House of Representatives
23 October 1956

22nd Parliament · 1st Session

  1. House of Representatives
  2. 22nd Parliament
  3. 1956

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 1677

MINISTERIAL ARRANGEMENTS

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– I wish to announce that during the absence abroad of the Minister for External Affairs (Mr. Casey), the Minister for Defence (Sir Philip McBride) will act as Minister for External Affairs and Minister in charge of the Commonwealth Scientific and Industrial Research Organization.

page 1677

QUESTION

FLOOD DAMAGE AND RELIEF

Mr DOWNER:
ANGAS, SOUTH AUSTRALIA

– Is the Prime Minister now in a position to announce what aid will be forthcoming from the Commonwealth to South Australia for the rehabilitation of the flooded Murray areas? Will the right honorable gentleman treat as urgent the South Australian Premier’s request for a special grant in view of the damage and distress now being experienced, and the magnitude of the work ahead?

Mr MENZIES:
LP

– As the honorable member knows, the Commonwealth has already provided £50,000, on the usual basis, for dealing with cases of personal hardship. The application to which he refers, of course, goes far beyond that and gives rise to large questions which may also emerge in the case of some other States. We are examining this matter. I am not in a position to say what we will do, but we will make a statement as soon as possible.

page 1677

QUESTION

COAL

Mr BARNARD:
BASS, TASMANIA

– Will the Minister for Supply consider increasing the percentage of coal purchased in Tasmania for use in the Australian Aluminium Production Commission’s works at Bell Bay? Of the amount of 12,700 tons held in stock, 7,300 tons were purchased from New South Wales and only 5,400 from Tasmanian sources. In view of the fact that the Jubilee mine in Tasmania is producing each week 150 tons that cannot be sold, will the Minister examine the position to ascertain whether a portion of that surplus can be used at Bell Bay in order to prevent dismissals from the mine which are expected to take effect from the end of this week?

Mr BEALE:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I shall have this matter examined. My recollection is that Tasmanian coal, which it was at one time thought could be used at the Bell Bay works without being mixed with other coal, has proved to be not suitable for the furnaces. That, I think, is really the answer to the matter which the honorable member has in mind, namely, why more Tasmanian coal is not being consumed at the works. We would, of course, for obvious reasons, prefer to use Tasmanian coal. Only its suitability is in question and it is therefore being mixed with a larger proportion of coal from the mainland. However, I shall have the matter examined and let the honorable member know the result.

page 1677

QUESTION

WAUCHOPE TELEPHONE SERVICES

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– The Postmaster-General will recall that from time to time I have made strong representations concerning the need for additional telephone services to meet the long-standing demand for these facilities in the town of Wauchope. Has his attention been directed to a report in last Saturday’s Sydney “ Daily Telegraph “ of public dissatisfaction with present arrangements and the effect that the lack of telephones is having on the conduct of business at the centre, with special reference to the fact that, although some time ago additional cables were laid in Bago-road, as yet no telephones have been connected to them? Has the Minister any further information which he can give me in regard to the progress made in the work in this locality?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– The honorable member has on several occasions in the past submitted to me representations for the improvement of facilities at Wauchope. I remember informing him some time ago that it was intended to make certain cable extensions which would give some relief to the position prevailing there. I have not any information about the progress of that work up to the present or how soon relief can be expected. However, I shall ascertain the present position and advise the honorable member.

page 1677

QUESTION

COMMONWEALTH STATISTICIAN

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I should like to ask the Treasurer a question without notice. In all government publications the statistician is referred to as the Acting Commonwealth

Statistician, and he has been so referred to over a number of years. When is it intended to make a permanent appointment to that position, and what is the reason for the long delay?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The question is very well founded. As a matter of fact, the Acting Commonwealth Statistician. Mr. Carver, was seconded from the New South Wales Government service. We have been in negotiation with the New South Wales Government for some time and I think that the matter will be resolved in the near future.

page 1678

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr HULME:
PETRIE, QUEENSLAND

– I. direct a question to the Prime Minister. Is it a fact that the States incurred deficits totalling approximately £15,000,000 last financial year? Were those deficits funded by the Commonwealth Government at the Commonwealth Bank? What guarantee has been given by the States that a similar, or even worse, result will not occur this year or in future years, and has the Commonwealth informed the States that in future such deficits will be taken into account by the Commonwealth in determining financial assistance in the year following the deficit?

Mr MENZIES:
LP

– This question requires a precise answer. I will have one prepared and make it available to the honorable member.

page 1678

QUESTION

EXPORTS OF FAUNA AND BIRDS

Mr R W HOLT:
WANNON, VICTORIA · LP

– I direct a question to the Minister for Customs, with reference to representations made by me on behalf of the Australian Bird Company, of West Heidelberg. Is the Minister able to say whether licences for the export of Australian fauna and birds from Melbourne to hard-currency and other areas, which was recently prohibited by the Victorian Government, can now be granted, and, if so, in what circumstances?

