally exempt, but that if his objection was only to- combatant duties, he should be enrolled for non-combatant service. The Government believes that conscientious beliefs should be respected. It has> therefore, decided to adhere to the principle established by the National Security Regulations and to admit conscientious objection as a ground of exemption from service under the act. It will be necessary for the applicant for exemption to establish the ground of conscientious objection to the satisfaction of a court. Courts constituted by a police, stipendiary or special magistrate will have jurisdiction under the bill to determine these applications. Those who do not establish objection to all forms of service will be registered for1 non-combatant service. I have already said that it is a basic principle of the scheme that training should- begin at the age of eighteen years, but there will be exceptions to this principle - cases in which call-up will' be deferred while the ground of deferment continues. In that class will be apprentices and students whose course of study a*, a university,, technical school or other approved educational establishment would be seriously dislocated if they were required to do their national service at the same time as others of their age. These will be- granted deferment until they have completed their courses. Another class of people who will be deferred will consist of those who reside at places too remote from training centres to be able conveniently to attend for training after the first and major period of continous training. The Air Force would probably prefer trainees living in some proximity to air force stations, while in the case of the Navy, it follows that trainees will be sought who can attend at naval depots. All the services will encourage national service trainees, after their training under that scheme has concluded, to continue to be associated with their units and undertake additional training as do other young men in the Citizen Forces. The services also hope that the later association of national service trainees with the units will lead some of them to enlist in the Permanent Forces. In the case of the Army, in which service the majority of the trainees will serve, the present intention is that the training will include in the second, third and fourth years a number of evening and week-end parades and bivouacs. This raises the same difficulty as was experienced under the training provisions of the Defence Act in that it would be some burden to require persons who live far from centres where there are training depots to attend such periodic parades. The old provisions exempted - persons whose bona fide residence is notwithin a distance of 5 miles, reckoned by the nearest practicable route from the nearest place appointed for training. The Government is still examining the question whether this definition meets modern conditions. I believe that most of us would consider that it does not. Persons who live in remote places, however defined, will not be exempted from service, but their call-up will be deferred so that if a training centre is established at a future time in an area where none at present exists, then all registrants in the area may be called up. There is a qualification which, of course, has general effect, which is that no person can be called up to commence service under the provisions of the bill if he has reached the age of 26 years. Certain students doing long courses may constitute an exception to this rule. It is necessary to have an upper age limit after which liability for service shall cease, as otherwise a man could be under the liability all his life. In any case, it is desired to maintain some similarity in the age groups of persons who will be serving together on national service. Of course, if a person changes his place of residence from a place where no training facilities exist to a place where they do, his deferment will automatically terminate. The circumstances in which students, apprentices and persons living in remote areas will be deferred, will be laid down by ministerial decision. Provision is made whereby individual applicants who claim that service under the scheme would impose exceptional hardship on the applicant, his parents or dependants may apply to a court, which may grant deferment for any period up to twelve months, at the expiration of which time the applicant has the opportunity to apply again. It will have been noticed in my opening remarks that it is not proposed as a matter of general principle to grant exemption or deferment from service on the ground of occupation or employment in a particular industry. At the age of eighteen years the trainees will have had limited industrial experience, and their absence from work during training at this age, followed by short absences in subsequent years, is not expected to involve any serious loss of man-power to industry. It is possible, however, that an exception will be made to the general rule in the case of the coal-mining industry, which, because of our great need, occupies a position of unique importance in the Australian economy. Men can hardly be spared from it at present, and it is un- . likely that recruits would be sought from that industry in time of war. Therefore, at least in the early stages of the scheme, youths engaged in the coal-mining industry will be granted deferment of their liability for service. I now turn to the nature of the service to be rendered under the bill. It will be with the Citizen Naval Forces, the Citizen Military Forces, or the Citizen Air Force. Over the period of five years during which a trainee will be in the Citizen Forces, he will undergo 176 days' training. Having completed that training there will be no further liability for training or service apart from that which, as I have explained, would attach, under the defence legislation, to all members of the Citizen Forces should war break out before the five years' period has expired. The present intentions are that, in the case of the Navy, there will be a period of 124 days' continuous training in the first year, and thirteen days in each of the succeeding second, third, fourth and fifth years. In the case of the Army there will be 98 days' continuous training in the first year, and in the second, third, and. fourth years there will be a fourteen days' camp and twelve days devoted to evening and week-end parades and bivouacs. In the Air Force the training period of 176 days will be served in one continuous period following call-up. It is conceivable that in the light of experience the services will find it desirable to recommend some adjustments of their training programmes, and this will be possible within the framework of the bill subject to the total training period not exceeding 176 days over five years. It will be noted that in the case of the Air Force, the whole of the training, and in the case of the other two services a substantial part of it, will be concluded in one straight stretch, and usually in the trainee's eighteenth year and in his first year of training. These arrangements will not only meet the needs of the services, but will also cause the minimum disruption of civil employment. There are few workers of the age of eighteen years who cannot be spared from their employment for the period of training proposed for the first year, and the short absences which will be necessary in the years following should give rise to little more inconvenience than is occasioned by annual recreation leave now granted to employees under the terms of industrial awards. It might be asked why the periods of training differ in the various services. The fact is that the type of training to be given differs in each of the services and, furthermore, it has been necessary to take into account our capacity adequately to administer, house and train the trainees. Moreover, the training, as I have pre- viously said, has to be integrated with the training of the regular forces of the various services. In the case of the Navy, the initial training period will be divided into two paris - ashore and afloat. The sea-going training will follow immediately on the training in shore establishments, and will be carried out in vessels commissioned specially for the purpose. These vessels will also be used to afford seagoing training to the existing naval reserve force. In the case of the Army, the first period of 98 days, or fourteen weeks, will comprise basic and specialized training. Training in each of the succeeding second, third, and fourth years will be with Citizen Military Force units. In the case of the Air Force, training will be on air force stations and will include class-room instruction and working with qualified permanent personnel. In addition, a selected but limited number ' of trainees will be given elementary flying training. The pay and the terms and conditions of service of national service trainees will, in general, be regulated by the service acts applicable to the particular arm of the Citizen Forces in which they are serving as is the case with volunteer members of the Citizen Forces. I repeat, however, that this bill does not deal with liability for service in time of war. As honorable members are aware, however, the present arrangements of the Royal Australian Navy and the Royal Australian Air Force do not provide for enlistment of persons who are not liable to serve overseas. That being the case, it would be senseless to train national service personnel in these services if they were not going to be in a position in which, in time of war, they could be employed in them. Therefore, the bill provides that no registrant should be allotted to and called up for service with the Navy or Air Force unless he has indicated in advance that he is willing to serve beyond the limits of Australia. A formal document in which a registrant volunteers in this way and which is countersigned by a parent, guardian, magistrate or justice of the peace, will have to be forthcoming from a registrant before he will be allotted to training with those services. This will apply notwithstanding that he may, in his registration form, have indicated a preference for service with, one or other of those services. It will also be open to a registrant who prefers service with the Army to complete a similar instrument. It may be that at some future time the Navy and the Air Force may decide it enlist persons for service in Australia only, and the bill, therefore, makes provision to enable allocation of registrants to those forces, even if they do not volunteer for overseas service, if and when such a decision is so taken. I should also point out that the intention is to give effect, as far as possible, to the preference for particular services expressed by registrants, but this may not, of course, always be practicable. There remains an important part of the bill that I have not yet discussed which is the part that deals with protection in relation to civil employment. It is here that the bill calls upon employers to make some contribution to the smooth working of the scheme. It is of great importance that a young man should not feel that he will be prejudiced or penalized in his employment by reason of his liability for service or his absence while serving under the scheme. Any such conduct on the part of an employer will constitute an offence. No reflection on the Australian employer should be read into that statement. The Government believes that this whole plan has the enthusiastic support of individual employers and their organizations. Already it is evident that many employers propose to give practical support in the form of making up any difference between the service pay of trainees and their civilian pay. This, I might add, is also the policy of the Government. Subject to some qualifications which will be mentioned, an employee will be entitled to reinstatement in his employment upon return from a period of national service. He will be protected from dismissal, except for reasonable cause, for a period after his reinstatement equivalent to the period that he has just served. The qualifications to these rights are that the employee must have been employed by the employer for at least 30 days immediately prior to his going into camp, and that he must present himself for work without delay after coming out of camp. The reasons for attaching those conditions to the right of reinstatement should be obvious. The bill further provides that a reinstated employee, provided that he stays in the job at least as long as the period of his absence, will have the period of his absence counted as time worked in his employment for the purposes of computing his entitlement to annual leave, sick leave and, where applicable, long service leave and superannuation. The bill also requires an employer to pay his employee for any time which he loses from work while he is attending, under instructions, for interview and examination as to fitness. These provisions in the bill are modelled on those that operated so smoothly in relation to service during the last war. I think that I have now covered the principal provisions of the bill. It is proposed that as soon as the measure becomes law all registrable British subjects whose eighteenth birthday falls between the 1st November, 1950, and the 31st March, 1951, will be called upon to register on a date to be notified, or within fourteen days thereafter. As to the numbers who will be trained under the scheme, all I need say is that, as has already been announced, the plans for the first twelve months are to train at least 13,500, with a progressive increase in the following years. This 13,500 will be divided among the services as follows: - Royal Australian Navy - 500 to be called up in two groups of 250 - the first to commence training in March, 1951. Royal Australian Air Force - 3,000 in four groups of 750 - the first to commence training in April, 1951. Army - 10,000 in three groups, the first 3,300 to commence in May, 1951. As honorable members will see from these dates it is imperative that this legislation be passed through the Parliament in the course of the current session, because with the necessity for registration, medical examination and interview, if the scheme is to commence on the dates that I have already mentioned we shall have to press forward with the task without any delay. It is preferable that we should go ahead as soon as the bill becomes law, which I hope will happen during the course of this session. Deferments during the first year of the scheme on the grounds mentioned, already are expected to be. heavy, but as these deferments expire, for example as students complete their courses and apprentices become tradesmen, the numbers available for training will rise. The numbers available will also obviously be related to the standards of fitness fixed from time to time and the capacity of the services to extend training facilities to smaller centres in the country. One of the things that has made the planning of the scheme difficult has been the absence of statistical and other data to answer such questions as the distribution geographically of the 18-year-old population and the numbers of 18-year-olds who are students or apprentices and therefore likely to apply for deferment. This has made it impossible to predict with any certainty what numbers will be available for training in the first year on the basis of the present plans. Honorable members can, however, be assured that it is the Government's intention that all shall be trained who prove to be available and the present service training programmes will have to be adjusted to cope with any such situation. [Extension of time granted.] The whole of the plan will be kept under constant review and such adjustments made as circumstances show to be necessary. The commencing rate of training in the first year of the scheme will be somewhat lower than the Government hoped would be possible, but we had the choice of getting the scheme launched with the least possible delay and with the camp and training facilities and instructors that could ' be mustered in the shortest possible time, or of postponing the commencement until such time as these facilities could be extended to permit of the training of greater numbers initially. I feel that honorable members will support the Government's decision to take the first of these choices. This could mean that the training of some registrants in the first year of the scheme might be deferred, perhaps for some months. We shall not have a clear picture of the working out of the scheme until we are well, advanced with the calling up of the registrants in the first year. The Government has pushed ahead with the implementation of this scheme. The commencing date has been advanced considerably from the first estimates made by our service chiefs. We shall be doing what we can in the future to make the scheme as widespread as possible in its operation. There will necessarily be some consequential amendments to be made in the existing defence legislation when this bill comes into effect, and my colleague, the Minister for Defence, will bring before the House these other measures. I commend the bill to honorable members, and I invite the co-operation of the House in effecting a speedy passage for the measure. To keep to the scheduled target date for making the first trainees available to the services, very considerable administrative work must still be done, and the first registrations should be completed at a very early date. Naturally, some of this work cannot be carried out until this measure becomes law. We believe that the bill has the support of the Australian people. We believe that it will make for greater peace-time preparedness for defence than we have previously known in this country. The troubled times through which we are passing make the adoption of a workable scheme of national training imperative. For these reasons, the bill should command the close consideration and full support of every member of the Parliament. Debate (on motion by Mr. Chifley) adjourned. SOCIAL SERVICES CONSOLIDATION BILL (No. 2) 1950. Bill received from the Senate and (on motion by Mr. Holt) read a first time. Second Reading. Mr. HOLT(Higgins - Minister for Labour and National Service and Minister for Immigration) [8.50]. - by leave - I move - That the hill be now read a second time. It is perhaps appropriate that having presented to the Parliament on behalf of the Government an instalment of national security, I should follow that with an instalment of social security, a matter which also forms part of the Government's programme. The purpose of this bill is to amend the Social Services Consolidation Act to give effect to the Government's decision, as announced in the budget speech, to increase the pensions paid to age, invalid and widow pensioners and to make certain other concessions to those pensioners and to other recipients of social services benefits. As announced by the Treasurer, the increase provided by the bill to age and invalid pensioners is 7s. 6d. a week, which will raise the maximum pension from 42s. 6d. to 50s. a week. I draw the attention of honorable members to the fact that this is the largest increase ever granted to these pensioners since old-age pensions were introduced by the Deakin Government in 1909. The increase of 7s. 6d. a week in the maximum pension will mean an automatic rise of that amount in the permissible limit of pension plus other income which a pensioner may have under the means test. A single pensioner will be able to have a total income of £4 a week, inclusive of pension, instead of £3 12s. 6d. as at present. A married couple, both in receipt of pension, will be able to have between them a total income of £8 a week inclusive of pensions, instead of £7 5s. as at present. This will benefit persons retired on superannuation who are also receiving age pensions. They will receive the full benefit of the increase in the age pension rate, their total incomes being increased by 7s. 6d. a week for a single person and 15s. a week for married couples who are both receiving the pension. The bill contains a special concession for blind pensioners which I am sure honorable members will welcome. Not only will they receive the increase of 7s. 6d. a week in their pensions but they will also benefit by a substantial increase in permissible income. For many years past blind pensioners have been permitted to have an income, including earnings, considerably in excess of the income permitted to other pensioners. The reason is to enable the blind to engage in occupations for which they are specially trained, which not only gives them a greater interest and zest in life but adds to the productive efforts of the community. The rise in wage levels, however, which has occurred during recent years has not been accompanied by increases in the permissible income for the blind pensioners. The Government has decided to rectify this, and the bill provides that the amount of income, including earnings, which a blind pensioner may have without reduction of pension shall be increased from £5 17s. 6d. a week to £8 a week. This will mean that a blind pensioner will be able to have an income of £8 a week in addition to the pension of £2 10s., a total of £10 10s. a week. A married couple, both blind, will be able to have an income of £8 a week between them and each receive the full pension of £2 10s., making a total of £13 a week between them. These liberalizations will benefit approximately 3,200 blind persons already receiving the invalid pension and will make it possible for quite a number of blind persons, at present excluded by the income test, to qualify for pensions for the first time. Honorable members may remember that in October, 1948, a new principle was introduced into social services legislation applying to those cases where the pensioner received a war pension in addition to his civil pension. Certain ceiling limits were imposed on the total amount which a pensioner could receive by way of war pension plus age or invalid pension. The Government proposes to make an appropriate increase in those limits to enable pensioners to derive some benefit from the increase in war or civil pension for which provision is now being made. The bill accordingly provides for a rise in the ceiling limits on these dual pensions from £3 2s. 6d. to £3 10s. in the case of a single person, and from £6 2s. a week to £6 10s. in the case of a married couple who are both receiving a civil pension. Where only one spouse of a married couple is receiving a civil pension the ceiling limit will be raised from £5 to £5 7s. 6d. a week. Age and invalid pensioners will benefit from another concession contained in the bill which relates to the treatment of life insurance policies under the property test. At the present time up to £200 of the surrender value of life insurance policies is disregarded in applying the property means test. This special exemption is raised to £500 by the bill. It applies, of course, in addition to the general property exemption of £100 for a single person or £200 for a married couple. It would be possible for a pensioner who now receives a reduced pension on account of life insurance policies to benefit by as much as 23s. a week as a result of this concession. Therefore, it is a substantial concession. The bill also provides for increases in the pensions payable to civilian widows. The increase for class A widows, that is, widows with one or more children under sixteen years, is 7s. 6d. a week, which will raise the class A pension from 47s. 6d. to 55s. a week. The increase for other classes of widow pensioners is 5s. a week. The great majority of these comprise pensioners in class B who are widows over 50 years of age with no children under sixteen years. The pension for such widows will be raised from 37s. to 42s. a week. This increase applies also to women known as class D widows who may be granted pensions during the imprisonment of their husbands for more than six months. Class C pensions, which are payable for not more than six months to widows who are under 50 years of age and have no children under sixteen years, will be raised by 5s. from 42s. 6d. to 47s. 6d. a week. The increases to which I have referred will be paid also to other women for whom civilian widows' pensions are provided, such as deserted wives, divorcees and women whose husbands are in a hospital for the insane. The increases to widow pensioners will automatically raise the limits of pension plus other income which a widow may have under the means test. The permissible income for these pensioners is 30s. a week, which is the same as that allowed in respect of age and invalid pensioners. Class A widows will thus be able to have a total income of £4 5s. a week, inclusive of pension, instead of £3 17s. 6d., as at present. Child endowment is payable in addition to the pension and is not included in the permissible income. Widow pensioners in classes B and D will be able to have a total income of £3 12s. a week, inclusive of pension, instead of £3 7s. as at present. There is no specific permissible income for class C widows, the economic qualifications for the pension being that they are in necessitous circumstances after the death of the husband. The special ceiling limits on dual pensions, comprising war pension plus civil pension, to which I have referred in connexion with age and invalid pensioners, apply also to civilian widow pensioners. These ceiling limits do not concern what are known as " war widows ", who receive war pensions in respect of the death of their husbands. Such widows are not eligible under the law to receive, in addition, a civilian widow's pension. The ceiling limits, however, do affect other widows who are in receipt of a civilian widow's pension. The bill provides for these limits to be increased from £3 12s. 6d. to £4 a week in the case of class A widows and from £3 2s. 6d. to £3 10s. a week in the cases of widows in the other classes. The liberalization of the property means test in respect of the surrender value of life assurance policies, which is to be made for age and invalid pensioners, will apply also to the means test for widow pensioners. As I have already mentioned, the special exemption of £200 of the surrender value of such policies will be raised to £500. It would be possible for a widow pensioner, who is receiving a reduced pension because of the surrender value of life assurance policies, to benefit by as much as 16s. a week as a result of this concession. I come now to other concessions provided for in the bill. These relate chiefly to persons who are entitled to unemployment or sickness benefits. It is with considerable satisfaction that I inform honorable members that the concessions include the exemption of war pension from " income " in applying the means test for these benefits. Many honorable members will recall that the Liberal and Australian Country parties, which now comprise the