Mr OSBORNE:
Minister for Customs and Excise · EVANS, NEW SOUTH WALES · LP

– L think I can answer the honorable member’s question in the affirmative. The export of birds and animals from Australia raises difficult problems, because it requires careful control. It is one of those matters in which the States have one part of the authority and i he Commonwealth has the other part, and it is a situation with which honorable members are familiar. It is the duty of the State’ to protect their birds and animals while the Commonwealth has the responsibility of controlling the conditions under which they are exported, lt used to be the practice for the Commonwealth to permit the export of birds and animals only if the State from which they were to be exported gave a permit for their export. That was found to be unsatisfactory, because birds were being bred or trapped in one State, taken to another State and exported from there. The matter is complicated by the fact that some birds and animals which are rare in one State are pests in other States. 1 recently laid it down that no bird or animal was to be exported from Australia unless the Chief Secretary or other appropriate authority of the State in which it was bred or trapped gave a certificate that it could be exported. That arrangement gives State officials an opportunity to say whether a bird or animal is rare and should be protected, or whether it need not be protected. I think the Commonwealth discharges its obligations to the States in that way. We impose rigid regulations regarding the physical conditions .under which birds or animals may be exported. They relate to the sizes of the cages, the padding and matters of that sort. I hope that this new arrangement will work satisfactorily.

page 1678

QUESTION

IMPORT LICENSING

Mr WIGHT:
LILLEY, QUEENSLAND

– I address a question to the Minister acting for the Minister for Trade. The Minister will recall that some months ago I wrote a letter to him in which were set out certain allegations about trafficking in import licences and the methods employed by certain business concerns to lessen the impact of import restrictions upon their operations. I now ask the Minister: Have steps been taken b) the Government to close the loop-holes that existed in the system? Does he consider that trafficking in import licences or the dishonest use of import quotas is still being indulged in?

Mr McMAHON:
Minister for Primary Industry · LOWE, NEW SOUTH WALES · LP

– I remember that the honorable gentleman wrote to me about this matter and that subsequently I had personal discussions with him. I have taken a great interest in it because of the amount of publicity it has received. I am glad to be able to inform him that, in -my personal opinion and in the opinion of the department, trafficking is of negligible proportions. In other words, I am firmly convinced that much more has been made of this problem than the facts justify. 1 am supported in this belief by the fact that the two Australia-wide organizations which have the greatest knowledge of these things - the Associated Chambers of Commerce of Australia and the Australian Council of Retailers - have informed me that they believe that trafficking in licences is of negligible proportions and that it is not practicable to do very much about it. I mention that because I think it should be reported to the House. The department is watching the position carefully. If it finds any evidence of trafficking, it will take what action it thinks should be taken in the interests of the country. May I say that if people do make allegations of what might be regarded as improper conduct, it is up to them to supply us with the facts so that an adequate examination of the allegations can be made?

page 1679

QUESTION

EMPLOYMENT OF PENSIONERS

Mr MORGAN:
REID, NEW SOUTH WALES

– I address a question to the Minister for Social Services. Has the Minister taken any steps, as envisaged by him when appointed to the Ministry, to appoint a committee to consider the question of the employment of elderly people of pensionable age? If so, who are the members of the committee and what progress, if any, has it made? Also, can the Minister say who is responsible for the policy, which apparently is now adopted by the Department of Social Services, as is indicated by cases coming under my notice in my electorate, of depriving invalids with permanent long-standing disabilities of their pensions on the ground that they are fit for work, despite the fact that no suitable employment is available for them? Can the Minister say whether this policy is based on humanitarian or financial grounds?

Mr ROBERTON:
Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– The question contains two parts which are entirely different in content. The first part deals with the question of the retiring age. My illustrious predecessor as Minister for Social Services appointed an interdepartmental committee 10 inquire into the retiring age. The commit.lee has met from time to time.

Mr Edmonds:

– Who are its members?

Mr ROBERTON:

– I am not in a “position to say who constitute the committee, but I shall obtain the information and supply it to the honorable member for Reid. The committee has had a number of meetings, and I am informed that a preliminary report will be prepared and submitted to me. When it reaches me I shall inform the House and the honorable member. The second part of the question deals with the policy of the Department of Social Services with respect to those in receipt of invalid pensions. Of course, the department’s policy is dominated by the precise terms of the Social Services Act, which provides that no one shall be eligible for an invalid pension unless the disability is shown on medical evidence to be in excess of 85 per cent. That will remain the department’s policy until the act is amended. The honorable member has been a member of this House long enough to know that I am available to him at all times, as my predecessors were, if he has in mind a particular case that he would like investigated.

page 1679

QUESTION

POLAND

Mr ANDERSON:
HUME, NEW SOUTH WALES

– I wish to direct a question to the Minister for Defence, who is acting for the Minister for External Affairs. Since the Leader of the Opposition, rather surprisingly, failed to ask a question about the present disturbed conditions in Poland, will the Minister now inform the House of the latest position in the struggle by the Poles for independence from Russian imperialism?

Sir PHILIP MCBRIDE:
Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– I have had - short statement prepared. I propose, with the concurrence of the House to present it after questions have concluded.

page 1679

QUESTION

CONFERENCE OF COMMONWEALTH AND STATE MINISTERS

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– I ask the Prime Minister whether the subject matters listed for the conference which the right honorable gentleman has arranged with the State Premiers for next month include control of prices, profits, and capital issues, and the regulation of interest rates. Does the Commonwealth propose to make any recommendations to the conference? If so, what are they? If no agenda has been arranged and no recommendations are to be submitted by the Commonwealth, what is the precise purpose for which the conference is being convened?

Mr MENZIES:
LP

– I thought I announced in the House some time ago that I proposed to convene this conference so that my colleagues and I might discuss with the Premiers the problem of trying to achieve some uniformity in the methods of wage fixation.

Mr Ward:

-Is that all?

Mr MENZIES:

– I said on that occasion - and I repeat now for the benefit of the honorable member for East Sydney - that this indicated not that this Government desired to depress wage rates, but that it desired to obtain uniformity of methods.

Mr Ward:

– Is that the only subject listed for discussion?

Mr SPEAKER:

– Order!

Mr MENZIES:

– That is what I have convened the forthcoming meeting to discuss. That is what I myself shall discuss, and I hope - indeed I believe - that common sense will produce a sensible answer.

page 1680

QUESTION

CURRENCY

Mr WILSON:
STURT, SOUTH AUSTRALIA

– Is the Treasurer aware that earlier this year it was reported that because of the high price of bronze an Australian penny could be sold for scrap metal for more than a penny? If this report was correct, would not our coinage be endangered if the price of bronze again rose? Will the Treasurer consider arranging for a new coin to be minted, smaller in size than our present penny, and having a value of one-tenth of a shilling, for the dual purpose of protecting the coinage and getting one step closer to the establishment of a decimal system of coinage?

Sir ARTHUR FADDEN:
CP

– The first matter that the honorable member mentioned in his question has been the subject of discussion and investigation for a considerable period of time. I do not think, though, that the establishment of a decimal system of coinage ha_ been a subject of discussion. When I have any definite information to convey to the honorable member I shall be pleased to convey it.

page 1680

QUESTION

CONFERENCE OF COMMONWEALTHAND STATE MINISTERS

Dr EVATT:
BARTON, NEW SOUTH WALES

– I desire to ask the Prime Minister a question supplementary to the question asked a few minutes ago by my colleague, the honorable member for East Sydney. Does the Prime Minister’s answer to that question mean that relevant or related subjects, such as prices, profits, interest rates and capital issues, will be excluded from the scope of the proposed conference, or may they be discussed if any State Premier wishes to bring them up?

Mr MENZIES:
LP

– I am bound to say that I feel under no obligation to make preliminary rulings on the relevancy of matters that may arise at a Premiers conference. I think that the Premiers are very well able to look after that kind of thing themselves. I do want to make it quite clear to all concerned that we do not propose to hold’ a conference that will go on and on and produce no results. The problem, the discussion of which is the principal purpose of the proposed conference, is a very urgent one, and it would be a very great pity if the solution of it were delayed by a great number of considerations, some of which may be within the constitutional power of the Commonwealth, but some of which most certainly would not be.

page 1680

QUESTION

WOOL SHIPMENTS

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– Can the

Minister for Primary Industry inform the House why approximately only 1 per cent, of the wool sold at the sales in Geelong was shipped overseas from that port, the remainder being transported to Melbourne for shipment overseas?

Mr McMAHON:
LP

– I have made some inquiries, in order to ascertain why so little of the wool sold in the Geelong area was shipped from that port. I found that approximately 5 per cent, of the wool was shipped from Geelong, and 20 per cent, of it was locally consumed. There were tworeasons why the remainder was not shipped from Geelong. The first was that such a small quantity was involved that it was found to be cheaper to take it to Melbourne and ship it from there. The second reasonwas that the delay that would have been entailed in shipping small quantities of wool from Geelong was thought to be not in thebest interests of the wool producers.

page 1681

QUESTION

SOCIAL SERVICES PAYMENTS

Mr CLARK:
DARLING, NEW SOUTH WALES

– In view of the recent substantial increase in the C series index figures, will the Minister for Social Services make representations to the Government with the object of increasing the rates of social services payments before the conclusion of the current sessional period?

Mr ROBERTON:
CP

– If the honorable member’s memory is as good as it should be, he will recall that there was a time when all social services payments were related to the price index. That practice was discontinued by a Labour government, and since that time the rates of pensions have been determined by this Parliament from time to time and from year to year. Within the last few weeks the rates of social services payments have been under discussion. They are constantly under review by the Government and they will be changed from time to time as the economic circumstances permit.

page 1681

QUESTION

TRACTOR BOUNTY LEGISLATION

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– 1 desire to preface a question to the Minister for Primary Industry by stating that, during the last sessional period, when the Tractor Bounty Bill 1956 was before the House, 1 drew attention to several anomalies in the measure and, subsequently, made representations that the Minister take the appropriate action to amend the act and provide greater encouragement to the Western Australian company which is engaged in tractor production and is at present receiving subsidy assistance. Is the honorable gentleman able to advise me whether this matter is still under consideration and whether amendments to the act may be anticipated?

Mr McMAHON:
LP

– The problems raised by the honorable gentleman have been given consideration by the Government and a decision has been made. I regret that 1 have to inform him that I am not quite certain of the exact procedure that is followed in these matters, because the decision was made only on Thursday or Friday. Nonetheless, I shall find out what is the appropriate thing to be done, and give him a written answer just as quickly as - 1 can.

page 1681

QUESTION

AIRCRAFT PRODUCTION

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– Can the

Minister for Defence Production say whether the 20 per cent, reduction in staff already effected by the Commonwealth Aircraft Corporation at Lidcombe can be regarded as the limit in retrenchment that will take place, either now or in the immediate future, at those works? ls the Minister aware that in the retrenchment policy being followed at Lidcombe, married men and their wives, in some instances, have been retained, whilst some married men have been retrenched? Further, can the Minister indicate, from information that he may have, whether the rumour that the corporation’s organization at Lidcombe will be handed over to private enterprise between now and 1st July, 1957, has any foundation?