Government parties, when in Opposition, fought hard for recognition of this most desirable principle at the time when the Unemployment and Sickness Benefits Bill was before the Parliament in 1944 and on a number of subsequent occasions when social services amending bills were being debated. The Labour Government was not prepared to accept that principle. I am sure that not only ex-servicemen's organizations but also the public generally will welcome this decision. The concession will mean that many war pensioners who are otherwise qualified will become eligible for unemployment or sickness benefits for the first time. The means test for these benefits allows 80s. a week of other income, in which, at present, war pensions are included. Any income in excess of this amount necessitates a corresponding reduction in the rate of benefit. "When this bill becomes law, war pensioners who are eligible to receive unemployment or sickness benefits will be able to have 20s. a week income apart from their war pensions and will still be eligible to receive the maximum rate of benefit. Another concession that is now provided for in respect of persons who are entitled to sickness benefit is the extension of the time limit for the lodgment of claims from six weeks after the date of incapacity to thirteen weeks after that date. This extended period should give ample time for persons who, for one reason or another, delay the lodgment of their claims to receive the benefit without any loss of arrears, provided that the claim is lodged within three months after the date of incapacity. If, however, owing to the effects of the incapacity or to some other sufficient cause, the claimant is unable to lodge his claim within the extended period of three months, the Director-General of Social Services, under discretionary powers that are being retained in the act, may approve of payment of arrears of the benefit as from the normal date, or from such later date as he considers to be reasonable in the circumstances. A further concession provided for in the bill in respect of persons who are eligible for sickness benefit is a provision under which a claim for workers' compensation that is made within thirteen weeks after the occurrence of the claimant's incapacity will be treated as a claim for sickness benefit in determining the date from which that benefit will be payable. This will safeguard the rights of workers who defer lodging their claims for sickness benefit while awaiting the determination of their claims for workers' compensation. In the past a number of claims for sickness benefit have been rejected because by the time the claim for workers' compensation has been decided the period during which an application for sickness benefit should be lodged has expired. It is considered unfair that workers who sustain injuries which cause an interruption of their employment, and who fail in their claims for compensation, should also be deprived of sickness benefit merely because of the late lodgment of their claims in such circumstances. There is, of course, no reason why such a person should defer his claim for sickness benefit. He should not do so. But departmental experience shows that some workers, believing themselves entitled to workers' compensation, fail to claim sickness benefit, only to find subsequently that they are ineligible for workers' compensation, lt is then too late for them to claim sickness benefit. The new provision will remedy this situation. The bill also contains a concession relating to child endowment. This will enable endowment to be paid in respect of the children of members of the naval, military or air forces of the United Kingdom who are serving with the Australian forces and who have brought their families with them to remain only during their term of temporary service. Under the present law, endowment is not payable in respect of these children for the first twelve months of their residence in Australia, notwithstanding that the eligibility of the parents for payment of family allowance from the United Kingdom Government ceases on their departure from the home country. As these personnel are liable to pay Commonwealth taxes from the time of commencement of their service with the Australian forces, it is only right that the benefit of child endowment should be available to them. The bill corrects this anomaly, and as soon as it becomes law endowment will be payable in respect of the children concerned from the time of their arrival in Australia. Honorable members will note that the bill contains provisions for the discontinuance of payment of an age or invalid pension or a widow's pension during the period in respect of which the pensioner receives an allowance under section 9 of the Tuberculosis Act 1948. The reason for this is that the allowances granted under that act to sufferers from tuberculosis are payable in substitution for the pension and at rates which are considerably higher than pension rates. The bill contains a similar provision relating to persons who are in receipt of unemployment, sickness or special benefits and who are granted tuberculosis allowances under the new scheme. My colleague, the Minister for Health (Sir Earle Page), has already explained to the House the generous scheme of allowances to sufferers from tuberculosis which came into operation on the 13th July, 1950. The maximum allowance for a single person is £3 12s 6d. a week and for a married sufferer £6 103. a week, plus 9s. for each dependent child under sixteen years. Obviously, it is not intended to pay pensions in addition to these allowances. Tinder the scheme that was in force prior to the 13th July, 1950, the allowances were paid to sufferers, thus supplementing their pensions. These allowances were at much lower rates. For example, the allowance was 10s. a week for a single person and 25s. for a married person, plus 5s. for each dependent child under sixteen years. The Tuberculosis Act is administered by the Department of Health but the grant and payments of the allowances under the new scheme are made by the Department of Social Services. The increased rates of pensions provided for in the bill will be paid on the first pension pay-day occurring after the date on which the legislation is passed and receives the Royal Assent. The increased payments, however, will have retrospective effect to the first pension pay-day in November. This will mean that the increased payments to age and invalid pensioners will commence with and include the fortnightly instalment due on the 2nd November, 1950, and the increased payments to widow pensioners will commence with and include the fortnightly instalment due on the 7th November, 1950. So far as is practicable, all pensioners will receive the arrears of the increase with their first payments at the new rate. If, however, the time between the date of the passing of the legislation and the next pension pay-day is very short, that may not be possible in all instances. Any pensioners who do not receive the arrears on the first pay-day after the legislation is passed will receive them in the shortest possible time after that date. It is expected that approximately 416,000 age and invalid pensioners will benefit from the increase of 7s. 6d. a week provided for in the bill. This is estimated to cost £8,250,000 for a full year, and £5,500,000 for the remainder of the current financial year. Approximately 17,800 class A widows will receive the increase of 7s. 6d. a week in their pensions, whilst 25,000 widows in the other classes will receive an increase of 5s. a week. The estimated cost of the increases of widows' pensions is £700,000 for a full year, and £500,000 for the remainder of this financial year. The other concessions provided for in the bill are estimated to cost £75,000 for a full year. This will bring the total cost of the increases and concessions to £9,000,000 for a full year, and. to approximately £6,000,000 in the current financial year. The expenditure on age and invalid pensions for the year 1949-50 was £44,557,000. As a result of the increases and liberalizations provided in the bill and the normal increase of the number of pensioners, it i3 estimated that the expenditure on these pensions for the year 1950-51 will reach £51,500,000, whilst the liability for a full year will rise to £54,250,000. The expenditure on widows' pensions for 1949-50 was £4,420,000. The estimated expenditure on these pensions for 1950-51, including the cost of the proposed increases, is £5,000,000, and the liability for a full year will become £5,200,000. The total expenditure on social services provided under the Social Services Consolidation Act, excluding health benefits, for the year 1949-50 was £85,294,000. The estimated expenditure on these services, including that arising out of the increases and liberalizations provided in the bill for the year 1950-51, is £108,000,000. Many honorable members will recall that the total Commonwealth budget did not pass the £100,000,000 mark until the year immediately preceding the outbreak of the recent war; and that seemed to be a phenomenal figure at that time. I repeat that the Government's provision for social services alone will amount to £108,000,000 during the current financial year. Taking the cost of the increases into account for a full year, the annual liability for social services under the Social Services 'Consolidation Act will rise to £111,000,000. Finally, I direct the attention of honorable members to the fact that the extension of endowment to the first child at a cost of £15,000,000 per annum, together with the increases and concessions provided for in this bill which will cost a further £9,000,000 per annum, means that the Government within twelve months of its taking office has increased and liberalized social services benefits by an amount of £24,000,000 per annum. This, I submit, is the clearest possible evidence of the determination of the Government to pursue a social .services policy based on social justice and the capacity of the community to provide an equitable spread of social benefits. I commend this measure to honorable members and express the hope that it will be given a speedy passage. Debate (on motion by Mr. Chifley) adjourned. SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1950. Second Beading. Debate resumed (vide page 2723). Mr.EGGINS (Lyne) [9.14].- I support the measure, the object of which is to implement an important part of the budget. Members of the Opposition who addressed themselves to the bill this afternoon devoted practically the whole of their time to a discussion of its side issues and ignored its primary purpose which is to encourage an increase of production as a means of curbing inflation. The Government, although it has been in office for only eleven months, has accomplished a great deal, and I believe that the Parliament and the people generally will regard its achievements during that time as outstanding. It has been obliged to change the outlook of the administration from a policy of socialization to that of encouraging private enterprise, and its achievements in that respect have been marked with considerable success. A number of the promises that were made by the present Prime Minister (Mr. Menzies) and the Treasurer (Mr. Fadden) in their policy speeches during the last general election campaign have been fulfilled. Opposition members, although they endeavour to convey the impression that the Government has failed to honour its pre-election promises, are unable to produce evidence to refute our claim that the Government's achievements in that respect have been noteworthy. I shall briefly describe them. The Government has abolished the rationing of petrol, butter and tea, and has provided for increased expenditure on roads, for improved postal and telephone facilities involving considerable expenditure, for additional social services, for increases of age, invalid, widows' and war pensions, and for health benefits. The Government has thereby fulfilled the promises that were made by members of the Liberal party and of the Australian Country party during the last general election campaign. The present Prime Minister and the Treasurer also promised the electors that they would review the incidence of taxation, and grant relief, wherever possible, to taxpayers, so that encouragement might be given to the people generally to increase production. But honorable members should not overlook the fact that during the last general election campaign no one could foresee that a few months later, Australia would send its sailors, soldiers and airmen abroad to join with the troops of other members of the United Nations in defending the cause of freedom. Mr. DEPUTY SPEAKER.- Order ! The honorable member may not discuss general taxation policy when he is debating this bill. He must confine his remarks to sales tax. Mr. EGGINS.- I am endeavouring to relate this bill to the general responsibilities of the Government in respect of taxation. The proceeds from the sales tax make an important contribution to general revenue, and I am reminding the House that the present Government, when it promised the people' during the last general election campaign that taxation would be reviewed, could not foresee the developments that have since occurred in the international situation. The Treasurer has been obliged to make provision in the budget to meet them. In other words, the Government must raise additional revenue to meet its increased commitments for defence. I shall now examine the fundamental principles of this bill. Opposition members have attempted to emphasize the minor or secondary aspects of it, and have conveniently overlooked the all-important fact that sales tax will be abolished on goods urgently needed by people. The policy of the Government is to reduce the cost of living wherever possible, and, therefore, the Treasurer proposes to remove the sales tax from all foodstuffs. I point out at this juncture that the preceding Labour Government did not see fit to grant that measure of relief to the people. It is a commendable action on the part of this Government to make it possible for the people to obtain food at a reduced cost. Another important concession that I emphasize is that the Government has abolished sales tax on building materials. The two fundamental factors which concern the people are the cost of food, and of housing, and the Treasurer has been able to remove the sales tax from items in those two categories. Vet, Opposition members have completely avoided making reference to them, and have concentrated their attention on minor or secondary aspects of the bill. Much has been said in this debate about the proposed increases of sales tax on various items. I can say, without fear of contradiction, that no member of the Parliament enjoys supporting, a bill that increases taxes. We definitely enjoy granting people relief from taxation, and the policy of the Government is to grant such relief, wherever possible. However, the requirements of the nation demand certain action, and the Government would fail in its duty if it did not accept its> responsibilities in that respect. I am sure that persons who now consider that increases of sales tax are unwarranted will ultimately recognize the need for such action, and will give the Government credit for being 'honest in its policy to promote the welfare and to ensure the security of this country. A vital aspect of this bill, which shuld not be 'overlooked, is that our resources of man-power for industry and defence are strictly limited. Earlier this evening, the Minister for Labour and National Service (Mr. Holt) explained some of those problems in his second-reading speech on the National Service Bill 1950, and the Government, in the Sales Tax (Exemptions and Classifications) Bill 1950, is endeavouring, not entirely to transfer labour immediately from one industry to another, but to discourage the expansion of non-essential industries. It would not be wise, for example, to allow migrants to engage in industries that are not really essential to the national need. Therefore, the action of the Government in increasing the sales tax on the products of less essential industries, will establish the principle of discouraging, for the time being, the expansion of such industries. That policy, in turn, must help to guide migrants, and many Australians, into employment in essential industries. The Government, regrets having to take such action, but it has a responsibility to fulfil to the nation as a whole. Opposition members have endeavoured to make party political capital out of the increase of sales tax on cosmetics, but I believe that their remarks merely tend to belittle the womenfolk. In the present national need, matters that are essential to the safety and happiness of the people must receive priority, and I am certain that the minor sacrifices, for which this bill calls from the people generally, will be accepted cheerfully. The Government, as soon as it considers that results justify the relaxation of those impositions will grant the necessary relief. I again emphasize the fundamental principles underlying this bill that should not be forgotten. They are, (1) that foodstuffs and building materials will be exempt from sales tax; (2) that the people generally will be guided into more essential industries for the time being; and (3) that the sales tax can be adjusted from time to time as the national economy warrants. Having in mind those factors, I have much pleasure in supporting the bill. Mr.BIRD (Batman) [9.26].- My first impression of this bill was one of pleasure, because I noted that the Government intended to reduce the sales tax on certain articles. But my pleasure turned to consternation and dismay when I discovered, on perusing other provisions of the measure, that it was proposed to increase the imposts on various goods in order to collect an additional £10,000,000 per annum. Therefore, I believe that the bill is a big disappointment to the Australian people. I, in common with many electors, had hoped for a reduction of sales tax this year. My hopes had been raised by the promise made by the present Prime Minister (Mr. Menzies)' in his policy speech during the last general election campaign when he said, among other things - We will review the incidence of indirect taxes (which are a huge, though sometimes unrecognized item in Australia) upon basic wage and cost-of-living items and housing costs. On hearing that weighty pronouncement, about twelve months ago, I thought that the least that could be expected from a Liberal government would be a sharp reduction of indirect taxation. My opinion was reinforced by the comments that had been made by members of the Liberal party for a number of years whenever sales tax legislation was under consideration. The pages of Hansard are literally studded with their statements in which the incidence of the sales tax is roundly condemned. I recall that the sales tax was introduced by the Scullin Government in 1930, and that the members of the conservative party of that day strongly opposed it. On various occasions since that time, they have not been backward in condemning increases of sales tax. Their hostility to it was manifest even in the darkest days of World War II., when the Labour Government was forced, by the national emergency, to increase the sales tax, although those rates were not comparable with the scale proposed by this Government. Naturally, I thought, with that evidence at my disposal, that the last thing that could be expected from a Liberal government would be an increase of sales tax, and, therefore, my astonishment was not to be wondered at when I learned that this Government contemplated, not a nominal increase in the main, but a most savage increase of sales tax on articles that were really needed by the people. The sales tax was introduced in 1930 in the trying times of the financial and economic depression. It was originally intended as an emergency measure but has tended to become a source of permanent revenue. During the early thirties the governments of most countries which were forced to impose sales tax said that it would be only a temporary imposition. This Government has not only made it permanent but also increased it to a degree never before known in the history of Australia. The governments of the depression days can be excused for the imposition of sales tax because falling price levels caused income tax receipts to shrivel to such an extent that the raising of additional revenue became necessary. But never at any time was it suggested by those who introduced the sales tax that it was an equitable apportionment of the taxation burden. To say the least, it is a most inequitable apportionment. The Labour party recognizes that fact. When the Labour Government introduced sales tax it said that at the first available opportunity it would decrease the rate and it did so over the last three years or fours years of its regime. In a period of prosperity such as the present, one would expect further reduction of sales tax rates, but they have been increased most viciously. I indict the principle of sales tax generally and the proposed increase in particular because it fails to meet the needs of equitable taxation. Because of the operation of a sales tax a large proportion of the amount earned by the worker is spent instead of being saved. It is unavoidable that sales tax should be unfair to the lower wage-earner because it fails to take into account the economic position of the people who purchase the items taxed. Successive governments have retained the sales tax without detriment to themselves because it has been of a comparatively mild nature. The constant collection of a mild tax from millions of consumers lends a painlessness to the process of payment with the result that there has not been much condemnation of sales tax. But, with the steep rise of the cost of goods the Government will be more unpopular than before, if that is possible, when these proposals are implemented. It appears reasonable to appraise any taxation from three points of view. First of all, how doe9 it apportion the burden of taxation among persons with different incomes? Secondly, what is its efficiency when measured by the cost of administration in relation to the revenue produced? Thirdly, what is its effect on the productivity of the economic system? Judged in this way sales tax and the increases proposed in this measure are to be roundly condemned. Sales tax places the same burden on all sections of the community. A man may be a millionaire or a pauper but when he buys an article, irrespective of his financial position, the same tax is imposed on him. In that respect a sales tax is unfair and cannot be justified in these days of prosperity as it was in the 1930's. When the Treasurer foreshadowed this measure in his budget speech, he said - It is proposed to increase the rate of sales tax on certain goods, the manufacture and sale of which are considered to cause inordinate competition for materials in short supply and skilled man-power. It is hoped that the discouragement of the higher rates will check, to some extent, the growth of this competition for materials and roan-power which could be better employed in the production of more essential goods. The additional revenue which it is expected will be obtained as a result will be about £10,000,000 in a full year, or approximately £7,500,000 in the current year. The dual purposes of this bill, as related by the Treasurer, are to raise additional money to the amount of £10,000,000 and to fight inflation. This bill will not fight inflation because it will fail in its objective of causing a diversion of labour power. The articles on which it is proposed to increase the sales tax from 25 per cent, to 33$ per cent, are those which people must have and the burden will fall on the workers who will have to dip further down into their pockets in order to meet the increased cost. Honorable members opposite have waxed eloquent about the necessity for increased taxation. They have said that because of the position in Korea and the desperate defence position which may obtain in Australia shortly additional expenditure on defence is most necessary and that therefore this bill should not be opposed. The Labour party recognizes that certain obligations have been entered into and must be borne by the people of Australia but if taxation is to be increased why cannot it be increased equitably? Nobody can suggest that the increased sales tax proposed is equitable. If the Government were to put to the people in broad terms the necessity for increased taxation they would not object to a proper and fair increase, particularly on higher salary earnings. A huge reservoir of taxation is still untapped by the Government. Honorable members have heard that the Treasurer contemplates introducing a bill to deal with excess profits very shortly but I gravely doubt whether it will be presented to the House before Christmas. The Treasurer could obtain more than £10,000,000 from an excess profits tax, but no effort has been made to obtain extra taxation from the people who can afford to pay it. The Government has made a most unscientific and unintelligent approach to the rate of taxation applicable to suitcases. The sales tax on music instrument cases is 25 per cent. If one has a cornet or a piccolo one must pay a tax of 25 per cent, when purchasing a case in which to carry it. But the sales tax on a suitcase which is a most necessary article is 33$ per cent. Every housewife must have a suitcase, particularly at the present time, because most retailers will not deliver goods. That is the continual grievance of housewives in Victoria who have to buy goods and carry them home like a pack horse. The Government has an excellent opportunity to give encouragement to housewives by imposing a lower tax on fibre suitcases. The additional 8$ per cent, tax on these cases, as compared with music instrument cases, is a most unfair imposition. A case for a trombone or a cornet will cost an additional 25 per cent, but a case for the purpose of carrying essential goods for the family will be subject to a tax of 33$ per cent. It may be that the Government has overlooked this point. If so, I shall be glad to hear the Treasurer admit the mistake and reduce the tax on suitcases to 25 per cent. This bill is ill-conceived and reeks with anomalies. The Government would be well advised, in its own interests, to withdraw it. I think that the Government is attempting to do some sort of job in the interests of the people although it has not done very well up to the present. If it wants to do a good job I advise it to withdraw this bill and draft a scheme which will meet the requirements of the Australian people. The Government could permit the sales tax reduction of £1,000,000, eliminate the increased taxes it has been estimated will produce £10,000,000 and obtain more than that amount by means of an excess profits tax. Mr.WHITE (Balaclava- Minister for Air and Minister for Civil Aviation) [9.43]. - The honorable member for Batman (Mr. Bird) has emphasized that this bill is unfair to the lower-paid wage earner. If honorable members of the Opposition believed that, there would be merit in their protests. In fact the very reverse is the case. As the honorable member for Batman has said, sales tax was introduced by a Labour government during the depression. No taxation is pleasant and it should be as fair and light as possible. The sales tax covered a wide range of commodities during the depression including many foodstuffs and it was only after strong protests had been made by honorable members of the then Opposition that many items were exempted. The honorable member protested strongly against the tax on trombone, cornet and other musical cases, but he did not mention the numerous items from which the Government has removed the tax, such as cane lifts, trailers, a number of foodstuffs manufactured in Australia, and ice which is a necessity for the family. The honorable member protested on behalf of the poor harassed housewife and the worker but the tax was retained on those foodstuffs and on ice over the years although honorable members on this side of the House protested that the poor housewife could not afford an electric refrigerator as members of the Labour party could and that she had to put up with an ice chest. This Government now proposes to remove the impost on ice. It is only one item in a long list of proposed exemptions. Coffee anl coffee essence, cocoa and cocoa essence all will be removed from the schedule o' taxable goods. Important exemptions will be those which affect goods required for home building. Coal, which is vital to the production of steel and cement, also will be exempt. The Labour Government retained the sales tax on coal imported. We shall remove it. Metal building materials, such as girders, rods, bars, wire, sheets, mesh and fabricated units will be omitted from the sales tax schedules, and builder's hardware, which we asked the Labour Administration to exempt years ago, will be treated similarly. These changes will be of great benefit to the working men about whom members of the Opposition bleat so plaintively. The Labour Administration insisted on retaining sales tax upon all those items, which have an important effect upon the cost of building. The list of exemptions covering builders requirements occupies nearly a page. Apparently members of the Opposition would tax the working man who wants to build a house or extend his home. Bolts, brads, catches, decking spikes, doorbells, door handles, hasps, hinges, hooks, and knobs, which will be exempt, all affect the cost of building a house. I shall not read the whole list, but I direct attention to electrical fittings. Do members of the Opposition want to keep the working man on the candle or kerosene lamp standard? They retained the charges on electrical fittings when they were in power; we shall eliminate them in order to make housing costs cheaper. We have said that we will put value back into the £1 and check inflation. This bill is one of many measures that the Government has prepared for that purpose. The honorable member for Melbourne (Mr. Calwell), in his fatuity, laughs and jeers and fails to appreciate the value of the Government's plans. But I am sure that the ex-serviceman who wants to buy a war service home but can borrow only £2,000 for that purpose will appreciate what we are doing. Members of the Opposition have not examined the bill properly. They merely shout a few threadbare socialist shibboleths that were first used in the time of Karl Marx without understanding the subject that they are supposed to be discussing. I direct their attention to many other items that will be exempt from sales tax under this new provision. Bath heaters, which probably do not interest them but which interest many other Australians, will be removed from the list of goods that are subject to sales tax. The arguments that have been advanced by the Opposition favour the purchasers of luxury motor cars, one of the few commodities that will be subjected to a higher rate of tax than previously. Members of the Opposition have protested against the Government's proposals merely because they know that their objections are being broadcast. They hope thereby to gain a few extra votes at the next general election. The facts are that this measure will remove sales tax from many commodities and will increase the impost on a few items. No government increases taxes for fun. The present Prime Minister (Mr. Menzies) told us in 1939 that the total receipts from taxes in Australia for 1939-40 would be £100,000,000. This year the Government proposes to expend over £112,000,000 on social services alone. Furthermore, it must obtain extra money for defence. It has adjusted many anomalies that the Labour administration refused to adjust. For example, the Chifley Government would not allow an ex-service pensioner to obtain unemployment relief without suffering a deduction on account of his pension. This Government has put that anomaly right. However, such acts cost money and money cannot be taken out of the air. The Government does not believe in inflation, the nationalization of banks and the printing of bank notes adlibitum. It believes in conducting the affairs of the country on a businesslike basis and in paying its way. Therefore, it proposes to obtain a little additional money at the expense of such citizens as those who ride in Chrysler motor cars and other luxurious vehicles, which members of the Labour party are known to favour. At the same time, it intends to reduce the cost of building and to enable the housewife to obtain food more cheaply. Mr.Bird. - I agree with the proposed deductions. Mr. WHITE.- Apparently the honorable gentleman is one of the fair members of the Opposition, but he did not say anything about that during his speech. I have had to say it for him. This measure will enable the people to build more houses and it will help, in a small measure, to check inflation. The Government must obtain additional revenue for defence and for social service benefits. Changes will be made in the sales tax schedules if and when anomalies are disclosed. Any representations that members of the Opposition may make on such issues will be considered carefully by the Treasurer (Mr. Fadden). The bill will remove many anomalies that the Government parties promised that they would remove when they faced the electors during the general election campaign. This is the earliest opportunity to do so. We are lightening the burden of taxes upon those citizens who feel the burden most. Members of the Opposition have claimed that the sales tax is variable. But income tax also is variable. The person on the lowest scale of income pays the least income tax, and the person who is least able to bear the expense will pay the least sales tax. That is in accordance with the Government's policy, and that is why this bill has been introduced. It deserves the applause of all honorable members. Mr. BRYSON(Wills) [9.52].- -The Minister for Air (Mr. White) made a remarkable speech in support of the bill. He told us that the measure was necessary partly to finance increased defence expenditure, partly to finance additional social services costs, and partly to provide funds for other government expenditure. He also described it as a great anti-inflationary measure. But, when we consider the fact that the Government intends to collect only an additional £7,500,000 this year from the sales tax, the honorable gentleman's argument in relation to expenditure on defence, social services and other governmental activities immediately falls to the ground. He told us that the bill would remove many sales tax anomalies and that building materials, foodstuffs and a number of other important items would be exempt. He quoted extensively from a list of goods covering three pages in the printed schedules. In his eagerness to tell a good story, he forgot to mention that the total sating to the taxpayers from exemptions and reductions will represent only £1,000,000 in a full year, or £640,000 for the current financial year.. That exposes the weakness of his assertion that the alterations will have any marked effect upon the cost of building. The saving will be only a miserable one. Mr. Fadden.- The Labour Government did not make those concessions when it had the chance to do so. Mr. BRYSON- It enacted many other valuable measures. But the point at issue now does not concern the achievements or the shortcomings of the Labour administration. We are now discussing the sales tax legislation that has been introduced by the Treasurer (Mr. Fadden). That right honorable gentleman will stand alone as the greatest political acrobat in the history of this Parliament. Year after year, when he was a member of the Opposition, he criticized the acts of the Labour Government and suggested what should be done in order to reduce the burdens of taxation and government expenditure. On dozens of occasions he opposed the sales tax. He and his colleagues were elected to power last December on the strength of a programme that included promises to reduce taxes and government expenditure. Yet one of the first results of his accession to office has been an increase of government expenditure by about £170,000,000 a year. He now proposes to increase sales tax charges so that he can obtain an additional amount of £7,500,000 this year from that source. He has completely somersaulted and reversed the policy that he expressed so vehemently during the eight years in which the Labour party was in office. He has made a greater mess of this bill than he has made of any other task during the whole of his political career. One can scarcely believe that he has given any serious consideration to the job of amending the sales tax schedules. The Minister for Air said the purpose of the measure was to remove anomalies from the sales tax system and also to raise additional revenue from the sales tax on luxury goods. He made a big song about the proposed increased tax on motor cars. We admit that privately owned motor cars are luxuries, but I point out that the Government's plan is to increase the rate of sales tax on such vehicles only from 8$ per cent, to 10 per cent., which represents merely £1 13s. 4d. for each £100 of the cost. Furthermore, spare parts for motor cars will not be subjected to higher sales tax. Apparently, the Government regards them as necessities instead of as luxuries. The tax on wireless sets, which are virtually essential in every home, will be increased from 8i per cent, to 25 per cent. That will remove another anomaly, I suppose! It seems that a wireless set is a much greater luxury than is a new motor car. Anomalies may be found throughout the schedules that the Government has prepared. Certain electrical appliances are to be exempt from sales tax, but electric light globes, which are a necessity in every house to which electric power is supplied, are not included in the list, although they wear out and must be replaced at regular intervals. Does that represent the removal of an anomaly? Bell equipment, burglar alarm equipment and fire alarm equipment, which are important in a civilized community, will remain taxable although certain other electrical accessories will be exempt. Will that remove anomalies, or will it increase the number of anomalies? I ask the Minister for Air to express an opinion upon that question. Electrically operated appliances and machines will not be exempt although they are necessary in a modern economy. Floral tributes, including bouquets and wreaths, will be exempt from tax. No doubt such items are not luxuries in the opinion of the Treasurer and the Minister for Air. I wonder why wreaths should be removed from the field of sales tax at a time when the tax on many other commodities is to be increased. The only explanation that occurs to me is that the Government expects that the mourners will not provide wreaths, if they are subject to sales tax, when it is being decently buried at a very early date. Musical instruments have been dealt with at length; and I shall not refer to them. But watches and clocks are considered to be luxuries, and they are to be taxed at the new high rate of 33$ per cent. The movements, parts and keys for such instruments will be taxed at the same rate. Although spare parts for luxury motor cars are undoubtedly luxuries the sales tax on such goods will not be increased. However, sales tax of 33$ per cent, will be imposed on spare parts for watches and clocks. Is that particular provision intended to remove ah anomaly from the principal act, or is it not, in itself, an anomaly? Sales tax of 33$ per cent, will also be imposed on studs, sleevelinks and fountain pens. Indeed, the more closely we examine the tax schedules in the present measure the more glaring the anomalies appear. I shall not delay the House very long; but I cannot help directing attention to some of the more obvious anomalies in this measure. Sales tax of 33$ per cent, is to be imposed on toilet and beauty preparations, which include powders for use on the human body and toilet powders for use on babies. Does the Treasurer consider it a luxury for a mother to powder her baby's bottom before wrapping a napkin round it? I should like the Treasurer to answer that question. Mr. DEPUTY SPEAKER.-Order ! I should like the honorable member for Wills (Mr. Bryson) to restrain his Ian1guage. Has he no respect at all for the House ? Mr. BRYSON.- I am sorry if I have transgressed. I was pointing out some of the anomalies in the legislation. The Minister for Air said that the hill was designed to remove anomalies in the legislation introduced by the previous Government. I say that the present measure will increase tenfold the anomalies in the previous legislation. I direct the attention of the House to the fact that the Treasurer has already circulated a number of proposed amendments to the bill because of glaring anomalies that have been pointed out to him by certain interests and by persons other than the members of the Opposition. For instance, certain food preparations will apparently be exempt from the "payment of sales tax. Although wireless sets are apparently regarded by the Government as luxuries; because sales tax at the rate of 25 per cent, will be levied oh wireless sets, the Treasurer is preparing an amendment which will provide that batteries for use in wireless sets at certain types shall be exempt from taxation. That proposal is typical of the inconsistency in the outlook of the Government on these matters. Although wireless sets, including even those that are operated by batteries, are apparently regarded by the Government as luxuries, tie batteries, which form a component of those sets, are not so regarded. I suggest to the Government that valves for wifeless sets should be treated in the same way as batteries for the purpose of imposing sales tax, and that valves for replacement purposes should be regarded as necessaries. In conclusion, the bill contains so many obvious anomalies and inconsistencies that I suggest to the Treasurer that he should withdraw it altogether. After he has given proper consideration to the Government's need to obtain additional revenue and has carefully considered the requirements of the community, having regard particularly to the present high cost of living, he could present fresh preposals to the Parliament. If the Government finds it necessary to increase the revenue from sales tax by 10 per cent, the Treasurer should get some of the officers of his department to make a careful examination of the items proposed to be taxed, segregate the luxury goods from the necessaries, and introduce a new measure which will provide for increased sales tax only on goods that are truly luxuries. Mr .TURNBULL (Mallee) [10.5].- The Minister for Air (Mr. White) covered most of the points raised by honorable members who have taken part in the debate, hilt I shall deal with certain remarks made by the honorable member for Batman (Mr. Bird), who spoke subsequently to the Minister, the honorable gentleman said that the Labour party was justified in introducing sales" tax originally because at that time the Government heeded revenue to combat the suffering caused by the depression, but that the present Government was not justified in seeking to obtain additional revenue from sales tax at a time such as the present. I cannot understand such confused reasoning. Again and again members of the Labour party have harped on the sufferings of the people during the depression, when many persons walked the roads and did not have sufficient money even to buy food. Of course, that picture of the tragic state of affairs during the depression is, unfortunately, true. Therefore, one finds it difficult to understand the contention of honorable members opposite that sales tax should be imposed on goods of all kinds, including foodstuffs, during a depression as it only added to the heavy burden already being carried, but that such taxes should not be imposed during a time of comparative prosperity. I do not seek to justify the imposition of sales tax, and I should like it to be eliminated altogether. However, the difficulty seems to be that at present the Government cannot do without the revenue derived from it. The honorable member for Batman also made another remarkable statement. He said that if there is one article that is absolutely essential to a housewife it is a Suitcase. I should think that if there is one article that is indispensable to a housewife it is a wedding ring, and I remind members of the Opposition that Labour imposed a sales tax of 25 per cent, on wedding rings. In his wisdom, the present Treasurer (Mr. Fadden) proposes to exempt wedding rings from sales tax. The action taken by a former Labour Administration in imposing and retaining a sales tax of 25 per cent, on wedding rings indicates the nature bf Labour's concern for the welfare of the ordinary womenfolk of this' country. It is all very well for members of the Labour part to advocate more marriages, the encouragement of child birth and so on, but how can they reconcile their attitude with their actions in regard to this tax? I congratulate the Treasurer on his proposal to remove this injustice. The honorable member for Batman attacked the Minister for Air and said that every argument advanced by him had fallen to the ground. In remind the honorable member for Batman that the preceding Labour Government imposed sales tax of 8$ per cent, on builders' nails, notwithstanding that any building without nails would fall to the ground. The proposals contained in this measure are progressive, because nearly all the goods and articles on which sales tax is proposed to be increased are luxury items. The honorable member for Wills (Mr. Bryson) referred to the proposed tax on luxury motor cars, and complained that the Government was guilty of inconsistency because it does not propose to increase sales tax on motor car parts. The honorable gentleman did not appear to realize that spare parts will be required principally for old cars, which become increasingly difficult to maintain as they grow older. Undoubtedly what the Treasurer had in mind when he included this proposal in the measure was that a man who buys a new motor car does not ordinarily need to buy parts for replacement for many years. It is only fair, therefore, that the sales tax on spare parts for motor cars should not be increased. Similarly, the proposal of the Government in regard to the sale of tyres is to be commended. Another anomaly that will be corrected by the passage of this measure concerns the sales tax on trailers purchased for agricultural pursuits. .The anomaly in the existing legislation was first brought to my notice some years ago by a constituent in Kerang who purchased a trailer which had a drawbar to enable it to be towed behind a motor car. The purchaser had to pay sales tax amounting to just under £30 on the trailer. Later he discovered that if he had bought a similar trailer fitted with a pair of shafts it would not have been liable to sales tax. That was a glaring anomaly which constituted a serious injustice, and I ventilated it in the House on several occasions during the last Parliament. The former Prime Minister and Treasurer, who is now Leader of the Opposition (M.T. Chifley), said that his Government would not do anything to rectify the position. In fact, he told me finally that I did not appear to appreciate that the tax imposed on the sale of such trailers was a sales tax, and that when a person purchased a trailer the tax was calculated according to the value and the condition of the vehicle at the time of sale! It was obvious that the right honorable gentleman was not very much concerned about the effect of the sales tax on primary producers. I represent the great. Sunraysia and Nyah areas in which there are probably more growers of dried fruits than in the whole of the rest of Australia. Those engaged in the dried fruits industry have suffered particularly because of the incidence of sales tax on agricultural machinery, and until the present Government assumed office and introduced this measure it seemed that primary producers generally would continue to suffer. I congratulate the Treasurer on having proposed in this measure to exempt from sales tax trailers for use in the agricultural industry. I do not say that I approve of every proposal contained in the measure. For instance, I should like wireless sets to be exempt from the payment of sales tax because I do not think that they should be regarded as luxury goods. However, I hope that the sales tax on wireless sets will be reduced, if not removed altogether, as soon as possible. The honorable member for Hoddle (Mr. Cremean) said that the Government is increasing everything to some degree. I agree with him. It is increasing our defence commitments and is increasing the pensions of ex-servicemen and war widows and, generally, is doing so much for the national good that we must compliment it. The increased services provided by the Government cannot be financed without additional revenue, and in order to obtain sufficient revenue the Government has been obliged to introduce this measure. However, I hope that the proposed increase of sales tax will be only temporary and that the tax will be reduced, if not removed altogether, as soon as the opportunity to do so presents itself. In conclusion, I say that the Government should be complimented on its decision to exempt so many articles from the payment of sales tax. I am particularly pleased that it proposes to remove sales tax from articles used in house building. Although that proposal may not immediately reduce the cost of house building, I can assure the Government that anything that tends to reduce the cost of house building will be appreciated by the people generally. I support the bill although, as I have already pointed out, I prefer that sales tax on wireless receiving sets should not be increased, and I hope that at the first opportunity it will be reduced. Mr. W.M. BOURKE (Fawkner) [10.15].- The bill provides for the exemption of certain items from sales tax. It also increases the rate of sales tax on a number of other items, in some cases from 8$ per cent, to 10 per cent, and in other cases from 8$ per cent, to 25 per cent. In addition, many new items are to be brought by the bill under the operation of sales tax at the hitherto unheard of rate of 33$ per cent. My attitude is that sales tax should be abolished altogether. Mr. Turnbull.- I agree with the honorable member in that respect. Mr. W.M. BOURKE. - Then the honorable member for Mallee (Mr. Turnbull) is not giving effect to his agreement with my attitude, because he is now supporting a Government that intends to impose sales tax at the rate of 33$ per cent. Indirect taxation is wrong in principle because taxation should be raised directly on the principle of ability to pay. A man with family responsibilities who earns less than £10 a week should not pay income tax, which should be paid only by people on higher incomes. The rate of income tax should increase in accordance with the level of income. Fields of taxation which could be further exploited by the Government include the big brewing combine of Melbourne, which last September obtained permission to increase the price of beer and promptly proceeded to double its profits, which last year amounted to more than £500,000. Other fields include big retail stores, furniture stores and chain stores which are making fabulous profits and which should be paying direct taxation on the principle of ability to pay. Indirect taxes such as sales tax and customs and excise duties are all paid in direct proportion to the consumption by the consumer of the commodities on which they are levied. That means that a man on the basic wage, or a man with a large family, pays the same rate of indirect taxation a unit of consumption as the millionaire or the wealthy bachelor pays. In my opinion that is an inequitable principle. I remember reading an article that was written ,by Mr. John Curtin, who will assuredly go down in history as one of this country's greatest sons. The article was published soon after he became Prime Minister in 1941. In it he stated that the principle which he wholeheartedly supported was that all indirect taxation should be ultimately abolished and that that principle should apply even to protective customs duties. We all support the principle of protection, but, as John Curtin said in that article, in many instances in which customs duties are intended to protect industries in this country, the desired measure of protection could be afforded by way of bounties instead of by way of customs duties. The basis of that contention is that bounties would be paid to manufacturers out of revenue, that is, out of money that would have been raised by direct taxation on the principle of ability to pay, whereas customs duty is indirect taxation and falls upon the consumer in proportion to his consumption of goods. It was interesting to note that in a recent report on the rayon weaving industry the Australian Tariff Board specifically approved of the principle that, in the case of that infant industry, protection should be afforded by a bounty paid out of general revenue rather than through indirect taxation by means of customs duties, which would be passed on to the consumer and would increase the cost of living. I turn now to the list of goods that are to be exempt from the operation of sales tax. Honorable members opposite have tried to give to the House and the people the impression that the main purpose of this bill is to' extend the range of exemptions. Actually, although the bill does provide for a number of exemptions, the revenue that would have been received from sales tax on the items to be exempted would total only about £1,000,000 in one year, whereas the revenue that will be derived from the imposition or increase of sales tax on other items will be about £10,000,000. In other words, the consumers will have to pay another £10,000,000 in tax that will be passed on in prices and the people will end up poorer to that extent. The list of items that are to be exempted from sales tax, which covers two and a half pages, includes items that concern the constituents of the Treasurer (Mr. Fadden). They are rather expensive items. The right honorable gentleman has no doubt been anxious to help his constituents and to do what they wish him to do by abolishing sales tax on the following items: - Cane lifts and other machinery, implements or apparatus for use exclusively or primarily and principally in the loading or unloading of sugar cane ; fencing wire strainers ; stump and tree extractors and grubbers; plants, trees, &c. I agree with the exemption of those items from sales tax, but I should like sales tax to be abolished altogether. Although the Treasurer has been looking after the primary producers and his own supporters the housewives and the community generally will have to find the money to make up the charge from which he is exempting' his supporters. The people who can least afford to pay are to be asked to foot the bill. Mr. DRUMMOND- Would the honorable member apply that to houses and to everything in them, because housewives live in houses ? Mr. W.M. BOURKE.