Mr BEALE:
LP

– 1 shall have to ask the honorable gentleman to put that question on the notice-paper. I do not seek to evade it, but I am sure he will understand that I am not in possession of the facts that he seeks at this moment.

page 1681

QUESTION

POSTAL DEPARTMENT

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– Has the attention of the Postmaster-General been drawn to the expansion of population and the demand for increased postal facilities, particularly in the centres of Bonalbo and Urbenville, following on the development which has taken place in the north valley of the Clarence River as a result of the very fine road policy which was carried out by the government of which I was a member some years ago? In any case, can the Postmaster-General inform me what steps the department may be able to take to meet the demands and requests of the people in that, part of the world?

Mr DAVIDSON:
CP

– 1 am aware of the development which has taken place in the areas referred to by the honorable member for New England, largely because he has, on several occasions, drawn my attention to it and the consequent need for the improvement of postal facilities. As a result of that, I have made inquiries from time to time. My present information is to the effect that it has been determined to include the building of a new post office and exchange at Bonalbo in the programme for the present financial year. I understand that plans are now being prepared, and when they are completed tenders will be sought. There is no proposal to build a new post office in the Urbenville area at present. I am informed that the available facilities are sufficient to meet present needs, especially in view of the more urgent requirements of other areas.

page 1682

QUESTION

WAUCHOPE TELEPHONE SERVICES

Mr DAVIDSON:
CP

– I would like to take this opportunity to add a little information to the answer that I gave a few minutes ago to a question by the honorable member for Lyne. As a result of the well-known and acknowledged efficiency of my department I have already been provided with further information. I am glad to be able to inform the honorable member that the cable work to which 1 referred in my answer has progressed to the point where the majority of those to whom facilities have been allotted will be provided with the service within about three weeks. Line plant will not be available for about 45 applicants, but it is expected that their needs will be met by next February.

page 1682

QUESTION

SALARIES OF OFFICERS OF THE HOUSE OF REPRESENTATIVES

Mr MENZIES:
LP

– Recently the honorable member for Blaxland asked me a question concerning the salaries of the staff of the House of Representatives. I undertook to find out the present position, and I think that the answer should be on record. Certain technical matters were under discussion between the Presiding Officers and the Treasury concerning the reclassification of certain positions on the House staff. In addition to the Treasurer, I have now had an opportunity to join in these discussions - for reasons that are clear enough. I am happy to inform the honorable member that the proposed reclassification of the positions has been approved and has appeared in the “ Gazette “.

page 1682

QUESTION

BANKING CONFERENCE

Mr PETERS:
SCULLIN, VICTORIA

– I ask the Prime Minister whether he is again calling representative’s of the private banking institutions into conference because the conference held with them, towards the end of last year, and with representatives of the hire-purchase organi zations, was a glorious success? Or is the proposed conference being held because the last one was a disastrous failure? If the last conference was successful, will the Prime Minister tell honorable members U> what extent it resulted in the restraint of inflation, or the restriction of hire-purchase operations? If the previous conference wa> a disastrous failure, will he tell honorable members what reason he has to expect a change of heart and attitude on the pan of the private banking institutions?

Mr MENZIES:
LP

– I do not entirely under stand the honorable member’s question It seams, if I may say so, to be very argumentative. I gather that he wants to know whether the next conference with bankerwill be held because of the failure, o> success, of the previous conference. I must say that I thought our previous conference was very helpful indeed, as was the conference that I had with representatives oi the hire-purchase finance organisations. I do not. when I am deciding whether to hold a conference, say that the last one was a failure so I must try again; or thai the last one was a success and therefore I need not have another. Most of 0U problems deserve regular discussion, and I propose that this should take place whenever I have the opportunity. It would be very bad luck if we were dissuaded b> one failure, because if that were so the conference behind the Speaker’s chair between the deputy leader on each side would happen once, and never again.

page 1682

QUESTION

DUTY-FREE IMPORTS

Mr HOWSE:
CALARE, NEW SOUTH WALES

– I ask the retiring Minister for Customs and Excise whether he can give me, in this last hour of his portfolio, a favorable decision on the duty-free admission of bells for a clock tower which he knows I have been trying to obtain for the important town of Parkes. Is it correct as is widely believed, that the Minister, in deciding questions of by-law admission of goods for development, duty-free, or at reduced rates, is bound hand and foot b> the decision of the United Kingdom Board of Trade? Will he give me a decision on this important question?

Mr OSBORNE:
LP

– Much as I would like to oblige my friend, the honorable member for Calare, with a favorable decision on the matter about which he asks me on this, my last opportunity to deal with it as Minister for Customs and Excise, I am sorry to have to tell him that I have written to him informing him that I cannot agree to the request that he put to me. As a matter of fact, in this instance the decision had nothing to do with the views of the Board of Trade, because the question was whether Australian manufacturers could supply articles of a like class or kind suitable for the purpose. I was satisfied that they could and, where that condition exists, a person who wishes to import goods of a like class or kind, instead of purchasing the Australianmade articles, has to pay a duty on them. As to whether I, in the capacity of Minister for Customs and Excise, am bound by the views of the Board of Trade about whether things of a like class or kind can be supplied from the United Kingdom, or they should not be imported duty free or at reduced rates from other countries, 1 can rell him quite definitely and affirmatively that 1 am not, and never have been, bound by the views of the Board of Trade in London, and that the widespread views to the contrary held in pertain commercial circles in Australia are quite wrong. Senator O’sullivan, my predecessor in this office, laid it down firmly in 1954 that the decision in this matter should be made by the Australian Minister concerned. I have followed, and applied, that view equally firmly, and [ am quite confident that my successor in this office will do the same. We are, however, obliged, under our international agreements, to consult the Board of Trade and ascertain its views. We carry out discussions with the Board of Trade to complete lengths but, ultimately, the decision is made in Australia, and 1 am quite sure that it will continue to be made in Australia.

page 1683

QUESTION

IMPORT LICENSING

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I direct my question to the Minister acting for the Minister for Trade. ls it a fact, as reported, that a special committee of Government supporters has investigated the import licensing system? Is it also a fact that the committee has strongly criticized the Government’s policy, the administration of import licensing, and the chaotic position in regard to licensing? Furthermore, will the Minister state whether he intends to act on the committee’s recommendations, and when it may be expected that the whole question of delays, traffick ing in licences, and refusal of permits will be cleared up to me satisfaction of industry and the public?