- There is to be some small relaxation in relation to building materials and there are also to be exemptions in relation to some manufactured food products. I support those exemptions, but they are quite small. The total loss of revenue because of the exemptions, as I have already mentioned, will be only £1,000,000, whereas the extra tax to be imposed under the measure will raise an additional £10,000,000. The honorable member for Mallee actually implied that the Treasurer had a romantic streak because he had included in the bill provision to remove the sales tax on wedding rings, and implied that some sort of contribution was thereby being made to the encouragement of people to marry and to improve the birth-rate. Mr. Thompson.- But the tax is to he put on engagement rings. Mr. "W.M. BOURKE. - That is so. lt is about five years since I bought a wedding ring, and if my memory serves me right I paid about 25s. for it. I do not know whether other honorable members have had more recent experience in relation to that matter. Mr. Beazley.- I paid £3 3s. for a wedding ring. Mr. W.M. BOURKE.- That indicates the rise in the cost of living that occurred between my purchase of a wedding ring and the purchase of one by the honorable member for Fremantle. The honorable member for Mallee did not point out that although the bill provides for the exemption of wedding rings, rings set with gems are not to be exempt. In other words, engagement rings are still to be subject to sales tax, at the iniquitous rate of 33$ per cent. Mr. Calwell.- It has been increased from about 8$ per cent. Mr. W.M. BOURKE.- Yes, it has been increased considerably. The people who buy engagement rings are in a fairly vulnerable position. They are exploited more and have their sentimental feelings more played upon by the commercial community in connexion with the purchase of engagement rings than is the case in relation to the purchase of any other item. Jewellers who sell engagement rings to young couples intending to be married show them expensive rings in the hope that, because of the presence of the young lady, the man will buy the most expensive ring offered to him. Often the price of such rings is more than young men can afford to pay. A big profit i9 made on them, and now the Treasurer apparently wants to get his cut by adding 33$ per cent, to the cost of such rings through the imposition of sales tax. If the removal of the sales tax from wedding rings can be held to provide an encouragement for people to get married, then the increase of tax on engagement rings could be held to discourage people from 'becoming engaged. I am sure that young people about to become engaged will make representations to the Treasurer for the removal of the proposed iniquitous impost on the young people of the community. I add my protest to those of other honorable members regarding the imposition of a sales tax of 25 per cent, on wireless receiving sets because the principle of such a tax is very bad. A wireless set is a necessity in every home, and, despite the imposition of the heavy tax, people will still buy wireless sets. However, in future they will have to pay more for them because of the increased tax proposed in the bill. The principle is bad because, in the course of a few years, we shall have television in this country. I hope that there will be a television set in the home of every family. Television will be a necessity, not a luxury, but people on the lower ranges of income will not be able to buy television sets if they are subject to a heavy rate of sales tax. Instead of increasing the rate of sales tax on wireless sets, such sets should be completely exempt because they are a necessity. The argument advanced by Government supporters that the . bill will reduce the incidence of sales tax is not borne out by the fact that the list of items on which a tax of 33$ per cent, is to be levied covers nearly two pages of closely typewritten script. There are only two items in the list that I approve of as suitable for a luxury tax of 33$ per cent. One of them is furs, which is really a luxury item. I notice that luxuries such as imported model frocks, costing 50 guineas and upwards, have not been included in the list of luxury items. Certain other expensive items that might well have been included in the list have been omitted from it, but a number of items which by no stretch of the imagination can be regarded as luxury items have been included in the list. They are items which people will continue to buy, despite the imposition of this extra tax, but they will have to pay more for them. The average housewife likes to indulge occasionally in the . luxury of buying crystal-ware, vases and other ornaments, but those items are to be subject to the iniquitous tax of 33$ per cent. Housewives will, of course, continue to buy them and will have to pay higher prices for them. Other items that are to be subject to the 33$ per cent, impost are necessities like hair brushes and clothing brushes. A stationer who conducts a newsagency and stationer's shop told me recently that, in anticipation of the imposition of this sales tax of 33$ per cent, on so-called luxury items, he had stocked up with all the luxury items that he considered would become subject to the tax. He said that not one of those items of luxury stationery is included in the list of items to be subject to 33$ per cent, tax, but that fountain pens and ball-point pens, which he thought would not be included in the category of luxury items, have, in fact, been included, although they are absolutely necessary for every schoolboy and schoolgirl and for tradesmen and shop assistants who are continually writing out receipts. The list of items to be subject to the tax of 33$ per cent, includes handbags, evening bags and purses. Every woman must have a handbag, an evening bag and a purse, and women will continue to buy such articles. I do not think that the object of the Treasurer is to prevent women from buying these things, and to force them to alter their clothing styles so that they will be in the same position as men, who have to fossick through a dozen pockets when they want to find any small article they are carrying. A woman must have a handbag in which to keep her make-up kit and other articles. The imposition of this extra tax on the items I have mentioned will fall particularly heavily on the lower-wage section of the community, because the tax is based on consumption and not upon ability to pay. The only other item to which I desire to refer is shopping bags. A lady constituent of mine brought me the shopping bag which I now show to honorable members. Honorable members will see that it is a simple string bag, but apparently the Treasurer regards it as a luxury item. If the Treasurer would visit the Prahran market on any Saturday morning he would see bags such as this being carried while shopping by four out of every five housewives. Such bags are used by the women to carry home their vegetables, meat and groceries. This Government has had a lot to say about putting value back into the £1 and about reducing the cost of living, yet it intends to impose a tax of 33$ per cent, on such a simple and widely used essential as this shopping bag. The Government will increase the cost of these bags by the iniquitous method of increasing sales tax on them. Let us be just in our approach to matters such as this. Revenue must be raised to carry on the business of the country, but that revenue should be raised by taxation imposed on the just and equitable principle of ability to pay. Let iis reduce all indirect taxation, and for a start let us abolish the sales tax. I suggest that the Treasurer should examine the string shopping bags upon which he intends to impose a 33$ per cent. tax. If, after such an examination, be should decide to lift the tax from these articles he would be making a simple little gesture which would show the housewives of Australia that this Government is at least doing some little thing for their benefit. Mr. TOMBURKE (Perth) [10.33].- This bill to increase the sales tax has not been warmly welcomed in this House, and it will not be kindly received by the country. During the last few years of their period in Opposition honorable members of the Government parties showed an increasing hostility towards indirect taxes in general and the sales tax in particular. They seemed to feel that indirect taxes were the worst form of taxation. That attitude has been in complete agreement with the attitude of the present Opposition. Throughout the years the Labour party has believed that indirect taxes, particularly sales and pay-roll taxes are the worst of all taxes. They are regressive in their effect and throw a disproportionate burden upon the lower and middle income earners. Because of that effect, and because they tend to raise the cost of living and to involve additional clerical work on the part of business concerns, it has always been our sincere hope that at some stage the sales tax might be abolished. When honorable members on the Government side were in Opposition, they were loud in their attacks on indirect taxes, yet this bill is now placed before the House. The increase of the sales tax might be justified in some circumstances by the need to raise additional revenue, if might be said that income tax is unpopular because it has an immediate effect upon incomes and therefore this more indirect method of obtaining revenue should be adopted. In this connexion I direct the attention of honorable members to the ultimate paragraph of the Treasurer's second-reading speech on the bill. That reads as follows: - I commend the hill to honorable members as a measure which will be a material factor- I ask honorable members to note these words - in the fight against inflation, and also because of its beneficial effects in the removal of anomalies. Perhaps this measure does remove some anomalies, but it certainly creates others. The statement of the right honorable gentleman that the measure will combat inflation is completely fallacious. As the honorable member for Fawkner (Mr. W. M. Bourke) has said, how any one can suggest that a measure which raises about £9,000,000 of additional taxation and increases prices generally by at least that amount can be a major weapon, or indeed a weapon of any sort, in the fight against inflation is difficult to understand. The Treasurer pointed out that the Government had included in the first schedule a fairly lengthy list of nontaxable items. He directed attention to the items used in house-building which are now to he exempt from sales tax. The stark fact is that about 99 per cent, of the goods used in house construction were exempted from sales tax by the Curtin and Chifley Governments. The only items used in house construction upon which sales tax remained when this Government took office were materials used in buildings other than house buildings, as well as in house buildings. The effect of anything that this Government has done to remove sales tax from housing materials will never be felt; but the immediate effect of the imposition of new rates upon other commodities will be immediately and sharply felt by the community. The honorable member for Melbourne (Mr. Calwell) dealt with some of the items that have been included in the higher brackets of the sales tax. Many are paltry, and will be vicious in their effect. For instance, women will not be stopped from using cosmetics by the imposition of a higher rate of tax. I am in substantial agreement with the statement of the honorable member for Grayndler (Mr. Daly) that women will not be prevented from using cosmetics, but that in the main the wives of the working men and of the men in the middle ranges of income will be penalized because they will have to pay more for what is regarded by most women as an essential. The same remarks may be applied to a whole range of other articles. A sales tax is a completely bad tax. Previous Labour governments have reduced the range of the sales tax, and have exempted a large number of items which were formerly taxed. It is true that the sales tax was first introduced by a Labour government, but that action was taken during a period of crisis, after a worldwide examination had indicated that in such circumstances a sales tax could not be harmful. The right honorable member for Yarra in the last Parliament, Mr. Scullin, informed me that an extensive survey had been made throughout the world with regard to the imposition of the sales tax at that time, and that it had led to the opinion being formed that consumer demand being small and buying power low the tax would have to be borne by the sellers and could not be passed on to consumers. That did not prove to be the case, but it was the considered opinion arrived at upon evidence obtained at that time. In any case the Government of that day, having followed a non-Labour government, was at its wits' end to know how to meet the situation that existed at that time. This Government is quite unwilling to face up to the situation that exists now. At present the incomes of the community are very high and goods are in short supply. Supply is not short in relation to what was regarded before the war as the normal demand, but because of the large volume of purchasing power supply is short in relation to the demand caused by that purchasing power. That situation clearly calls for some action whether it be tax legislation, loan measures, distribution control, or some other such proposal by which either purchasing power can be drawn off, or control can be instituted to ensure that the limited volume of goods now available will go to those who need them most, and not to those who can pay the most for them. However, this Government, in accordance with the pattern that it has followed since it assumed office, has sought the easy course and has refused to take the only measures that can meet the present situation. The items affected by this measure are set out in detail in the various memorandums that have been circulated. In dealing with those items it is important to realize that the sales tax, like all indirect taxes, is not borne by the original buyer of the goods. In 99 cases out of 100, the sales tax, in common with other costs and charges, is passed on to the public. Motor cars provide an illustration. Only on motor cars used solely for private purposes is the sales tax borne entirely by the original purchaser. The sales tax payable on vehicles used for business or professional purposes is, of course, passed on to the public in the form of higher charges for goods provided and services rendered. Therefore, the new imposts on motor vehicles will find their way into the prices of commodities and will ultimately tend to increase rather than decrease costs. The Treasurer has sought some psychological support by abolishing the sales tax on ice. I remind the House that the tax was first imposed on ice by a government of the same political colour as the present Administration. In fact, if my memory be correct, it was imposed in 1940 when the present Treasurer first introduced the classified sales tax system. He was urged then to abandon the pro,posal to impose sales tax on ice for obvious reasons, and I have no doubt that those are the very reasons that have prompted him to remove the tax to-day. While we all are grateful that the sales tax on ice i9 now to be abolished, I pointout that ice is not such an important household commodity now as it was in those days. To-day, refrigerators are in much more general use, not only in the households of persons in the higher income brackets, but also in those of working people. Therefore, even this concession will not achieve very much either as assistance to the housewife, or as a means of pushing down the cost of living. The Treasurer's move to place a lengthy list of items into the 33$ per cent, sales tax classification is a retrograde one. As the honorable member for Fawkner (Mr. W. M. Bourke) has pointed out, this move will not prevent the sale of those commodities. It will not have that effect, even on costly items such as furs. The volume of money in the community to-day is such that people who normally purchase those goods will continue to do so. They will not consider themselves obliged to cut their spending and to invest in government bonds or securities. Mr.Treloar - They will have to put more money into the Treasury. Mr. TOMBURKE. - That is the only effect that the increased impost will have. It will not prevent the purchase of luxury lines which the Treasurer claims to be one of the prime purposes of this measure. Therefore it will not reduce the amount of money in circulation. Instead, it will merely increase prices. Generally speaking, the measure is in direct conflict with all the statements that the Treasurer himself has made during the last six or seven years. It is certainly in conflict with all the promises that were given to the people during the last general election campaign by the present Government parties. It will not curb inflation. In fact, it will have the opposite effect. The Opposition will not oppose the bill because the Government must have the revenue that it seeks. We merely point out to the people of Australia that, once again, the Government is proving that its faith is bad. Honorable members opposite are showing clearly that whereas on the hustings, they are prepared to say anything that is calculated to gain support in the electorate, having been returned to office election promises mean nothing to them. The Government is willing to go back on every promise that it made, and even to do exactly the reverse of what it promised to do. We point these things out to the people now and we shall point them out in the electorate. We believe that the people, having been deceived by this Government, will be ready and willing to make a change when an appeal is made to them. Mr. THOMPSON(Port Adelaide) [10.47]. - This measure shows clearly to the people of Australia that what the anti-Labour parties say when they are in opposition is no guide to what they will do should they be returned to office. Since I have been a member of this chamber, many sales tas measures have come before us for consideration but this is the first one that has increased the tax. Clearly the objections that honorable members opposite raised to the sales tax when they were in opposition were not sincere. The honorable member for Mallee (Mr. Turnbull) mentioned the necessity to raise funds for defence purposes, and the honorable member for Gwydir (Mr. Treloar) said by way of interjection when the honorable member for Perth (Mr. Tom Burke) was speaking, that the increased sales tax would bring more money into the Treasury. It is interesting to note what the Treasurer (Mr. Fadden) said in his budget speech on this subject. He said - A comprehensive review has been made of the sales tax law. As a result, it is proposed to remove certain anomalies and assist housing construction by removing the tax from such items of building requisites as still remain in the taxable field. The most notable item in this category is builders' hardware. Certain foodstuffs are also -being removed from the taxable field. Judging by the way in which the honorable member for Lyne (Mr. Eggins) spoke, one would think that the Treasurer had made a substantial reduction of the sales tax on building materials. Whilst I commend the Government for its decision to remove sales tax from many classes of building materials, the relief that will be afforded by that means will not be so great as the honorable member for Lyne suggested that it would be. The Treasurer in his budget speech said - The most notable item in this category is builders' hardware. Certain foodstuffs are also being removed from the taxable field. FUll details of these exempted items will be given when legislation to effect the changes is introduced later to-day. The loss of revenue in a full year will approximate £1,000,000 and in the current year approximate £040,000. It is proposed to increase the rate of sales tax on certain goods, the manufacture and sale of which are considered to cause inordinate competition for materials in short supply and skilled man-power. Mr. Treloar.- They are very sound reasons. Mr. THOMPSON.-I agree. The Treasurer continued - It is hoped that the discouragement of the higher rates will check, to some extent, the growth of this competition for materials and man-power which could he better employed in the production of more essential goods. That statement implies that the Government has introduced this measure for the purpose not of raising revenue but primarily of directing man-power and materials used in the manufacture of nonessential goods to the manufacture of essential goods. The Treasurer added - The additional revenue which it is expected will be obtained as a result will be about £10,000,000 in a full year, ot approximately £7,500,000 in the current year. The goods affected will be enumerated in legislation to be introduced lated to-day. I commend the Government for its decision to remove the sales tax on ice. A considerable time ago, when the Chifley Government was in office, I urged that relief be provided in that way to poorer sections of the community who cannot afford to purchase refrigerators. Mr. Hamilton.- Sales tax is to be removed from most classes of building materials. Mr. THOMPSON.- But the Chifley Government removed sales tax from 90 per cent, of building materials. Upon perusing the amendments that the Treasurer ' circulated this evening, I learned with regret that he had not acceded to my request to remove sales tax from cane baskets. I am not concerned about the increase of sales tax on such articles as face powders, hair oil, lipsticks and cosmetics generally. Persons who use those articles can speak for themselves with respect to the Government's proposal to increase sales tax on them. However, the Government has made a mistake in increasing the sales tax from 8$ per cent, to 33$ per cent, on cane baskets, including clothes baskets, in the manufacture of which blind people are specially trained and, in the main, earn their livelihood. That proposal will do a grave injustice to that section of the community. I again appeal to the Treasurer to reconsider my request to exempt such articles from sales- tax. I do not know what the practice is in other States, but in South Australia it has been customary to train blind people in wicker work. A blind man who has set up in business has told me that he is afraid that any increase of the selling price of wickerware as a result of an increase of the sales tax will make it very difficult for him to carry on his business successfully. I do not think that any honorable member would suggest that clothes baskets which are generally used by housewives are luxury articles or that blind people who are engaged in their manufacture can be usefully diverted to other work. At present, the price of baskets of the kind that are usually made by blind persons for 12s., on which sales tax is levied at the rate of 8$ per cent., amounting to ls., makes the price to the retailer 13s. Assuming that the latter added 25 per cent., or 3s. 3d., to that cost, the cost of the basket to the customer would be 16s. 3d. Under the proposal to increase the sales tax on cane baskets to 33$ per cent., which represents an increase of over 300 per cent, on the existing rate, the cost of such a basket to the retailer will be increased from 13s. to 16s. As the retailer fixes his margin not on the net but on the gross price that he pays to the wholesaler the retail price of these baskets will be increased from 16s. 3d. to £1. In many instances, however, retailers allow themselves a margin in excess of 25 per cent. I repeat that the proposal to increase the sales tax on wicker baskets will seriously affect blind people who engage in their manufacture. Therefore, I again appeal to the Treasurer to remove sales tax from such articles. Generally speaking, cane baskets are not widely used. In South Australia most of these baskets are made either by the Royal Institute for the Blind or by blind persons who have learned basket weaving at the institute. I make an -earnest appeal to the Government not to make it more difficult for them to sell their wares. I could say a good deal about the principle of indirect taxation, but I do not propose to do so to-night. I content myself with saying that whilst I do not like indirect taxation it is in certain circumstances a proper form of taxation for a government to impose and that those who can afford to buy luxury articles should be prepared to contribute to the revenues "of the Commonwealth. In framing its sales tax legislation the Government should give the most sympathetic consideration to the exemption of goods that are manufactured or processed largely by blind and other disabled persons. If the Treasurer (Mr. Fadden) has not yet made a final decision I ask him even at this late hour to exempt from sales tax cane and wicker baskets even though that might cause a benefit to be derived by a few persons other than those on whose behalf I have made thi9 plea. I regret that the Government considers necessary an increase of the sales tax on any item, but I trust that, in the interests of the very deserving section of the community to which I have referred, the Treasurer will see his way clear to exempt cane and wicker baskets from the tax. Mr. DALY(Grayndler) [11.1].