Mr McMAHON:
LP

– The statement made by the honorable member for Grayndler is not only provocative but, also, a little inaccurate in respect of the presentation of facts. Certain Government supporters who desired to become a little better informed on the need for import licensing and about the methods of import licensing itself had departmental officials placed at their disposal so that they could get a full knowledge of the facts. From the discussions that I have had with members of the committee, particularly with the honorable gentleman nominated to become the new Minister for Customs and Excise, I have found satisfaction with what the Government is doing. This was expressed to me by the gentleman who will be the new Minister. So the basis of the honorable gentleman’s question is, I think, incorrect. It is not true to say that the committee has submitted a report to me. It may have submitted a report to the Minister for Trade himself but, if so, it has not yet been placed before me and I would not, therefore, have had an opportunity to peruse it.

page 1683

QUESTION

APPLES AND PEARS

Mr LUCK:
BRADDON, TASMANIA

– Is the Minister for Primary Industry aware of the reduced exports of apples to Eastern markets, particularly to Malaya? Are these reductions a direct result of the restrictions of selling agents in those areas, and a knowledge by other competing countries of the prices that must be quoted by Australian exporters? Is it proposed to continue the present system of selling apples and pears in Eastern markets?

Mr McMAHON:
LP

– There has been a fall in the sale of Australian apples and pears to Malayan and entrepot markets throughout the Far East, but I think it is correct to say that the percentage of Australian apples and pears being sold there as a proportion of total sales from all production centres is the same as it was last year and the year before. In other words, there has been a total falling-off in sales, but the Australian proportion of sales remains the same as it was. I do not think that this is due to the activities of selling agents. Recently, a board was established to deal with the sale of Australian apples and pears but, due to import restrictions by the

Mayalan and Singapore Governments, and to the fact that a duty of 7s. 6d. a case was placed on apples, exports to those areas have declined. In answer to the last part of the question, I inform the honorable member that it is intended to continue the present method of sales for the time being. However, the problem is being considered, particularly as a result of representations made by Western Australian producers. As soon as a decision is reached, I will let the honorable gentleman know.

page 1684

QUESTION

AUSTRALIAN REPRESENTATION ABROAD

Mr MAKIN:
BONYTHON, SOUTH AUSTRALIA

– My question is directed to the Minister acting for the Minister for External Affairs. We learn from outside sources that an appointment has been made to the important position of High Commissioner for Australia in Canada. While the House is in session, could not these very important announcements be made here? Honorable members would then be aware of the appointments and would not have to refer to the sources through which such knowledge is now obtained.

Sir PHILIP McBRIDE:
LP

– I agree that normally these appointments might be announced in the House whenever practicable.

page 1684

QUESTION

SOCIAL SERVICES BENEFITS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question, which is directed to the Minister for Social Services, follows a letter I received from the honorable gentleman last Thursday. Will the Minister review the case of Sen Young? He is of Chinese extraction but was born in Darwin in 1883. That was before the federal government started to administer Darwin and the city was administered, I believe, by South Australia. The registration of births was then very lax, and quite unlike the very rigid system that operates to-day.

Mr SPEAKER:

– Order! What is the honorable member’s question?

Mr JAMES:

– I must explain it, Mr. Speaker. However, you are ruling me out of order and I shall proceed to the question. I ask the Minister to review this case in view of the fact that this man was born in Darwin. The Commonwealth was not administering the Northern Territory at the time of his birth. South Australia had the responsibility of administering the Northern Territory but did not rigidly enforce the registration of births.

Mr ROBERTON:
CP

– I have cause to have vivid recollections of the case mentioned by the honorable member for Hunter. Under the Social Services Act I have certain discretionary powers with regard to the granting of social services benefits to aliens. As is customary in such cases, I carried out the most exhaustive examination into the details of the case cited by the honorable member. But the applicant himself had some doubt as to when and where he was born. Until those questions are resolved, it is very difficult for me as Minister for Social Services to exercise discretion in this matter.

page 1684

WENTWORTH ELECTORAL DIVISION

Issue of Writ

Mr SPEAKER:

– I wish to inform the House that it is my intention to issue a writ on Wednesday, 7th November next, for the election of a member to serve for the electoral division of Wentworth, in the State of New South Wales, in the place of the Right Honorable Sir Eric Harrison, resigned. The dates in connexion with the election will be fixed as follows: - Date of nomination, Thursday, 22nd November, 1956; date of polling, Saturday, 8th December, 1956; date of return of writ, on or before Saturday, 19th January, 1957.