- The more legislation the present Government introduces the keener student do I become of the policy which the Liberal and Australian Country parties announce to the people during the last general election campaign. Certain aspects of this bill have caused me to re-study the policy of those parties in relation to indirect taxation. In a little publication entitled Financial Policy of the Australian Country Party appears, among other statements, this statement by the present Treasurer - If the socialists are defeated their rates of taxation, both direct and indirect, can and will be steadily reduced. A study of Hansard will reveal that on the 31st May, 1949, at page 335, the present Treasurer is reported to have said - In view of the tremendous increase of indirect tax receipts since the Treasurer assumed office, and the resultant increase of the cost of living, it is high time the Government, in fairness to Australia, substantially reduced indirect taxation. The Minister for Immigration (Mr. Holt) is also reported to have said - Sales tax has an important effect on the cost of living. Its existence is one of the reasons why costs have reached a point at which, according to an article in the Sydney Morning Herald of the 19th September, 1949, the purchasing power of the £1 in comparison with its purchasing power in 1939 is only approximately 12s. Speaking on the budget in this House on the 15th September, 1949, the present Minister for External Affairs (Mr. Spender) is reported in Hansard to have said - There was a Prime Minister of England, I think it was Pitt, who said a long time ago that the power of imposing indirect taxes gave power to the government to tax the shirt off the back of the worker. The legislation now before us has reached the degree of severity contemplated by Mr. Pitt. The salient features of the joint policy of the Liberal party and the Australian Country party were the promises to put value back into the £1 and to reduce direct and indirect taxes. We all remember the occasion when the present Treasurer, referring to the sales tax imposed by the Chifley Government, made this historic utterance : " As you drink your tea you must remember that 50 per cent. of its cost is going to Ben. Chifley. As you smoke a cigarette or drink your glass of beer approximately 50 per cent. of the cost goes to the Treasury in sales tax." I wonder whether as the sweet young ladies to-day put on their eye shadow they realize the presence of another shadow nearby - the Treasurer - who dips his hands into their purses and takes 331/3 per cent. of the cost in sales tax. I wonder whether young women of the community as they adorn themselves attractively realize that standing nearby is the Treasurer who with a bland smile takes from them 331/3 per cent. of the price which they have paid for their cosmetics. This bill represents a classic example of the manner in which the Government has somersaulted on its promise to reduce taxes and to bring down the cost of living. This bill is a clear indication to the people that the Government has no intention to reduce taxes, either direct or indirect. On the contrary, this Government, which is committed to a policy of reducing indirect taxation, has increased the sales tax per capita from £5 5s. 5d. to £6 19s. 7d. Under the administration of this Government the average cost of indirect taxes to the average Australian family of four has been increased in the ten months from £21 to £28. An analysis of the overall indirect taxes imposed by this Government and by the Chifley Government reveals that whereas under the Chifley Government the per capita annual amount was £23 2s.10d. or £93 for each family unit, after ten months of office of this Government, notwithstanding that it was committed to a policy of reduction, the per capita amount has been increased to £26 10s. and the cost to the family unit has been increased to £106. What a remarkable back out on the part of a government which is committed to the reduction of indirect taxes! This Government has adopted the strangest policy of which I have ever heard. I do not profess to be an economist or an accountant, but I have yet to learn how any government can put value back into the £1 by an all-round increase of sales tax on the ordinary necessaries of life. The Government's extraordinary policy is exemplified in the legislation now before us under which it proposes to exact a further toll from the poorer sections of the community simply because it is not courageous enough to place the burden of taxation on the shoulders of those best able to bear it. Instead, it proposes to extract more tax from those who cannot afford any further diminution of their purchasing power. This legislation not only affects individuals as I have indicated but also threatens certain long established industries. I represent in this Parliament a very large constituency in which numerous Australian manufacturing industries have been established. I have received from leather manufacturers and others bitter protests against this legislation. Some interesting figures have been presented to me by the radio manufacturers to show how adversely it will affect that industry. A radio cannot be regarded as a luxury. I ask those who are listening to me to-night, be they poor or rich, whether, next to the provision of furniture and the ordinary requirements for eating and sleeping a radio is not an essential amenity in the home of all citizens to enable them to hear the news of the world, to take an intelligent interest in the ordinary happenings of our national life and, above all, to hear the debates in this National Parliament, particularly the speeches by members of the Labour party, who enlighten them on the real problems of the country, and on the attitude of this Government to their welfare. The radio manufacturing industry will be vitally affected by this bill. The honorable member for Melbourne (Mr. Calwell), who led the debate on it this afternoon on behalf of the Opposition, stated that an attempt was being made by the Government to introduce a measure of man-power control; that by compelling, some industries to close, it will direct their employees into other industries. Such a form of manpower control was not visualized when the present Government submitted its policy to the people during the last general election campaign. The Treasurer has admitted in his second-reading speech on this bill that the Government seeks to close luxury industries. That statement, in itself, is an indication that the Government is in favour of man-power control, and will endeavour to direct workers to industries in which they may not wish to work, but in which the Government considers that they should be employed. An attack is made in this bill on the great radio manufacturing industry which, in the year ended the 30th June, 1949, produced approximately 293,000 radio sets, which was considerably fewer than in the previous year. That reduction in itself showed that the lag in manufacture during "World War II. had been substantially overtaken. The average cost of radio receivers in the same year was £27, on which sales tax of £1 4s. was payable. Honorable members may not be aware that when the rate on radio receivers was 8$ per cent., the total receipts of sales tax from that source for the twelve months ended the 12th October last was £350,000. The present Government, although it is committed to a policy of safeguarding the interests and the welfare of the poorer sections of the community, proposes to increase the sales tax on radio receivers to 25 per cent. That figure, in the language of the ordinary man, is 5s. in the £1. A radio receiver that costs £20 will be subject to sales tax amounting to £5. Is that an instance of the manner in which this Government reduces indirect taxation? The increase of the sales tax on radio receivers is estimated to yield £1,051,932, or an increase of £701,288 under this budget, for the current financial year. No other section of industry will be hit so heavily by sales tax as the radio manufacturing industry will be. I wonder whether the Treasurer has considered the effects that his proposal will have on it? I remind him that one female is employed in it for every two males, and that the new basic wage will increase the basic production costs by 25 per cent. The over-all increase, including, sales tax, will be 40 per cent. In other words, every person who purchases a radio set will be obliged to pay an additional 8s. in the £1 for the privilege of possessing an instrument that has come to be regarded as a necessity in every Australian home. The Treasurer budgeted to collect approximately £3 12s. from the sale of each radio receiver, but as a result of the various increases to which I referred a few moments ago, he will actually receive sales tax amounting to £4 10b. on each instrument. The Government will impose that additional burden on the worker, who has no income other than his weekly wage, and on other citizens for the purpose of raking in a few extra £l's in taxation. I also find that the increase of sales tax on radio receivers will have the effect of increasing the percentage of turnover in this industry that is taken by specific taxes from 6 per cent, to 14 per cent, or, in other words, from £551,000 to £1,300,000. An almost intolerable burden will be placed in that way on the radio manufacturing industry, simply because the Government is endeavouring to divert men from it to other industries. At the same time, an additional financial burden will be imposed on every purchaser of a radio receiver. I believe that the Government's sales tax proposals inflict a burden on other industries, though possibly not to the same degree as on the radio manufacturing industry. I could cite the effect of the impost on the leather industry and on other industries, but the limited time available to me prevents me from doing so. Much depends on the radio industry in peace-time, but its importance is enhanced in war-time, when it preserves our communications, and renders valuable assistance to the Royal Australian Navy, the Army and the Royal Australian Air Force. During World War II., the armed forces depended to a substantial degree on the advances that had been made by the radio manufacturing industry in peace-time. General MacArthur is reported to have stated that, had it not been for the valuable assistance rendered by the electrical industry of Australia and the telecommunications section - the radio manufacturers - in particular, the war in the Pacific might conceivably have been lost, and most certainly would have been prolonged for some years. That statement is sufficient proof that much depends in war-time on the efficiency of radio communication. Thousands of Australians who are engaged in the radio manufacturing industry will be indirectly forced by this Government to work in other industries simply because it considers that they are engaged in work which, in peace-time, is not essential. Mr. Warner, of Melbourne, a well-known member of the Liberal party- Mr. Calwell.- He was a member in the former Liberal Government in Victoria. Mr. DALY.- That is so. This company has taken the trouble to write to me, a member of the Labour party, about the proposal to increase the sales tax on radio receivers. Such action shows how deeply he must have been moved by the Treasurer's decision in that respect. He wrote a business letter to me on that matter, in the course of which he said - Last Thursday must, indeed, go down in the history of radio in this country as " Black Thursday ". The staggering increase of tas from 84 per cent, to 25 per cent., coming, as it did, on top of the wage increases announced earlier in the day by the Full Arbitration Court, must inevitably mean an increase in the price of radio receivers by 33J per cent. I have pointed out that this Government has somersaulted on its policy of reducing taxation. It is prepared not only ic sacrifice the individual's standard of living, but also to attack the general welfare of great Australian industries. This bill provides a further indication, if such is needed, of the complete insincerity of the present Treasurer, and is a complete negation of the policy enunciated by this Government from time to time to the effect that Australian industries and the purchasing power of the people would be protected. I shall oppose vigorously those provisions which increase the sales tax on various items, including radio receivers that are considered by the Government to be luxuries. It is a clear indication that the Government is prepared to sacrifice all and sundry in the interests of a small section of the people, and in preference to calling upon those in the best position to bear the burden of taxation, to accept that responsibility. Mr. BEAZLEY(Fremantle) [11.18].- There is not much point in labouring the fact that has already been made quite clear by Opposition members that this bill represents a repudiation of the impression of policy which the present Government, when in Opposition, studiously sought to convey to the Australian people as its views. No justification whatever exists for increasing the sales tax - an indirect tax - when the budget reduces income tax - a direct tax - by £7,000,000 for the current financial year. After all, income tax is scientifically graded according to ability to pay. Rightly or wrongly, the Government decided that it must greatly increase expenditure, and having done so it had no right to reduce scientifically graded income tax and substitute for it the sales tax provisions contained in the measure now before the House. When this matter was first mentioned, the Sydney Daily Telegraph contained a splashing heading, " Seven Million pounds cut in taxation", but it was a £7,000,000 cut in income tax. The £7,000,000 cut in income tax will be more than compensated for by the £10,000,000 return to the Government from additional sales tax. The fallacy underlying the Government's plans concerning this matter is easy to expose. For some reason or other, the Government has considered it necessary to pretend that every taxation measure introduced by it has an anti-inflationary effect. Inflation, by definition, is a condition of rising prices. Inescapably, sales tax causes prices to rise further, so how it can be honestly maintained by anybody that sales tax is anti-inflationary is more than I can fathom. I recognize that the pretence is that the taxation, if it is directed at luxury industries, will discourage people from spending money on luxury goods, and that therefore it will have an anti-inflationary effect. But that it not a true statement. If a wealthy lady does not spend £300 on furs, she will spend it on something else. If it is decided to strike a blow at inflation, one taxes luxury incomes, not luxury goods. By direct taxation surplus earning power is skimmed off. I should like the Treasurer (Mr. Fadden) to explain the reason for his violent prejudice against musical instruments. Listed in this measure there are at least 100 musical instruments on which increased sales tax is to be imposed. Some of them, I appreciate, are instruments that are somewhat of a joke, but others arc not. The Government has declared that gramophone records are a luxury. I deny that, and I also deny that the people who buy them are earners of luxury incomes. Some people spend on book? whatever money they have above their needs; others spend it on music. The purchase of those articles has much more bearing on taste than upon income. Some wealthy people spend nothing whatever on musical instruments, and I maintain that by taxing those instruments the Government is not hitting at wealthy incomes as it claims to be doing. The tax on musical instruments is a savage discrimination against a particular industry. Certain musical houses, such as Musgrove's Limited and Nicholson's Limited in Perth, sell every type of musical instrument, and this measure means that the type of business in which they are engaged has been singled out for an unprecedented battery of sales tax at the maximum level of 33$ per cent. The whole musical industry is struck at in that manner, and I consider that the measure is extremely savage in its attack. I wish to support the remarks of the honorable member for Port Adelaide (Mr. Thompson) to the effect that the making of baskets and wickerwork in every State of the Commonwealth is an industry almost wholly specialized in by the blind. I am not suggesting that there are not other people engaged in the industry, but it is a well-known fact that all schools for the blind and the industries actually run by the blind concentrate on the manufacture of those articles. They, also, are singled out for a very savage increase of sales tax. Supporters of this Government, when in Opposition, rightly attacked the Labour Government for retaining sales tax. Everybody recognizes that no valid case can be made out for the maintenance of any kind of sales tax whatever. There is no sound economic principle involved in taxing a sale, and no sound result can be achieved by it. Where there is redistribution of income by means of a graded income tax, there is no principle whatever in taxing a sale, and it is quite obvious that such action has certain vicious effects. People with larger families tend to buy more of certain goods that are subject to taxation, so that the effect of sales tax, like that of any other form of indirect taxation, is anti-social. However, having been a supporter of governments that maintained sales tax. I do not consider that I am in a position to criticize the present Government because it maintains sales tax. But I do criticize it for having declared that it did not believe in sales tax and then increasing it, and also for its unsound claim that the measure that it has introduced has an anti-inflationary effect. If the members of the Government had said, "We must obtain money and this is a popular way of getting it, because by and large people can see the difference in their pay envelopes if income tax is increased, but they have become used to. rising prices, and this method will obtain for us the necessary money relatively painlessly ". At least that would have been politically honest. In the face of promises to reduce taxation, which cannot be honoured, the Government now proposes to increase taxation by an indirect method, while pretending to reduce taxation. If the Treasurer had stated that there would be no reduction in income tax because the Government, on coming into office, had found that, in consequence of increased expenditure,' such as the £50,000,000 for stock piling and other non-recurring items, it could not give effect to the promises previously made, it would have been a courageous stand. But the Government wished to maintain a pretence of reducing taxes while adding this indiscriminate increase of sales tax, and, at the same time, making the dishonest claim that the effect of the tax would be anti-inflationary. It knows that the effect will be exactly the reverse. Mr. OSBORNE(Evans) [11.26].- Having listened to the dissertation on political honesty delivered by the honorable member for Fremantle (Mr. Beazley) I feel compelled to protest against the patent insincerity of one after another honorable member of the Opposition. I have no desire to add to the discussion on this matter, but I think that it is right that some answer should be given to the insincere speeches to which we have listened during the last two hours. As the basis of the Opposition's objection to the bill before the House appears to be a charge that the Government is inconsistent in bringing forward this measure, because, when its supporters were in opposition, they had opposed the previous Government's sales tax policy, I point out that the Opposition is open to exactly the same charge. It also introduced such a measure when it was in office. This searching of past records, and seeking to criticize the Government on the basis of inconsistency, gets the Opposition nowhere. The second point which plainly demonstrates the insincerity of the Opposition towards this measure is the ingenious suggestion put forward by the honorable member for Melbourne (Mr. Calwell), that involved in this legislation is some dangerous degree of industrial conscription. A more nonsensical suggestion could hardly be made. May I remind the House that the suggestion arises in this way. The Treasurer (Mr. Fadden), in introducing this bill, stated that the Government had considered the desirability of measures designed to decrease the demand for goods that may <be classified as of a less essential character at times such as the country is experiencing at present. On that basis, the honorable member for Melbourne has produced the extraordinary theory that the measure involves industrial conscription, and that theory has been adopted by the honorable member for Grayndler (Mr. Daly). When we consider the attitude of mind of the supporters of the last Government and the very real threat of industrial conscription which they held out, that argument is placed in its right perspective. I remind the House that the present Leader of the Opposition informed his listeners at an industrial meeting in Sydney that they must be prepared to accept a degree of industrial conscription, or direction of man-power. Now his supporters have the effrontery to declare in this House that this measure involves a dangerous degree of industrial conscription. The suggestion is absolutely nonsensical. No taxation measures of any sort are popular, and no government expects them to be popular. But this is an essential measure. In the first place, it will remove a number of anomalies and patent misplacements of sales tax imposts. It will remove the tax from building materials and certain foodstuffs. The Opposition has chosen to overlook that fact entirely and has concentrated its criticisms upon the proposed additional tax on such items as cosmetics. The honorable member for Melbourne made the astounding and interestins; suggestion that this was an obviously man-ridden Government which was determined to attack the housewife. The suggestion will be received with the seriousness with which, I am sure, it was made. It is plain that the increased cost of cosmetics which will result from the additional tax will reduce the demand for cosmetics. Mr. Beazley.- The honorable member is an optimist. Mr. OSBORNE.-There can be no doubt that any increase of the price of a particular class of goods must cause a reduction of the demand for such goods. That must be obvious to the honorable member. The general lines of the measure are necessary and reasonable and should be supported by the House. It is in the nature of financial measures of this sort that they must be prepared in secret without any prior open debate. Therefore, they should be subjected to review at the earliest possible opportunity. I submit to the Treasurer two suggestions which have been made to me by constituents for a revision of two provisions of the bill. One suggestion relates to the increased tax on handbags. A constituent has argued that handbags are not luxury goods but are, in most instances, necessities. I hope that the Treasurer will give consideration to that item at the first opportunity. The other suggestion relates to silver-plated and other plated articles of a utilitarian nature. It is claimed that they are ordinary necessities and that their inclusion in the tax schedule should be re-considered. Basketware articles made by blind persons fall within the same category, as the honorable member for Port Adelaide (Mr. Thompson) has said. I hope the Treasurer will give serious consideration to these requests. This measure will remove sales tax anomalies. It provides for a sensible and helpful direction of purchasing power towards essential articles and away from unessential articles. Finally, it will assist to raise the additional revenue that the Government is forced to seek in order to finance its defence programme. On those grounds, it merits the support of the House. Mr.FADDEN (McPherson- Treasurer) [11.35]. - in reply - I shall not allow the Opposition to get away with the claim, which it has consistently made, that I, on behalf of the Australian Country party, and the Prime Minister (Mr. Menzies) on behalf of the Liberal party, made any extravagant promises about the reduction of direct or indirect taxes during the last general election campaign. This is what I said on the subject in my policy speech - Our policy is a progressive reduction of taxation on individuals and the community in general, commensuratewith national economic and financial policy. I also said - We promise that a competent review will also be made of the incidence of indirect taxation, because we recognize the necessity for sensible reduction in the many cases where such reductions will arrest the upward trend of living costs. I remind the House that I persistently directed attention to the serious anomalies that existed in the sales tax law throughout the period of Labour administration. But my representations were ignored, and it was left for this Government to remove them at the first available opportunity. One. member of the Opposition has said that building materials had been exempted from sales tax by the Chifley Government to the greatest possible degree and that little further could be done by means of sales tax concessions to encourage building. I direct the attention of honorable members to the numerous items which were subjected to sales tax under the Labour Administration but which this Government has decided to exempt. My list is as follows : - Builders' hardware (not including electrical fittings, accessories or equipment), being goods of a kind used in the construction or repair of, and wrought into or attached to so as to form part of, buildings or other fixtures, including - Bolts, brackets, brads Catches, ceiling ties, clips, clouts, corrugated fasteners Decking spikes, door bells, door handles, door knockers, door sheaves and tracks, door stops and stoppers, door and cupboard catches, door and gate springs, drawer pulls, dryvins Flush rings Gate loops Hasps, hinges, hooks, hooks and eyes, house numbers Knobs Latches, letter boxes, letter plates, locks, locksets and keys therefor, loxins Metal frames for the support of wash basins Nails, name plates, nuts Padbolts, panel pins Rivets Staples, screws, scruins Washers. Metal window frames and sashes, metal fanlight frames and sashes, metal window screens, metal louvre frames and shutters, metal doors and door frames, of a kind used in the construction or repair of, and wrought into or attached to, so as to form part of, buildings or other fixtures. Materials of a kind used exclusively or primarily and principally as ingredients of concrete or of cement, mortar or plaster mixtures. For eight years the Labour Administration, left that field untouched. The honorable member for Perth (Mr. Tom Burke) and the honorable member for Fremantle (Mr. Beazley) waxed very enthusiastic about their opposition to indirect taxes in general. I remind them that they actively supported a government which, in season and out of