page 1684

POLAND

Sir PHILIP McBRIDE:
WakefieldMinister for Defence · LP

– by leave - We have had no confirmation of most of the news reports concerning events in Poland since last, week-end. However, Warsaw radio has confirmed that Gomulka has been appointed leader - First Secretary - of the Polish Communist party, and it is clear that the events had their origin in the election of a new politburo. It also appears that there is fairly widespread support for the new politburo, which has pledged itself to fight for independence from the Soviet Union in promoting socialism in Poland. Gomulka has condemned Polish economic policy during the last seven years and has emphasized the determination of Poland to fight . its own way towards socialism; his determination to “ democratize “ Poland, especially by a return to “ open party life “ and implementation of the principle that the role of the Communist party is to lead, not to govern; and he has emphasized continued Polish friendship with the Soviet Union. lt appears that Khrushchev and other Soviet leaders arrived unexpectedly in Warsaw during the election of the new politburo and tried, unsuccessfully, to secure the re-election to the politburo of Marshal Rokossovski, the Polish-born Soviet general who commands the Polish Army. Rokossovski has long been unpopular in Poland, where he symbolizes Soviet power. According to the press, Khrushchev and Rokossovski gave orders for the movement of Soviet troops in an attempt to enforce their wishes, but the leaders of the Polish Communist party threatened to break all contacts with the Soviet unless these orders were withdrawn. It appears that early press reports of clashes between Soviet and Polish troops were without much foundation, that the Poles did, in fact, refuse to admit Soviet troops from East Germany.

The move against Soviet intervention in Polish affairs is not unexpected. The two basic factors in Polish political life are the intense Polish sense of nationality, and the Polish attachment to the Catholic Church. Neither the reign of terror nor Communist propaganda has made much impression on these sentiments. Additionally, communism came to Poland with the Soviet army and was, therefore, in Polish eyes, tainted at the source. There was an easing of pressure from the Polish security service in 1955, following revelations concerning some of its infamous methods. This relaxation of fear released forces which had been held in subjection, but not subdued, by the preceding reign of terror. Throughout 1955, Polish nationalism and Catholicism were gradually having an effect throughout the system. At the same time, mismanagement of Poland’s economy resulted in discontent among the workers, and there were reports of passive resistance slowing down production.

The demolition of the Stalin myth and the death, at about the same time, of Beirut, the former head of the Polish Communist party, lead to a freedom of expression in Poland which had not been seen in the Communist world for a long time. The Polish politburo was unable to reverse this trend. Reports grew of increasing discon tent, and it was against this background that the Poznan riots occurred in June of this year. The riots forced the Communist party to admit serious deficiencies in the economic system and to seek popular support. There was nobody in the Government, however, with much public appeal. Gomulka’s popularity with the masses has yet to be tested. However, if he stands publicly by his old faith that Poland comes before communism, for which he was expelled from the party previously, he should be more popular than other Polish Communist leaders. lt is too early to assess the significance of the recent changes which reflect, primarily, differences of opinion within the Polish Communist party regarding the extent of Soviet intervention in the party’s affairs. Gomulka himself has emphasized that friendship with the Soviet Union will remain the basis of Polish foreign policy. It remains to be seen whether he will receive widespread popular support in Poland and whether the Soviet Union will accept the new line of independence for which he stands. Poland is in the grip of an economic crisis, and economic sanctions by the Soviet Union could have far-reaching effects on the Polish economy. The recent events may be regarded, however, as an expression of the traditional Polish yearning for liberty and independence. They undoubtedly will have great significance for other Soviet satellites, in which there are increasing signs of the emergence of nationalism somewhat along the lines of that which prevails in Tito’s Yugoslavia.

T lay on the table the following paper: -

Poland - Ministerial Statement. and move -

That the paper be printed.

Debate (on motion by Dr. Evatt) adjourned.

page 1685

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate without amendment: -

Defence Bill 1956. Air Force Bill 1956.

Wool Products Bounty Act Repeal Bill 1956. Distillation Bill 1956. War Pensions Appropriation Bill 1956. Loan (Housing) Bill 1956.

page 1686

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 3) 1956

Motion (by Sir Arthur Fadden) - by leave - agreed to -

That leave be given to bring in a bill for an act to amend the law relating to income tax.

Bill presented, and read a first time.

Second Reading

Sir ARTHUR FADDEN:
McPhersonTreasurer · CP

– by leave - I move -

That the bill be now read a second time.

When the budget was introduced in this House on 30th August last, 1 explained that, having regard to prevailing economic conditions, the Government could not see the way clear to make reductions in the general level of taxation. At the same time, however, I announced the Government’s intention to effect several amendments of the existing income tax law. The purpose of the bill now before the House is to effect those amendments which, I am confident, will receive unanimous approval.

One of the most important proposals contained in this measure is an increase from £200 to £300 in the maximum deduction allowable for life insurance premiums, contributions to superannuation funds, subscriptions to friendly societies and similar payments. This substantial increase in the concessional allowance represents a positive encouragement of both employed and selfemployed taxpayers to save so that more effective provision may be made, through superannuation or life insurance, for the years of retirement.

Conversation being audible,

Mr SPEAKER:

– Order! There is too much audible conversation in the chamber. I must ask honorable members to be silent.

Sir ARTHUR FADDEN:

– The interruption is very disturbing, Mr. Speaker, lt is proposed also that subscriptions to hospital and medical benefits funds shall be removed from the class of payments subject to the new maximum of £300. It is thought to be more appropriate that these subscriptions should be allowed as separate deductions. The adjustments I have mentioned will apply as from 1st July, 1956. Another amendment relating to hospital and medical benefits funds will exempt the income of such organizations which are registered under the National Health Act 1953-1955. This exemption will afford substantial assistance towards consolidating the assets of the funds in the interests of members It will be noted that the amendment will operate as from 1st January, 1952, and accordingly will apply to the income of funds registered for purposes of the national health legislation in force prior to the present National Health Act. Any income tax that may have been paid by these registered organizations will be refunded. lt is proposed also to increase the special deductions allowed to residents of isolated areas - generally known as zone allowances. Residents of the more remote area - Zone A - are at present allowed an annual deduction of £120. This deduction will be increased to £180. Residents of Zone B are allowed an annual deduction of £20. which will be increased to £30. The increased deductions will apply as from 1st July, 1956. It is further proposed to extend, as from 1st July, 1956, the area of Zone A to include a substantially greater portion of Western Australia, the whole of the Northern’ Territory, and that part of western Queensland west of the 141st meridian of longitude, which is now in Zone B. As a result, the annual deductions allowable to residents of such centres as Alice Springs, in the Northern Territory, Carnarvon, . in Western Australia and Birdsville, in Queensland, will be increased from £20 to £180.

Another concessional allowance which is being increased is the deduction for education expenses incurred by a taxpayer in the full-time education of his own children under 21 years of age, or other children under that age who are dependent upon him. As honorable members know, since this concession was introduced by the present Government in 1.952, it has won approval in all quarters. When first introduced, the concession covered actual payments to schools, colleges and universities and it was subject to a maximum deduction of £50 in respect of each child. On that occasion, however, I promised that the allowance would be reviewed in the light of experience and that it would be extended if found necessary. In pursuance of that promise, the maximum was raised to £75 in 1953, and the allowance was broadened to include such necessary expenditure on education as the cost of text-books and fares to and from school. Following a further review this year it has been decided to increase the maximum deduction, in respect of each child, to £100. The increase will apply as from 1st July, 1956.

It is proposed also that the concessional allowances for gifts of £1 and upwards to specified funds, authorities and institutions in Australia shall be extended as from 1st July, 1956. Deductions will be allowed for gifts to the Commonwealth, where those gifts are made for the specific purpose of promoting research in the Australian Antarctic Territory. This allowance will be consistent, in principle, with the present deduction for gifts to approved research institutes for the purposes of scientific research. Deductions will also be allowed for gifts to the Royal Australasian College of Surgeons, the Royal Australasian College of Physicians, the Australian Regional Council of the Royal College of Obstetricians and Gynaecologists, the New South Wales College of Nursing and the College of Nursing, Australia. The activities of these colleges are directed towards the promotion of post-graduate training and research in the fields of surgery, medicine and nursing, lt is proposed also to allow deductions for gifts to the Council for Christian Education in Schools. The function of the council is to supervise the work of teaching Christian faith and conduct in government schools. It has been recognized by the legislature of Victoria as the accredited body in that State for this purpose. 1 turn now to those clauses in the bill which relate to the taxation of members of the defence forces. Since 28th June, 1950, when Commonwealth forces first became engaged in operations in Malaya, the pay and allowances of members of the Australian military and air forces allotted for duty in Malaya have been exempt from income tax. The exemption was not expressed to apply to Australian naval forces, as Australian naval vessels were not then operating in Malayan waters. Since 1st July, 1955, however, Australian naval personnel have been serving in the Malayan area as part of the Far East Strategic Reserve. It is proposed, as from 1st July, 1955, to apply the exemption to the pay and allowances of these members of the Australian Navy. While these exemptions have been thoroughly justified over the last six years, it has been thought necessary, in the light of changed circumstances of service in Malaya, to discontinue the exemptions as from the date on which the amending legislation now before the House receives the Royal Assent. At the same time, however, personnel serving in the Malayan area will become eligible for an annual deduction of £180 as from 1st July, 1956. Consistently with the proposed increase in zone allowances, the present deduction of £120 provided for members of the Australian Defence Force serving in certain other overseas localities will also be raised to £180 as from 1st July, 1956.

A subject which has engaged the attention of the Government is the provision of income tax allowances for expenditure on capital assets which, with the passage of time, lose their value. There will be general agreement, I feel sure, that where assets are acquired and used to produce assessable income and those assets are not of an enduring nature, the capital expended on the assets should be deductible for income tax purposes. This principle is recognized in the present income tax allowances of depreciation on plant and machinery and on capital expended in the mining industry. In considering this matter, the Government has had the assistance of the valuable report submitted last year by the Commonwealth Committee on Rates of Depreciation. T wish to pay my tribute to the work of that committee which examined the subject under the able chairmanship of our colleague, the honorable member for Petrie (Mr. Hulme). For reasons which have been stated on other occasions, it has not been found practicable, up to the present, to give effect to recommendations of the committee relating to depreciation allowances generally. As a step towards implementation of the committee’s proposals, however, it has been decided to provide deductions for such expenditure as the cost of access roads in the timber industry and the cost of developing or purchasing patents, registered designs and copyrights.

So far as access roads are concerned, the proposal is that the cost of an access road constructed after 1st July. 1956, will be deductible by annual instalments over the estimated period during which the road will be used for the purpose of providing access to a stand of timber. There will be cases, no doubt, where a road will serve this purpose for a period estimated to be longer than 25 years, for example, a road giving access to an area where re-afforestation is undertaken. In a case such as this, annual deductions for the capital expended on the road will be based on a maximum life of 25 years. A proportionate part of the cost of an access road constructed prior to 1st July, 1956, will also be deductible if the road is still in use after that date for the purpose of gaining access to timber. In such a case, the cost of the road will be allocated between the period of its use prior to 1st July, 1956, and the estimated period of its use after that date. The part of the cost allocated to the latter period will be deductible.