season, exploited indirect taxes very effectively in order to supplement its revenue. They continued to do so whole-heartedly throughout the period when that Government took advantage of every opportunity to reduce direct taxes in order to win the support of the taxpayers. It is all very well for them to pretend now that the Labour party is eager to reduce the burden of indirect taxes. They advocate that this Government should adopt a policy of increasing direct taxes in preference to one of increasing indirect taxes, although that would be the reverse of the policy that was adopted by the Labour party when it was in power. Having heard the speeches made by honorable gentlemen opposite in the course of this debate, one could be pardoned for believing that the Labour party had never been in power in this country and had never had an opportunity to do what they have advocated to-night in connexion with sales tax. Their speeches would lead an undiscerning person to believe that conditions in this country have not altered materially since the Chifley Government was in power and that a responsibility has not been cast upon this Government which has made a national stocktaking necessary, not only in relation to our national obligations but also in relation to our international obligations. Since the last general election, the position of this country has altered in many respects. The world situation and our international responsibilities have given rise to an extraordinary set of conditions which has made it necessary for this Government, in the interests of the defence of Australia and the discharge of our obligations to our allies, to prepare a vigorous defence programme that will involve us in an additional expenditure of nearly £80,000,000. The financial position of this country has been altered very materially by circumstances over which, in many instances, we have no control, but which the Government has had to face in the interests of the welfare of Australia. We were faced with a man-power shortage. We were told that we had inherited a policy of full employment. We had done so, hut it was a policy of a kind that did not make the best possible use of available labour. We found that our basic industries, which are necessary for the financial stability and safety of this country, were short of man-power. We have had to import coal, steel and cement to meet the requirements of the vigorous immigration policy that we have inherited, the developmental programme that we desire to implement, and the defence programme that we have had to formulate to enable us to discharge our international responsibilities. It is for those reasons, among others, that we have been forced to increase the rate of sales tax in certain respects. We are anxious that tie resources of this country shall be used to the greatest possible advantage. We appointed an interdepartmental committee and a subcommittee of Cabinet to review the incidence of the tax in an endeavour to ascertain how we could make the best possible use of the very meagre man-power resources that are available in this country. We have had to do something that is not very pleasant, because no government enjoys increasing taxes. I remind honorable gentlemen who have criticized what the Government has done in connexion with sales tax that the circumstances in which we find ourselves now are entirely different from the circumstances that existed when the Labour party was in power. Because the country was at war, Labour governments were able to control man-power, prices and other things, and to continue those controls after the war had terminated, when revenue was buoyant. The honorable member for Melbourne (Mr. Calwell) has said that this Government has brought back into the taxable field articles that were exempted from tax by the previous government. That statement is absolutely untrue. No article previously exempted from tax is now subject to tax. The honorable gentleman advanced the ridiculous argument that this Government, because it is endeavouring to encourage the proper utilization of our resources in accordance -with degrees of priority, is following a policy of industrial conscription. That statement is entirely illogical. The Government is endeavouring to ensure that the production of essential articles shall receive priority. The only inference to be drawn from the speech made by the honorable member for Perth is that an increase of the rate of sales tax imposed upon some articles to 33-J per cent, is not enough. The honorable gentleman said that the increase of tax proposed by the Government would not achieve its objective, because the people of this country had plenty of money and, therefore, would buy the goods that they want. According to the honorable gentleman's argument, the rate of tax should be increased to perhaps 50 per cent, to achieve the objective that the Government has set out to achieve. The cultured gentleman from Fremantle asked us to believe that the Government is interfering with the cultural life of this country. I remind him that the Labour party, when it was in power, imposed sales tax upon musical instruments at the rate of 25 per cent. Mr. Calwell.- That was four years ago. Mr. FADDEN.- According to the honorable member for Melbourne, time does not count as far as the Labour party is concerned, but time does count and circumstances do not matter as far as this Government is concerned. I remind honorable gentlemen opposite that the Chifley Government imposed a 25 per cent, sales tax upon wicker products produced by blind workers. I was struck by the argument presented by the honorable member for Port Adelaide (Mr. Thompson) in connexion with those products, and I examined the whole matter of the imposition of sales tax upon articles produced by blind workers. I LOO] wondered why the Government with which the honorable gentleman was associated had imposed a 25 per cent, sales tax upon those articles, and why it left them subject to a tax of 8-J per cent, after it had reduced sales tax generally at a time when revenue was buoyant. The same reasons that influenced the previous Government to retain the tax have convinced the present Administration of the need for retaining it. It has been contended that the operation of the tax will affect the business of those unfortunate blind people who are engaged in the wickerwork industry. Those representations have been sympathetically considered, but whilst the Government is in full sympathy with blind industrial workers it considers that it would be impracticable to give to them the benefit of an exemption from sales tax on the goods which they manufacture. In any event, it should be borne in mind that sales tax is paid, not by those who produce goods for sale, but by those who purchase the goods. It follows, therefore, that a continuance of the tax on wicker work manufactured by blind people would not affect the interests of the blind people who manufacture the goods. In other words, the considerations which impel the present Government to continue the tax are the same as those which influenced the previous Government to retain it. Members of the Opposition, who endeavoured to woo the wool-growers, and, generally, to behave towards them as the little lamb did towards Mary, are now endeavouring to ingratiate themselves with the women of this country by protesting very loudly against the proposed increase of sales tax on cosmetics. After listening to their protests, one would imagine that Labour had never imposed a sales tax on cosmetics. "What are the facts? During the most buoyant period of revenue in our history, a Labour administration imposed a sales tax of 25 per cent, on cosmetics. After all, the increase of 8-J per cent, proposed by the present Government will amount to only Id. more for each ls. of the price of beauty preparations. The only appreciable effect that the increased tax will have on users of cosmetics will be that those who purchase the higher priced preparations will have to pay a little more for them. The attempt made by members of the Opposition to make political capital out of the proposed increase is ridiculous. The honorable member for Hindmarsh (Mr. Clyde Cameron) said something about the tax charged on the sale of station wagons. He was incorrect in stating that primary producers are entitled to purchase such vehicles without paying sales tax. A sales tax of 10 per cent, has to be paid on all such vehicles purchased by primary producers and other persons. However, Land Rovers are exempt from the payment of sales tax when they are purchased by primary producers. The reason for this exemption is that they come within the general category of exemption from sales tax of machinery used primarily for agricultural purposes. Whilst Land Rovers fall within that category, station wagons do not do so. I shall not detain the House much longer. Because of the nature of sales tax it is inevitable that differences of opinion will arise about the incidence of it. I point out, however, that the Government did not prepare its proposals in an arbitrary or slipshod manner, but only after thorough consideration by a departmental committee and by a subcommittee of Cabinet. Question resolved in the affirmative. Bill read a second time. In committee: Clauses 1 to 3 agreed to. Clause 4 (First Schedule). Mr.CALWELL (Melbourne) [11.55]. - The Government proposes to exempt certain goods set out in the First Schedule to the principal act from the payment of sales tax, as the result of which £1,000,000 less will be collected from sales tax during a full financial year. However, I remind the Government that reductions of sales tax introduced by the Chifley Administration represented a saving to the people of Australia of £35,000,000 in a complete financial year. Let me put it in another way. If Labour had not reduced sales tax to the extent to which it did, the people * of Australia would be paying £35,000,000 more in sales tax than they are paying at present. Furthermore, if present values were applied to the goods which we exempted from the payment of sales tax, the saving to the people would be approximately £50,000,000. Fancy honorable members opposite talking about the largesse that they are distributing ! Their present proposal will save the people of Australia only one-thirty-fifth of the amount saved them by a Labour government. Paragraph (x) of this clause proposes to remit sales tax on electrical fittings, accessories and electrical materials, but many kinds of apparatus will not be included in that exemption. For instance, sales tax on Neon signs is to continue at the present rate of 8$ per cent., which the previous Labour Government imposed. I mention this matter of Neon signs because I suggest to the Treasurer (Mr. Fadden) that if the Government really wants to arrest inflation it should do something to limit the expenditure on advertising by companies and other large firms. The expenditure of most large concerns on advertising now amounts to 2 per cent, of their total expenditure. During the war advertising amounted to only 1 per cent, of the expenditure of such concerns, and the Government should do something about the substantial increase of advertising that has taken place, because it is increasing considerably the cost of living. The TEMPORARY CHAIRMAN (Mr. Ryan). - Order! The honorable member must relate his remarks to sales tax. Mr. CALWELL.- The Treasurer undertook to reduce taxation. In the course of a speech that he made at Boonah he said - Kates of taxation both direct and indirect can and will be steadily reduced. Mr. Fadden.- Read on ! Mr. CALWELL.-If the right honorable gentleman really wants to hear something more about the undertakings that he gave in that speech I shall read plenty more of it to him. Mr. White interjecting, Mr. CALWELL-The Minister for Air (Mr. White) will not "put me off the air ". The TEMPORARY CHAIRMAN. - Order ! I shall put the honorable gentleman " off the air " if he does not confine his remarks to the measure. Mr. CALWELL.-The Treasurer also stated - We promise that a full review will also be made of the incidence of indirect taxation. The exemptions provided for in this bill are the result of a review that has been carried out by a departmental committee and a Cabinet sub-committee of people who remain anonymous. The Treasurer should let us know the names of the people who were responsible for recommending such a restricted exemption from sales tax. Mr. MCBRIDE- The Parliament will be responsible. Mr. CALWELL.-The Minister for Air and his colleagues are responsible for the proposal, and they will have to answer for it in due course. If the Opposition did not meet the Government in connexion with this matter, age and invalid pensions would not be paid. The TEMPORARY CHAIRMAN.Order! The honorable member for Melbourne should keep to the bill. Mr. CALWELL.- I was merely answering the foolish interjection of the Minister for Defence. The whole bill is phony, farcical, and false, and the Treasurer should be ashamed of being associated with it. His reputation as a financial expert has suffered very greatly because of his sponsorship of this list of exemptions. If the right honorable gentleman wants to give exemptions let him exempt everything or at least let him make a worthwhile exemption. It is ridiculous for him to provide for a miserable exemption of £1,000,000. Whilst the . war was still on and the Labour administration had its hands full, exemptions which now total £35,000,000 a year were granted by instalments. To-day, when revenue is buoyant and there is more money in Australia than ever before, all that the Government can do is to grant exemptions which will cost £1,000,000. But at the same time it is increasing imposts on some items which the poorest people in the community need. 1950-11-21 Mr. FADDEN(McPherson- Treasurer) [12.1 a.m.]. - It is very easy for the honorable member for Melbourne (Mr. Calwell) to skite and to say that the former Government with which he was associated reduced sales tax by £35,000,000. Mr. Cai.well. - A year! Mr. FADDEN.-What rot ! Mr. Calwell.- The right honorable gentleman knows that that is true. Mr. FADDEN.- That amount was not remitted in respect of one year. Even if it had, it was due entirely to the- fact that the former Government, by its oppressive taxation policy, had extracted too much money out of the public over the years, and that revenue was buoyant because its estimate of revenue for that year was understated and its estimate of expected expenditure overstated. The honorable member for Melbourne has stated that Neon signs have been exempted from sales tax. I draw his attention to the fact that they have been merely taken out of one category and put into another one. There has been an adjustment of the classification only. Mr. THOMPSON(Port Adelaide) [12.3 a.m.]. - The clause provides for the abolition of sales tax on certain builders' hardware. As I have pointed out previously, building materials including hardware, at present subject to sales tax, represent only about 5 per cent, of the total cost of a house. A supporter of the Government has stated that at least 60,000 houses will be built in Australia during, this financial year. The Treasurer (Mr. Fadden) has estimated that all of the exemptions from sales tax now proposed will involve a loss of revenue of £1,000,000 a year. For the purpose of my submission, I should regard the average cost of a house as £2,000. Five per cent., or £100 worth of materials used in its construction are subject to. sales tax, and that would amount to not more than £10. Therefore, in respect of 60,000 houses, not more than £600,000 sales tax on materials is payable. Although some honorable members opposite laughed at me when I stated earlier that sales tax is at present payable only in respect of 5 per cent, of the materials used in the construction of a house, I assure the committee that the investigations that I carried out several years ago confirm that opinion. Mr. TURNBULL(Mallee) [12.5 a.m.], - The honorable member for Port Adelaide (Mr. Thompson) has made unfair criticism of the proposal. He has omitted to refer to the proposal to exempt from sales tax such items as bath heaters, earthenware bathroom fittings, towel rails and towel rail holders, various other fixtures and hot water systems. Although the Treasurer has estimated that the total saving to the people will be £1,000,000 a year, I consider it will be nearer £3,000,000 as it depends on the number of homes we can build. The honorable member for Melbourne (Mr. Calwell) waved his hands about and treated the committee to one of those comic opera speeches for which he is becoming known in this chamber. He stated that the Labour party when in office had granted reductions of sales tax. The real point is that if the Labour party had met with the approval of the people it would still be in office but it was defeated. The honorable member mentioned Neon signs. I remind the committee that when Labour was in office there was not even sufficient electric power available in Melbourne and Sydney to keep those signs illuminated. Not one Neon sign could be seen flickering, because they were banned. It did not make any difference at that time whether sales tax was imposed on Neon signs or not, because if people could not use them they would not buy them. Mr. BRYSON(Wills) [12.7 a.m.].The honorable member for Mallee (Mr. Turnbull) has spoken about £1,000,000 being saved. Mr. Turnbull.-I said £5,000,000. Mr. BRYSON.- That makes his contention five times worse, because according to the Treasurer (Mr. Fadden) the complete list of exemptions from sales tax will mean a saving to the people of £1,000,000 for a full year and £640,000 this year. He was apparently referring to rabbits instead of sales tax. To show how far off the beam the honorable member was, I point out that he did not mention the following items not used in connexion with the building of houses, on which sale3 tax has been removed, which are enumerated in clause 4: - (6a) Cane lifts and other machinery, implements or apparatus for use exclusively or primarily and principally in the loading or unloading of sugar cane: (15) Fencing wire strainers; (15a) Fencing tools for use in agricultural industry; (46) Stump and tree extractors and grubbers; lifting jacks for use in agricultural industry; 9. - (49) Waggons, drays, spring drays and trailers for use in agricultural industry, but not including motor trucks or other self-propelled vehicles or semi-trailers; 4. - (1) Plants, seeds and similar goods, namely, plants, trees, tree stocks, root stocks, budding and propagating wood bulbs, seeds, pulse and mushroom spawn, but not moulding edible fruit, vegetables or nuts; (2) Fertilisers and raw materials for use in the manufacture of fertilisers. (1) Sauces and relishes (including mustard, mayonnaise and salad dressing, whether liquid, semi-liquid or dry. (6) Macaroni (including macaroni fancy pastes), spaghetti (including egg spaghetti) and vermicelli; (7) Processed wheat or other processed grain for use for culinary purposes. 34a. Ice and solid carbon dioxide. (2) Coffee . . . (3) Cocoa . . . (4) Instant postum, Kwic Bru Coffee and other similar preparations for potable use which are made principally from cereals or cereal products. It is apparent that either the honorable member has not read the bill, or that, if he has, he did not understand it. When the honorable member for Port Adelaide (Mr. Thompson) suggested that there will be a saving of 5 per cent. in the cost of housing because of the reductions of tax proposed by this measure, he was too liberal, because there will not be a saving of 1 per cent., for the reason that as far as housing is concerned the reductions to be effected are practically infinitesimal. I should like to know from the Treasurer why, whilst certain household electrical fittings, accessories and parts therefor, which are to be used exclusively or primarily and principally as part of electrical installations in houses, are to be exempt from sales tax, bell equipment, burglar alarms and fire alarm equipment, and electric light globes, lamps and tubes are to remain on the list of goods subject to tax. I consider that if it is reasonable to exempt from sales tax electrical installations being put into new homes, then electric light globes, which are necessary for use in conjunction with such electrical fittings, should not still be subject to tax. Why have certain luxury lines been exempted from tax, such as - (1) Wreaths and covers and mounts for wreaths. (2) Floral tributes (including bouquets, posies, floral baskets and sheaves), containing natural flowers. Those are all luxury lines. There are so many contradictions in this clause that the committee is entitled to some explanation of how the Treasurer arrived at the decisions that are incorporated in it. The clause is a mass of contradictions. The Treasurer's stated reasons for the introduction of the bill are contradicted by almost every item in this clause, so I should like to have some reasonable explanation of it, if there is one. Mr. FADDEN(McPherson- Treasurer) [12.11 a.m.]. - The reason for the proposed exemptions and increases of rates, is that the Government has decided accordingly. Mr. CLYDECAMERON (Hindmarsh) Fadden) re-consider the matter of the incidence of sales tax of Land Rovers purchased by shearers? I mentioned this matter in my second-reading speech and referred in error to those vehicles as station wagons. I apologize for the error. Why has a shearer to pay tax on a Land Rover when other people can purchase them tax free? Will the Government give consideration to allowing shearers who need Land Rovers specifically for the purpose of following their occupation to purchase them tax free? Mr.FADDEN (McPherson- Treasurer) [12.14 a.m.]. - It is a pity that the honorable member was not in the chamber when I replied to the second-reading debate, because I explained that Land Rovers are exempted from tax when they are purchased for use by primary producers, principally or exclusively for agricultural pursuits. That position does not apply to the shearer. However, I shall re-examine the matter and see whether any action can be taken when the sales tax is next reviewed. Mr. ClydeCameron. - All I want to say is that the shearer uses the vehicle only to follow his occupation in a primary industry. Mr. FADDEN.- So does a baker who delivers bread. Amendment (by Mr. Fadden) agreed to- That, in paragraph (m), proposed sub-item (7) be left out with a view to insert in lieu thereof the following proposed sub-item: - " (7) Cere-creme, Cerevite, Eycena, Rycola, Vigorice, and similar products for use for culinary purposes (Nos. 1 to 9) Clause, as amended, agreed to. Clause 5 agreed to. Clause 6 (Third schedule). The Third Schedule to the Principal Act is amended by omitting all the words before Division XIII. and inserting in their stead the following division: - Division I. - Musical, Band and Orchestral Instruments. 1.Musical, band and orchestral instruments (and accessories and parts therefor) including (S)Wireless receiving sets and combined wireless receiving and gramophone sets ; record players and pickups. Amendment (by Mr. Fadden) proposed - That, in proposed Division 1, item 1, sub-item (3), after the word "sets", second occurring, the following words be inserted: - " but not including batteries therefor ". Mr. CALWELL(Melbourne) [12.16 a.m.]. - The Treasurer's proposal is completely impracticable. He proposes to exempt from taxation batteries for radio sets that will operate in country districts, but purchasers of batteries for radio sets used in city areas are to pay sales tax on them. How can the Wireless Branch of the Postmaster-General's Department possibly administer a provision of this sort? As a person who lives in a country district not served by electricity may buy a battery for a wireless set tax free, obviously all that people who live in city areas which are not regarded as areas not served by electricity have to do to obtain such batteries tax free, is to go to the prescribed areas and buy batteries tax free for use in the city. This provision is just a foolish and fatuous attempt to pretend that the Government is giving some advantage to a person who has a radio that is not served by electric power. Mr. FADDEN(McPherson- Treasurer) [12.18 a.m.]. - There is only one thing wrong with the remarks of the honorable member for Melbourne (Mr. Calwell), and that is they are not correct. This sub-item causes tax to be payable at the rate of 25 per cent, in respect of wireless receiving sets and combined wireless receiving and gramophone sets, as well as batteries for use therewith. It has been represented that the taxing of batteries at this rate will operate to the disadvantage of people who live in areas not served by electricity and who depend upon batteries to operate their radio sets. Persons living in city areas do not need such batteries and obtain power for the operation of their sets from electricity which is not subject to sales tax. In order to remove this anomaly, it has been decided to exclude batteries for radio sets from the Third Schedule and thus to allow them to remain taxable at the general rate of 8$ per cent., as was the case prior to the introduction of this bill, which refers to all parts applicable to radio sets. Amendment agreed to. Mr.CALWELL (Melbourne) [12.19 a.m.]. - The committee will realize that in division 1, musical, band and orchestral instruments are to be subject to various rates of tax that will not be uniformly borne. Purchasers of wireless receiving sets already pay £600,000 in sales tax, and under the new provisions will pay another £1,200,000 in tax. Radio sets have now become a luxury for old-age pensioners, for the small farmers and for those who want to listen to the broadcasts of the proceedings of the Parliament. The impost will not, of course, affect wealthy graziers and others who are represented by the " hill-billies " in the corner. Unless we encourage the radio industry, we shall not get television in Australia, and if we do not get television within a few years, it will not be possible to organize the construction of radar equipment for defence purposes. The raising of the sales tax by 200 per cent, on these items will cause a number of industries to curtail staffs. The Government proposes, in effect, to use this measure as a means of introducing industrial conscription. It hopes to force workers out of the radio factories into the brickyards, or to work for low wages for wealthy graziers. Honorable members opposite laugh and screech, but they will not have an opportunity for much longer to screech like cockatoos. This also deals . with such articles as pianolas, gramophones, radio receiving seta, records for gramophones and phonographs, drums, cymbals, chimes, triangles, and other musical instruments. Altogether, it covers about 150 different musical instruments, and the increased sales tax is estimated to return an extra £300,000. I should have thought that was too little for the Treasurer (Mr. Fadden) to worry about. Mr. Gullett.- He is doing his best. Mi-. CALWELL. - Yes, he is doing his best with his limited ability, and with the help of the limited ability of his supporters. The total estimated revenue to be raised under the third schedule to the bill is £1,500,000, as compared with £750,000 being raised at the present rates of tax. The Treasurer is mistaken if he thinks that his party will achieve any political advantage out of these increases. I do not usually take much notice of what the honorable member for Mallee (Mr. Turnbull) says, but I recall that he declared that £1,000.000 whs being saved to the people of' Australia. Conversely, £10,000,000 is being filched from them, and the clause now under consideration provides for the filching of £1,500,000 of that £10,000,000. Clause, as amended, agreed to. Clause 7 (Fourth schedule). Mi:CALWELL (Melbourne) [12.25 a.m. j. - On most of the items in this schedule sales tax is to be increased from Si per cent, to 33$ per cent. Only on jewellery and imitation jewellery, and a few other items is the tax to be raised from 25 per cent, to 33$ per cent. Item 4 of the schedule covers toilet and beauty preparations. Sub-item (3) covers nail polishes and lacquers, lacquer and polish removers, hand creams and lotions, and similar preparations. Item 7 includes articles made wholly or principally of furskin. The other items in the schedule at present bear a tax of S$ per cent., and should never have been included in this classification. For instance, there are included such articles as the baskets made by blind persons and others for sale to harassed housewives for use when shopping. It also includes this miserable string bag that I hold in my hand. It is to bc taxed at the rate of 33$ per cent. I ought to decorate the Treasurer with it. He is going to tax it at the rate of 33$ per cent, in order to stop inflation. If it were practicable I should ask permission to have the string bag incorporated in Hansard. As someone has remarked, it is just a number of holes joined together by string, and the demon of inflation could easily escape from it. Sub-item (8) of item 1 includes such extraordinary examples of allegedly epiceuran taste and luxury living as tooth picks, which are to be taxed at the rate of 83 :V per cent. It also includes lighters for cigarettes, cigars or pipes and, of course, shopping and knitting bags. Indeed, anything that looks like a bag has been included. Mr. Turnbull.- Including rat-bags? Mr. CALWELL.- They are in the Australian Country party corner, and I am looking at them now. Fountain pens have now become a luxury. Practically every one in the community uses a fountain pen, even schoolboys and schoolgirls; but, under the terrible threat of inflation parents will have to pay sales tax at the rate of 33$ per cent, on the pens their children use. Other articles mentioned in the sub-item are serviette rings, book ends, book marks, collar boxes, gold and silver safety pins, and self-propelling pencils, all of which are to be taxed at the rate of 33$ per cent. The Treasurer has told us that the impost is necessary because the Government must meet additional defence expenditure. The Government has chosen to expend £50,000,000 this year on stock-piling defence materials. The expenditure could well have been spread over a number of years. There is no need for the savage imposts that the Government proposes. We have been told that the Government must find £67,000,000 with which to pay war gratuities, but £37,000,000 was collected for that purpose by the .previous Government. Mr. Fadden.- It is non-existent. Mr. CALWELL.-It does exist. The people paid the money in taxes. Mr. Fadden.- They paid it, and the Labour Government used it. Mr. CALWELL.-The Government is faking its budget figures in an attempt to justify what it is now proposing to do. We intend to put the Government on the spot, and to keep it there. We shall enjoy hearing honorable members who are supporting this proposal explaining to their electors why they slugged the children and took it out of the housewives and the poorer sections of the community. The Treasurer talks about communism, but that is now merely another matter like King Charles's head. As an issue it is so dead that it is no longer of any value even as a political stalking horse. We shall make honorable members on the Government side answer for this bill, which will be one of the nails that Labour will drive into the Government's political coffin. Mr.DUTHIE (Wilmot) [12.31 a.m.]. - I shall not speak on this measure at such a length as was taken by the. honorable member for Melbourne (Mr. Calwell). I merely want to mention one or two points. Among the items to be taxed at 33$ per cent, are cameras, photographic enlarging and reducing apparatus, photographic negatives produced for sale, transparencies and reversals, sensitized film, cards, board, linen and other sensitized materials. All those materials are used in the one industry, that is in the photography business. I regard the imposition of a heavy sales tax on all those articles as one of the most vicious attacks on one form of industry that is to be found in this iniquitous measure. The photographers, particularly those who conduct one-man businesses, will suffer severely through the increase of sales tax. Their photography businesses are their sole means of earning a livelihood yet this Government is placing a sales tax of 33$ per cent, on almost all the materials that they use. I feel that all the one-man photography businesses throughout Australia will suffer severely when this measure becomes law. Last Saturday a man who conducts such a business visited- me in Launceston and told me that the 33$ per cent, tax will be a terrible blow to him. The Government does not appear to be one scrap concerned about these men ; it is no more concerned about photographers than it is about wool-growers and others. I ask the Treasurer (Mr. Fadden) seriously why these men should be singled out for attack, and I should like him to answer seriously. Probably, as the honorable member for Parkes (Mr. Haylen) says, if he does answer the answer will be in the negative. But this is a serious matter and I should like him to tell the committee why he has selected the photographer for this attack. Mr. FADDEN(McPherson- Treasurer) [12.33 a.m.]. - It is unfortunate that the honorable member for Wilmot (Mr. Duthie) did not read the bill a little more carefully, because professional photographers will not have their eqUiPment taxed under it. The honorable member has my assurance that the cameras of professional photographers will not be taxed under this bill. Mr. WARD(East Sydney) [12.34 a.m.]. - The criticism that I intend to offer on this clause could be offered on any clause of the bill. The Treasurer (Mr. Fadden) has said that he intends to increase sales tax so as to reduce the use of certain items by the community because they are luxury items. The fairest method of doing that, if it was really the intention of the Government to divert labour to what it regards as more essential industries, was to prohibit completely certain classes of manufacture. By increasing the tax as is contemplated by this measure the only people who will be penalized will be those on the lower incomes. People with substantial incomes will not be debarred from making purchases of the heavily taxed items. They will be able to buy such goods whatever the cost. If the use of heavily taxed articles decreases it will be because those on the lower incomes cannot afford to purchase them. Therefore, this legislation is aimed directly at the workers. If the Government believed that it was necessary to conserve man-power, the fairest way to do so would have been by a prohibition of the manufacture of what the Government considered to be luxury goods. Mr. MoMahon.- Under what constitutional power can the Government prohibit the manufacture of any goods? Mr. WARD.- Powers exist if the Government wants to use them. Certain powers were used by other governments in times of national crisis, and the manufacture of certain articles was prohibited. Mr. Osborne.- The prohibition was made only under the defence power. Mr. WARD.- I understood the honorable member to say that a state of cold war existed. No doubt Judge Berne was not sure of the exact position when he asked during recent court proceedings for a clear statement of our position with regard to the war in Korea. Mr. McMahon,- That is not so. The DEPUTY CHAIRMAN (Mr. Ryan). - Order! The honorable member for East Sydney is getting a little away from the clause under discussion. The honorable member should deal with the clause. Mr. WARD.- With respect, I suggest that what I am saying is connected with the clause because the question of power is involved. If the Government's earlier statement that a state of war now exists is correct, then the Government has power to ban the manufacture of certain goods. If no state of war exists, then many of the acts of the Government in recent times were completely unjustified. The DEPUTY CHAIRMAN. - Order! The honorable member must address the committee on the clause under consideration. Mr. WARD.--With all due respect to you, Mr. Deputy Chairman, I have not. taken up much time on this matter. In my opinion, the Government, in this measure, has introduced a piece of class legislation. Honorable members on this side of the committee are often accused of trying to maintain class antagonism, but I submit that this measure is a piece of classlegislation because it proposes to penalize only one section of the community. Surely it will not be argued .that all the items enumerated here by the Treasurer are luxury items. Mr. Fadden.- Nobody used the word " luxury ". Mr. WARD.- That is the term that the Treasurer used in his second-reading speech, and at an appropriate time I shall refer him to the particular part. In the schedule of items to be taxed there is one upon which I fmd myself in complete agreement with the Government; that is, if the item refers to what I believe it refers to. The item is " transparencies and reversals ". Surely, that could not refer to anything but Government policy. Mr. TURNBULL(Mallee) [12.38 a.m.]. - I desire briefly to refer to the great play made by the honorable member for Melbourne (Mr. Calwell) on the string bag. Before Labour came to power in this country goods were delivered to the housewife and the string bag was unknown. After Labour assumed office the womenfolk throughout the country began to trudge along to the shopkeepers and carry loads of household requisites back to their homes. Then came the era of the string bag. Mr. CALWELL(Melbourne) [12.3!) a.m.]. - The Treasurer (Mr. Fadden) should withdraw this clause and briny: down an excise or a customs duty of say £10 or £20 a ton on newsprint used by the metropolitan dailies. That would bring him in a lot more money than he can get by this measure, and it would be a much fairer tax and would be borne by thu people who are best able to bear taxation. Mr. THOMPSON(Port Adelaide) [12.40 a.m.]. - The items included in the fourth schedule include "decorative candles ". I should like to know whether the small candles that children have on their birthday cakes are included in that definition. Mr. FADDEN(McPherson- Treasurer) [12.41 a.m.]. - I think that the candles to which the honorable member for Port Adelaide (Mr. Thompson) has referred would be included. Probably they are of the kind that was placed on pink icing before its use was prohibited at the instigation of the former honorable member for Corio, Mr. Dedman. Mr. BRYSON(Wills) [12.42 a.m.].Included in the items to which the sales tax at the rate of 33$ per cent, is to apply are powders of various descriptions. I should like to know whether baby powders are included. Mr. DUTHIE(Wilmot) [12.43 a.m.]. - One item that I am astonished to see made the subject of this vicious increase is " lantern, screen, and camera slides ". Lanterns are widely used by churches of all denominations to illustrate lectures on various subjects such as mission work, and I am wondering why they have been classed as a luxury item. Mr. FADDEN(McPherson- Treasurer) [12.44 a.m.]. - It is a pity that the honorable member for Wilmot (Mr. Duthie) does not try to exert the same influence over members of his own party as he is endeavouring to exert over me. Hie item to which he has referred was subject to the sales tax when the Labour party was in office. Amendments (by Mr. Fadden) agreed to- That, in proposed item 3, sub-item (1) be left out, with a view to insert in lieu thereof the following sub-item: - " (1) Travelling bags, brief bags, kit bags exceeding eighteen inches in length, gladstone bags, bookmakers' bags, hat boxes, trunks, suitcases, dressing or toilet cases, attache cases exceeding eighteen inches in length, writing or letter cases, music cases, sporting cases and bags, regalia cases, lunch cases exceeding twelve inches in length, hat cases, satchels, grips, sewing bags and cases, sleeping valises and bags, but not including school bags or cases.". That, in proposed item 4, sub-item (12), be loft out. Mr. BRYSON(Wills) [12.45 a.m.].I have asked the Treasurer a question about baby powders, and I should like it to be answered. I ask the right honorable gentleman again whether baby powders are to be subject to a tax of 33$ per cent. Mr. FADDEN(McPherson-Treasurer) [12.46 a.m.]. - I have already informed the honorable member that, in accordance with the policy of the Government, such powders have been included in this classification. Mr.BEAZLEY (Fremantle) [12.47 a.m.]. - The question asked by the honorable member for Wills (Mr. Bryson) was whether the powders mentioned in this schedule include baby powders. That is not made clear in the schedule. I suggest that the Treasurer (Mr. Fadden) should answer that question. Mr. FADDEN(McPherson - Treasurer) [12,48 a.m.]. - I have already answered that question adequately. I have said that baby powders are included in the 33$ per cent, classification. I cannot say any more than that. Clause, as amended, agreed to. Title agreed to. Bill reported with amendments ; report -by leave - adopted. Bill - by leave - read a third time. 2770 bill (Nos. 1 to 9) 1950. In Committee of Ways and Means:Consideration resumed from the 12th October (vide page 796), on motion by Mr. Fadden - (1.) That, on and after the thirteenth day of October, One thousand nine hundred and fifty, in lieu of the sales tax imposed . . . sales tax. be imposed at the following rates . . .. ( nida page 790 ) . Questions resolved in the affirmative. Resolutions reported. Standing Orders suspended ; resolutions adopted. Ordered - That Mr. Fadden and Mr. Spender do prepare and bring in bills to carry out the foregoing resolutions. Motion (by Mr. Fadden) - by leave - agreed to - That so much of the Standing Orders be suspended as would prevent questions in regard to the first and second readings, committee's report stage and the third readings, being put in one motion covering several or all of the Sales Tax Bills Nos. 1 to 9, and the consideration of several or all of such bills together in a committee of the whole. Bills (Nos. 1 to 9) presented by Mr. Fadden, and passed through all stages without amendment or debate. 2770 bill Bill returned from the Senate without amendment. 2770 bill Bill received from the Senate and (on motion by Mr. Fadden) read a first time. 2771 adjournment 2771 Motion (by Mr. Fadden) proposed - That the House do now adjourn. 2771 12:55:00 009MA Lowe 0 0 MCMAHON, William Mr MCMAHON . - I rise to correct any misapprehension that might have been aroused in the minds of honorable members as the result of a question that the honorable member for Melbourne (Mr. Calwell) asked relating to the formation in Sydney recently of a company known as Mainguard (Aust.) Limited. It is desirable that honorable members should know more about that company. It has a nominal capital of £5,000,000, of which £1,000,000 has been called up. Of the latter capital approximately £600,000 has been provided by purely Australian companies that have been in existence for many years and in which practically all the shareholders are Australians. In respect of the balance of shave capital of £400,000 that has been called up, the five directors have bought and now hold approximately 135,000 shares whilst the remaining shares are held by members of the public. Not one of the shareholders is a foreigner. An examination of the register of the company will show that only 100 shares arc held outside Australia and that they a re held by an investor who lives in New Zealand. The value of the shares has been fixed at 5s., in order that persons of small means may acquire shares in what will be a prosperous company and may add to the financial strength of the community. The average individual holding is 1,100 shares of a value of £275. Recently, the register of the company was compiled, and the honorable member for Melbourne may examine it and ascertain for himself who the shareholders are. I have explained these facts because the honorable member's question may have given the impression that the company was formed to represent foreign interests. That is not correct. I also make it clear that no overseas funds whatsoever arc invested in the company. Consequently, it cannot he said that it is holding " hot " money that has been sent to Australia in the expectation that the Australia. £1 will be appreciated, in which event the money would be repatriated. The information on which the honorable member based his question is incorrect. The company will fulfil a national function of great significance. In 1931, Lord Macmillan, one of England's most distinguished commercial lawyers and a member of the Judicial Committee of the Privy Council, presided over a committee on finance and industry at the request of the British Parliament. That committee inquired into the British financial system and recommended unanimously that the outstanding need of British industry was the development of organizations like Mainguard (Aust.) Limited to act as intermediaries between industry and investors and to perform in the interests of British industry functions which up to that time had been performed by merchant banking and issuing houses, most of which, however, were owned and controlled by foreign interests. That committee recommended the formation by British interests of companies of the type of Mainguard (Aust.) Limited. Such companies were formed first in Lombardstreet, London, and later in the United States of America, and Mainguard (Aust.) Limited represents the first company of that type to be formed in Australia. The company will pei form a very useful function. First, it will operate as a financing house, tha is, as an intermediary between investors and industry. Any investors who wish te establish industries and who are in need of capital will be able to obtain the best advice possible from it. The -company will underwrite the capital of new undertakings which, it believes, will have a good chance of succeeding. On behalf of proposed new undertakings it will conduct investigations of potential local demands, advise with respect to the most suitable locations for new ventures and generally provide advice to enable new companies to get on their feet with the least possible delay and with the greatest possible chance of success. 2771 BV8 0 0 CALWELL, Arthur Mr Calwell - Why did it get rid of the journalists whom it sacked? 2771 009MA 0 0 MCMAHON, William Mr McMAHON - I shall come to that. Activities of that type were discussed and strongly applauded by the Royal Commission on Monetary and Banking Systems in 1934. The licence to publish Smith's Weekly has been sold to another newspaper, and the newsprint and machinery have been disposed of, so that this company will, in no circumstances, compete in the newspaper world in Australia. It will be, as I have said, purely a financial corporation which will fill a gap in the Australian financial machinery. As the Leader of the Opposition (Mr. Chifley) said in his speech on the Commonwealth Bank Bill, Australia has never had a mature money market. In other words, the right honorable gentleman indicated that we have never had a short bill market or open market operations in Commonwealth bonds, notwithstanding that the whole paraphernalia for a mature money market exists in this country. The company will remedy one of these deficiencies. Ear from making this company the object of innuendo and suspicion and seeking to damn it at birth we should give it the greatest possible encouragement. The directors are men who have attained outstanding success in the Australian business and commercial world. They are men of integrity, and, what will not be understood by the honorable member for Melbourne, men of complete honesty. 2772 BV8 0 0 CALWELL, Arthur Mr Calwell - I ask for a withdrawal of that filthy observation. 2772 10000 0 0 DEPUTY SPEAKER, Mr Mr DEPUTY SPEAKER - As the honorable member for Melbourne objects to that statement, it must be withdrawn. 2772 009MA 0 0 MCMAHON, William Mr McMAHON - I withdraw it. 2772 BV8 0 0 CALWELL, Arthur Mr Calwell - And still defend this new collection of vultures. 2772 009MA 0 0 MCMAHON, William Mr McMAHON - I believe that this company will fill a long-felt want during a period in which we can expect rapid industrial development. It will provide finance and technical assistance; it will place many businesses on a sound basis, contribute to future industrial development, help to maintain full employment, and add to the prosperity of this country. 2772 KEE Chisholm LP 0 0 KENT HUGHES, Wilfrid Mr KENT HUGHES . - Last week I referred to the railway strike in Victoria and South Australia. Since then the situation has altered and whilst the strike in South Australia has ended, unfortunately there seems to he a complete deadlock in Victoria. I understand that the Victorian Government has supported the chairman of the Victorian Railways Commissioners in insisting on the following courses of action : - 1 ) That the union claims must he referred to the Commonwealth Arbitration Court for settlement; That the Victorian Railways Commissioners will not oppose the original, as distinct from the subsidiary, claims made by the unions if those claims arc so referred to the court or to a conciliation commissioner. "Whether that is right or wrong is not at issue at this stage. The third point was - The Government and the chairman have insisted on the claims made by the two unions, the Australian Railways Union and the Australian Federated Union of Locomotive Enginemen, being treated as a whole instead of on a separate basis. There may have been some justification for the insistence on those points at an earlier stage of the dispute. I understand that the Australian Federated Union of Locomotive Enginemen has now referred its claims to the court or to a conciliation commissioner, and that the Australian Railways Union has not done so. I ask the Government whether the Victorian Government and the chairman of the Victorian Railways Commissioners are within their rights under the provisions of the act in insisting that the separate claims shall be treated as an indivisible whole. T do so because I believe that that trifling point is one of the main obstacles which prevents a settlement of the strike. 2772 KNM Blaxland ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON . - I wish to make one or two observations in regard to the strike in order that the public and the members of this House may view the facts in proper perspective. The Australian Federated Union of Locomotive Enginemen regrets very deeply the inconvenience that has been caused to the public as a consequence of the strike. It is concerned particularly with the grievous damage that has been done to what should be a flourishing State. The press has published all sorts of statements in an attempt to fix the responsibility for this dispute. All I wish to say on that aspect of the dispute is that as a consequence of an incident that occurred in Victoria an effort was made by the Victorian Railways Commissioners to settle a dispute which had arisen in regard to overtime, and which has assumed great proportions. The overtime worked by train crews, including engine-drivers and firemen, is greater to-day than it was in war-time. The Australian Federated Union of Locomotive Enginemen endeavoured to overcome the problem of overtime by encouraging men to enter the service. A considerable time ago it lodged applications for increased pay for those on the lower grades in an attempt to attract more men to the railways service in those grades. The commissioners opposed the application and it was rejected. Early in September both unions "were concerned about the subject of overtime. Early in September the Australian Federated Union of Locomotive Enginemen held a State conference, following a similar conference by the Australian Railways Union, and thereupon, submitted to the Railways Commissioners that the time had arrived when something had to be done to meet the overtime problem. The .commissioners agreed that something should be done and arrived at a formula under which .all overtime was to be paid for. They agreed that passive time, as distinct from operative time, should be taken into account for the purpose of calculating overtime payments. They insisted that both unions should confirm in writing the terms of settlement. On the 14th September, after consultation with rank and file members, the general secretary of the Victorian division of the Australian Federated Union of Locomotive Enginemen sent to the commissioners the following letter : - The union, through its annual conference, directs mc to indicate that the present dispute is to be settled on the basis discussed between us, i.e., that the necessary variation of Federal Award No. 2GS of 1945 be agreed to between the parties providing for the abolition of passive time and the payment of overtime at the rate of time and one half for all time on duty in excess of eight hours up to and including eleven hours on duty and double time thereafter on any shift. That was a complete settlement of the dispute as far as the Australian Federated Union of Locomotive Enginemen was concerned, but the commissioners insisted upon both matters being referred to the court simultaneously. The Conciliation Commissioner, Mr. Hall, in the first line of his judgment in which he referred to what had been agreed upon by the parties, said - The application is consented to by the Victorian Railways Commissioners. However, after dealing -with the case extensively in 24 pages of typescript he then said - Insofar as the application seeks the payment of overtime rates after eight hours' work on any shift, it is refused because the existing margins include consideration therefor, and for the additional reasons stated in the foregoing review. He did not review the existing margins. No marginal case was before him. The commissioners did not raise the subject of margins. They said that they wanted the matter to be settled in the public interest. At that point, however, Mr. Hall made no reference to the public interest. Instead, he found ways and means of rejecting an agreement which had been reached between the commissioners and the unions. And on that part, neither of the two unions was on strike. But, as a consequence of Hall's attitude, a strike occurred immediately. The Australian Federated Union of Locomotive Enginemen referred the matter to its members, and at a stop-work meeting, only 83 out of 2,800 men voted for a return to work. That was the position. The matter was referred again to Hall, not by the unions concerned but by the Railways Commissioners, with an appeal that their request be acceded to in the public interest, and that the award be varied in accordance with the original claim. Government supporters interjecting, 2773 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - It is all very well to blame the Australian Railways Union and the Australian Federated Union of Locomotive Enginemen for the strike. I refer Government supporters to the transcript of the proceedings 'before the conciliation commissioner, Hall, on the 17th October last. The men were on strike, and Hall was asked this question - Would it not have been better to accept our interpretation of public interest? He replied - No, I felt convinced you would do what you have done. I am not surprised at what has happened. Hall was convinced, when he made his decision, that the men would go on strike as a result of it. That was the second time of review. The next step in the dispute was taken by the Railways Commissioners on an application to have the agreement filed under section 37 of the act. Hall said, in the first instance, that he did not have jurisdiction in the matter, and would refer it to the court. He did not do so. Later, he was convinced that he had jurisdiction, but he said, "If I had the jurisdiction I still would not do it ". The commissioners then conferred with the unions concerned, and the two parties signed an agreement, which was filed with the court. However, that tribunal declared that it had no jurisdiction, because the matter was one for the conciliation commissioner to determine. On the third occasion on which Hall dealt with the matter, he said that it was the la9t time he would do so. During the hearing, two points became apparent that staggered the trade unions in this country. 2774 KZP 0 0 WHEELER, Roy Mr Wheeler - When will the " choochoos " run again? 2774 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - When some common sense is brought to bear on our problem. 2774 KYB 0 0 PITTARD, Alan Mr Pittard - Leave it to Brown of the Australian Railways Union. 2774 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - It is all very well to try to associate me with Brown, but I am dealing with a purely industrial problem. If Government supporters cannot separate such an industrial problem from their party political out look, they are heading for a good deal of trouble. I shall now deal with a matter that is agitating the minds of railway employees. Hall said, in reply to me on the 17th October- We had a conference of Conciliation Commissioners on Monday morning in Sydney over this matter of endorsing consent agreements. There has been a number of matters before Conciliation Commissioners consented to by parties, which the Commissioners have refused to endorse or embody in awards. They have not been given publicity because the .parties have been told there that they can pay if they like but it will not be put in an award. That statement affects all railway employees. A point was reached when Hall was under fire from the railways commissioners, not the unions concerned, and he said to the representative of the commissioners - How did you get into a position of letting yourselves make up your mind in regard to this matter, when, as late as May, 1949, you agreed with all your brother commissioners in New South Wales, Tasmania and South Australia that, in regard to these matters of general principle, you would stand shoulder to shoulder together ? Therefore, railway men are confronted with the position that, before they may expect any improvement of their conditions by agreement in future, the railways commissioners of several States must be in agreement on the matter. But even then, a conciliation commissioner may decide that the employees shall not receive an increase of salary or be granted improved conditions. Finally, the stage was reached in the dispute when the door was slammed on the Australian Railways Union by Hall. 2774 KZP 0 0 WHEELER, Roy Mr Wheeler - Should not the honorable member refer to him as " Mr. Hall " ? 2774 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - Yes, I suppose I should. 2774 KWJ 0 0 TRELOAR, Thomas Mr Treloar - Socialism breaking down. 2774 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - No. The Australian Federated Union of Locomotive Enginemen recognized that the door of conciliation and arbitration had been closed to the Australian Railways Union. We attempted to have the matter placed on a proper basis, so that a settlement could be reached. I made an attempt, on behalf of the Australian Federated Union of Locomotive Enginemen, to achieve a settlement by conciliation and arbitration. [Extension of time granted]. I was astounded to find that the Railways Commissioners of Victoria were not prepared to approach the matter on that basis. I hope, even at this late hour, that common sense will prevail. The Australian Federated Union of Locomotive Enginemen is prepared to follow the trail of conciliation and arbitration in order that the dispute may be settled ; but, to date, it has not been allowed to proceed in that manner. It is prepared, if the conciliatory approach is made, to do the utmost in its power to start the wheels rolling in Victoria at the earliest possible moment. Government supporters interjecting, 2775 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - I shall remind Government supporters of a saying that I heard at my mother's knee, which I hope will convey a lesson to them. It went - Give a thing, take a thing, It becomes the devil's own plaything. That has happened in this dispute. The members of the Australian Federated Union of Locomotive Enginemen were not on strike against an agreement that had been reached with the railways commissioners. However, they say that they will not pay the additional money unless they have some authority to give it the official imprimatur. We are prepared to reach a settlement under Part VII. of the Commonwealth Conciliation and Arbitration Act, or in any other way that is acceptable to the commissioners. We ask for a settlement, on the basis of the policy enunciated by the Australian Council of Trades Unions, to adjust the difficulty in a proper and orderly way. The only obstacle now is the failure of the conciliation commissioner to give the union the opportunity to reach a settlement in the way in which everybody considers it should be reached, and that is by conciliation and arbitration. 2775 JLU CP 0 0 ANDERSON, Charles Mr CHARLES ANDERSON - What about the general public, including the farmer ? 2775 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - I am just as much appreciative of the needs of the general community, including the farmer, as is the honorable member for Hume (Mr. Charles Anderson). But I emphasize that the railway men themselves made those conditions possible for the community, and it will be the railway men themselves who, at the moment they are granted the treatment which they were promised, will give all the services to the community that they have given in the past. But it is not possible to convince the employees, even at this stage of the dispute, that they have not been tricked. They will not be convinced that they are not entitled to receive the benefits which have been promised to them. We shall strive to the best of our ability, within the laws of conciliation and arbitration, to obtain for them the benefits that they have been promised. 2775 KWJ 0 0 TRELOAR, Thomas Mr Treloar - The unions concerned are outside the law now. 2775 KNM ALP 0 0 HARRISON, Eli Mr E JAMES HARRISON - They are not. I challenge that statement. The court and the conciliation commissioners have examined the dispute, and it has not been suggested that the employees should be ordered to return to work. This is a two-way traffic. The Australian Federated Union of Locomotive Enginemen will accept whatever decision is reached. The railways commissioners can settle the dispute in a moment by saying, "Very well, until this thing is determined by conciliation and arbitration we will pay you the money we promised you". It is just as incumbent upon the commissioners to do that as it is upon the union to say to the men, " Go back to work without receiving the conditions that you were promised ". 2775 10000 0 0 DEPUTY SPEAKER, Mr Mr DEPUTY SPEAKER - Order ! The honorable member's extended time has expired. 2775 01:22:00 KWP Mallee 0 0 TURNBULL, Winton Mr TURNBULL . - It seems a very strange thing that a member of the Australian Labour party should speak as we have just heard the honorable member for Blaxland (Mr. E. James Harrison) speak. Honorable members will recall that when the Labour Government introduced legislation for the appointment of conciliation commissioners, the Opposition contended that there should be contained in the bill some means by which appeals could be made against decisions made by conciliation commissioners. The then Prime Minister, Mr. Chifley, declined to agree to such provision, and no appeals whatever were allowed. A member of the Australian Labour party, who at the same time is the leader of a union, now says in this House that the laws of the country should be upheld, but at the same time he is inciting, without the slightest doubt, the members of his union to continue this strike. Like a dictator, he makes definite statements to the effect that "We will do this" and " We will do that ", and he speaks of " My union ", which shows that he is the man who, when he desires, can get the men back to work in Victoria. Only recently in the newspapers there were photographs of the Communist leader, Brown, and of the honorable member for Blaxland. The statements concerning the strike made by the honorable member for Blaxland were far more extreme than those made by the Communist leader. A mass meeting was held in Melbourne to-day, and a resolution was carried without one dissentient vote to the effect that the members of the union are dissatisfied with their executive and intend to remove them from office. Throughout Victoria some men have returned to work, What has this unfortunate strike already cost the railway men? One has only to look at the newspapers to see that it has cost them between £40 and £50 each in loss of wages and that they will receive only an additional £16 a year if they obtain all that they are fighting for. I remind honorable members that there are thousands of other railway men who, even if this strike is successful, will receive nothing extra. Those employees have lost over £1,000,000. No wonder they are now saying that they must get rid of their executive. They are saying, " We must break Brown before he breaks us ". As far as I can see, that statement also applies to the honorable member for Blaxland, and if the members of the union do not get him out before he drags them down they will regret it. Those who attended the mass meeting in Melbourne to-day knew that they must get rid of Brown and their leaders; the employees throughout the country know it, and the primary producers who wish to get their wool and wheat transported also know it. It is of national importance that the law should be obeyed. A responsible federal government, of which the honorable member for Melbourne (Mr. Calwell) was a member, appointed the original conciliation commissioners, and honorable members of this Parliament who supported that Government should not now countenance a member of the Australian Labour party, who also 'speaks as a member of a union, saying, " We will not obey the finding of a conciliation commissioner ". I believe that the time has gone when the railway employees in Victoria will accept directions from such men. I also believe that common sense will prevail within the next few days, that there will be new leaders, and that the wheels will be turning again in Victoria. The honorable member for Blaxland has stated that Mr. Conciliation Commissioner Hall should have accepted what the Railway Commissioners and the union had agreed to. That would have meant that the strike would have spread throughout Australia, and it is possible that in other States agreements would not have been reached between the railway commissioners concerned and the unions. In the interests of the people, Mr. Conciliation Commissioner Hall did not ratify the agreement, and in refusing to do so he performed a great service to the people, not only of Victoria but also of Australia. The strike was engineered by the executive of the union, and if it had won the day there would have been another strike before very long. Mr. Conciliation Commissioner Hall is to be complimented by the people of Australia. I cannot speak for this Government, but I should like it to stand firm, and to ensure that when peace in industry comes to Victoria and to Australia it will be of a permanent nature. 2777 01:26:00 JUP Bendigo 0 0 CLAREY, Percy Mr CLAREY .I would not detain the House at this hour if it were not for the remarkable statements that have been made by the honorable member for Mallee (Mr. Turnbull). Statements such as he has made are not likely to assist in the settlement of the dispute, because he has displayed an entire disregard of the facts and a very grave misconception of the actual position of the men who are involved in the dispute. It should bc clearly understood that there is no law in Australia, as far as the Commonwealth is concerned, that makes it an offence for men to go on strike. In going on strike men do not break the law. Another matter that must be understood is that those who have had any experience <> negotiations between bodies of men an<i employers will appreciate the importance of the fact that when an agreement is reached between employers and employees those who are affected by the agreement expect that it will be implemented and properly expressed. In the Victorian railways case two agreements were made. One was an agreement made between the Australian Railways Union and the Victorian Railways Commissioners, which I understand the conciliation commissioner afterwards stated was made under duress, and the other was an agreement made between the Australian Federated Union of Locomotive Enginemen and the commissioners, which was not made under duress, but which was the result of an amicable conference between the parties. In both cases the commissioners were satisfied, in the interests of the railways and of the men, that it was desirable that a principle that is in operation in every sphere of industry to-day - that overtime rates should be paid after eight hours work - should operate as far as the railways system is concerned. That is no departure from the principles observed by the Commonwealth Court of Conciliation and Arbitration. Neither is it a departure from decisions which are being made by conciliation commissioners every day of the week. It is the usual thing in respect of all awards. It is incomprehensible that it could be said at this time that it is against the public interests to apply to railway men a principle that is being applied to workers in every other industry in Australia. That is an essential point. It is entirely undemocratic and out of accordance with the methods of conciliation as practised by the Commonwealth Court of Conciliation and Arbitration and by the State arbitration tribunals, to sa-, that one section of employees in Australia is a class apart and that it should have inferior conditions in respect of overtime. For years the railway men had been endeavouring to have themselves placed in the same position as other employees in industry. Finally, an agreement was reached between the organization and their employers, without the slightest semblance of duress, at least as far as the locomotive enginemen were concerned. However, when an application was made to the court for ratification of the agreement, the conciliation commissioner, who in other spheres grants such applications by employees, adopted the remarkable attitude, which cannot be justified either by precedent or by logic, that the railway men were not entitled to enjoy that benefit. Another fact that arises from this situation must be stressed. It is that conciliation has always been regarded by most unions, if . not by all of them, as well as by many employers, as a more satisfactory way of settling disputes than arbitration. _ Conciliation enables both parties to a dispute to come together and reach an agreement to their mutual satisfaction. Consequently, when agreements are made by conciliation, there is greater contentment in industry than there is when matters in dispute are subjected to arbitration and one party or the other loses. 2777 KEE LP 0 0 KENT HUGHES, Wilfrid Mr KENT HUGHES - But in a monopoly industry, it might be against the public interests to settle disputes by agreement. 2777 JUP 0 0 CLAREY, Percy Mr CLAREY - I appreciate the point that has been raised by the honorable member for Chisholm (Mr. Kent Hughes) but, as I have already pointed out, the agreement was reached in accordance with practices and principles that had been laid down by the court, and that have been approved ever since the days of the late Mr. Justice Higgins. Had the arrangement made by the unions and the commissioners been novel and startling, and had it introduced some new principle in respect of the relations between employers and employees, the objection raised by the honorable gentleman would have had some force and I could appreciate the attitude of the conciliation commissioner. However, nothing new was introduced. A principle as old as the court itself was involved but when the agreement was reached and efforts were made to secure its endorsement by the court, that body, for reasons which I frankly confess that I cannot understand, decided that it should not be put into effect. The unions and the Railways Commissioners have done their best to settle the matter, and the commissioners have declared that the agreement ought to be sanctified by the court. Therefore, I suggest that the parties should now take the stand that, having done all that they can to have the agreement ratified, but having been frustrated through no fault of their own, they should put it into operation. By that means the understanding that was reached in conference could be implemented with honour and decency and the whole dispute could be quickly ended. Mr.FADDEN (McPherson- Treasurer) [1.34 a.m.]. - in reply - I assure the honorable member for Chisholm (Mr. Kent Hughes) that I shall bring his remarks to the attention of the appropriate Minister. Question resolved in the affirmative. 2778 papers The following papers were presented : - Arbitration (Public Service) Act - Determinations - 1 950 - Nos. 62, 63 and 64 - Commonwealth Public Service Artisans' Association; and others. , Commonwealth Public Service Act - Appointments - Department of Civil Aviation - E. B. Mulholland, J. S. O'Rourke Lands Acquisition Act - Land acquired for - Defence purposes - Beverley, Western Australia. Postal purposes - Horseshoe Creek, New South Wales. Young, New South Wales. House adjourned at 1.34 a.m. (Wednesday). 2778 miscellaneous The following answers to questions were circulated: - 2778 2778 6V4 0 0 DALY, Fred Mr Daly asked the Minister for Defence, upon notice - What are the names and classifications of the staff of the Director-General of Recruiting What are the salaries of (a) the Director-General and (b) other members of his staff? What is the name of the Recruiting Director appointed in each State? Are these Directors paid; if so, what are their salaries and what expenses do they receive? What staffs have been appointed in each State and what salaries and expenses are paid to them? What amount, as a total and in each State, has been spent by the Government on the Recruiting Campaign to 25th October, 1950, on (a) salaries, (b) newspaper advertising, (c) radio advertising, (d) broadcasts by the Prime Minister and (e) other expenses? 2778 KOL 0 0 MCBRIDE, Philip Mr McBride - The Recruiting Directorate functions for all services, Navy, Army and Air, under the direction of a Director-General who is responsible to a sub-committee of Cabinet. LieutenantGeneral Sir Edmund Herring has provided the following answers to the questions asked : - Mr. C.Banfield, Assistant Director-General; Mr. Garry Armstrong, General Organizing Secretary; Lieutenant-Colonel A. G. Oldham, Personal Assistant to the Director-General; Mr. L. B. Baxter, Clerk; Miss F. A. Nunan, Typist, Grade II. 2. (a) The Director -General is on loan from the Victorian Government and continues to be paid his salary by the Victorian Government as Chief Justice of the Supreme Court of Victoria. The Victorian Government will recover from the Commonwealth Government the amount paid for the period the Chief Justice is on loan. No additional salary is being paid, (b) Mr. Banfield is being paid as Director of the Commonwealth Loans Organization and is paid no additional salary as Assistant Director-General of Recruiting. Mr. Armstrong is paid £1,140 per annum, the same salary as he received in the Department of the Army. Mr. Baxter £562 per annum. Miss Nunan £373 per annum. Lieutenant- Colonel A. G. Oldham has been lent by his firm, Sisalkraft Distributors Company Proprietary Limited, and is acting in an honorary capacity. The Deputy Director of Recruiting in each State in - 2779 2779 2779 2779 2779 Tasmania - Administered from Victoria. Sir CharlesLatham receives no remunera tion. The others named are paid as Deputy Directors of the Commonwealth Loans Organization and receive no special remuneration for their recruiting duties. The Deputy Directors in the States and the Assistant Director-General who do not receive overtime payments, are carrying the additional executive work required for the recruiting campaign by working long hours and with very few additions to their staffs: The recruiting directorate staff is based mainly upon the Commonwealth Loans Organization staff, as it existed prior to the inauguration' of the recruiting campaign at the commencement of October. The recruiting campaign' will bear half the cost of the existing staff of the Commonwealth Loans Organization. The following now appointments of a temporary character to meet the recruiting need have been made: - Commonwealth Office, Melbourne. - Two publicity officers on loan from Melbourne newspapers: salaries (a) £24 10s. plus £2 expenses per week; (b) £23 6s. plus £2 expenses per week. New South Wales. - Two publicity officers on loan from Sydney newspapers, salaries (a) £18 plus £2 expenses per week; (b) £16 18 plus £2 expenses per week. Two supervisory officers for combined recruiting information bureau, working in shifts, salary each £626 per annum. One outdoor representative for organizing of districts committees £647. Two typists (one part-time), salary each £301 per annum. Victoria. - Publicity officer on loan from Melbourne newspaper, salary £19 4s. plus £2 expenses per week. Two supervisory officers for combined recruiting information bureau, working on shifts, salary each £624 per annum. One temporary clerk, £330. Queensland.- One publicity officer on loan from Brisbane newspaper, salary £17 4s. plus £2 expenses per week. Two supervisory officers for combined recruiting bureau, working on shifts, salary each £624 per annum. One typist, salary £373 per annum. Two switchboard attendants for combined recruiting bureau, salary each £279 per annum. South Australia. - One publicity officer on loan from Adelaide newspaper, salary £17 10s. plus £2 expenses per week. Assistant Deputy Director, £742 and one typist £373 per annum (these two officers on loan from other departments). Two supervisory officers for combined recruiting bureau, working on shifts, salary each £624 per annum. Western Australia. - One publicity officer on loan from Perth newspaper, salary £17 10s., plus £2 per week expenses. Two supervisory officers for combined recruiting information bureau, salary each £624 per annum. One typist, £301 per annum. One switchboard attendant for combined recruiting bureau, £283 per annum. Tasmania. - Nil. Administered from Victoria. 2779 2779 BV8 0 0 CALWELL, Arthur Mr Calwell asked the Postmaster- General, upon notice - 1.How many applications for telephones were outstanding at the end of each year from 1945 to 1949, inclusive? Bow many are outstanding at present? Is it intended to reduce expenditure on postal, telephone and telegraphic facilities by 20 per centum in accordance with the statement by the Minister forNational Development of the Government's policy in regard to reducing all government expenditure! Mr.Anthony. - The answers to the honorable member's questions are as follows : - 1945, 56,501; 1946, 74,546; 1947, 104,709; 1948, 121,758; 1949, 125,144. The 31st October, 1950, 113,450. 3 . No . 2780 2780 K58 0 0 O'CONNOR, William Mr O'Connor asked the Prime Minister, upon notice - Is it a fact that Australia's delegates to the United Nations will refrain from voting at the election for the position of Secretary-General? If so, does this action indicate the Aus- lian Government's opposition to the retiring Secretary-General, Mr. Trygve Lie? Is the attitude of the Government towards Mr. Trygve Lie reflected in the speeches made by its members in this Parliament, and did such speeches display antagonism and hostility to Mr. Lie? In view of the expressed opposition by the Soviet Union to the re-election of Mr. Trygve Lie, will the attitude of Australia's delegates be taken as indirectly joining in the opposition to Mr. Lie? 2780 N76 0 0 MENZIES, Robert Mr Menzies - The answers to the honorable member's questions are as follows : - On the 1st November, Mr. Trygve Lie was re-appointed by. the General Assembly for three years from the 1st February, 1951. Australia abstained from voting because it was felt that the action which the Assembly had taken might create a precedent both as regards Article 97 and certain other articles with which Australia wouldfind it hard to agree. Article 97 reads, inter alia: "That the Secretary-General shall be appointed by the General Assembly upon the recommendation of the Security Council". The honorable member will be await that the Security Council was unable to agree on a candidate. The Government is quite satisfied with the appointment of Mr. Lie as Secretary-General for a further term.