Concurrently with the amendment to authorize the deduction for the cost of access roads, it is proposed to remove certain limitations in the present income tax allowances relating to the felling of timber. Broadly, it is proposed to allow expenditure to acquire standing timber or a right to fell timber. The annual deduction will be the part of the expenditure proportionate to the timber felled in the year. These deductions will be allowed in all cases where assessable income is derived in consequence of the felling of the timber - whether by direct sale of the timber, its use in manufacturing processes, or by way of royalties from the granting of a right to fell the timber.

Another proposal relates to the basis of assessment of insurance moneys recovered in consequence of the destruction by fire of planted forests. At present, taxable insurance recoveries are included in assessable income of the year in which they are received. It is proposed that the taxpayers concerned should have a choice of including one-fifth only of the insurance recovery in the assessable income of the !year of receipt and one-fifth in each of the next four succeeding years. This amendment, which applies as from 1st July, 1956, is consistent with similar legislation introduced by the present Government in 1952 in regard to insurance recoveries received by primary producers on the loss of livestock.

Ant .ner recommendation by the Hulme Committee which is being given effect to by this bill relates to expenditure on those assets which may be described in general terms as rights in industrial property - that is, patent rights, registered designs and copyrights, lt is proposed to allow annual deduction of such expenditure proportionately over the period of the right, commencing with the year of income in which the right is first used for the purposes of producing assessable income. Under Australian law, the normal life of a patent right is sixteen years and of a registered design, fifteen years. The normal period of copyright is for the life of the author and 50 years afterwards. These allowances will apply to all expenditure of a capital nature incurred on the development or the purchase of a patent, registered design or copyright, or on the purchase of a licence to use a patent, registered design or copyright.

The deductions authorized in these new provisions will commence to operate in the income year 1956-57, and will apply to rights existing at that date as well as to future rights. In the case of existing rights, the deduction will be calculated on the basis of the written-down value at 1st July, 1956. In addition, original registration fees and periodical renewal fees paid after 1st July, 1956, will, in all cases, be allowed as an outright deduction in the year in which the expenditure is actually incurred.

Another amendment arising from the Hulme Committee’s report is a provision designed to adapt, as a continuing feature of the income tax law, special war-time provisions which related to insurance and other recoveries on assets lost or destroyed. As honorable members may know, the system of depreciation allowances for income tax purposes comprises, not only annual deductions based on the cost of each unit of plant or other depreciable asset, but also balancing adjustments when such assets are disposed of, lost or destroyed. Any deficiency of depreciation which is evidenced on the disposal, loss or destruction is allowed as an additional deduction. Where, on the other hand, the consideration receivable for the asset exceeds its written-down value, the excess, to an extent not greater than the depreciation deductions previously allowed, is included in assessable income.

For the purposes of the balancing adjustment, insurance or other moneys recovered on the loss or destruction of an asset are regarded as consideration receivable for the -asset. To an extent not greater than the depreciation previously allowed, therefore, 4he excess of the insurance recovery over the written-down value of the asset is required to be included in assessable income.

In some cases, however, this results in -u substantial amount being added to the -assessable income of one year. To assist in financing replacement of the asset, -special provisions were introduced during “World War II., which had the effect of -modifying the balancing adjustment in relation to insurance and other recoveries on Assets lost or destroyed during the war. Broadly, the taxpayer was given an option, in lieu of being assessed on the balancing adjustment, to set off an equivalent amount against the cost of the replacement asset or against the value of any other assets subject to depreciation. The Government has decided to adopt, commencing with the income year 1956-57, a proposal by the Hulme Committee that taxpayers should be given a similar option in regard to any insurance recovery in respect of the loss or destruction of depreciable assets.

An amendment proposed in this bill relates to the provision which authorizes the deduction of losses incurred by a taxpayer during the period of seven years preceding the year of income. It is expressly stated in the present law that no deduction shall be allowed of losses incurred prior to the dates on which a taxpayer becomes bankrupt or is otherwise released from his debts by the operation of the Bankruptcy Act. In the generality of cases, this prohibition operates fairly, as there would be no justification for allowing a taxpayer a deduction in respect of a debt which he did not actually discharge.

From several quarters, however, the Government has received requests for a relaxation of this prohibition. The representations have been mainly directed towards allowing a former bankrupt to deduct debts which he has paid voluntarily after his discharge from bankruptcy. There is considerable merit in these claims and, accordingly, it is proposed to allow a deduction, in the year of payment, for debts so paid, to the extent that the taxpayer is able to demonstrate that the debts had entered into the calculation of a business loss, the deduction of which has been denied to him. In its practical effect, the amendment will apply to payments made on and after 1st July, 1956, on account of debts incurred by the taxpayer within seven years prior to the year of payment.

Clauses of the bill propose relaxations of certain conditions attached to the exemption of dividends paid by private companies out of funds which have borne undistributed income tax at shareholders’ graduated rates of tax. These conditions are, firstly, that the dividends are paid wholly and exclusively out of the taxed funds; and, secondly, that the dividends are paid on shares by reference to which the undistributed income tax was calculated. These conditions were first established many years ago when the system of taxation of private companies was very different to that operating to-day. Experience has shown that the conditions have affected private companies and their shareholders in an uneven manner and have unduly hampered the taxpayers concerned.

As the conditions were, in effect, part of a system of private company taxation which was replaced four years ago by the present system, it is thought that the time is now opportune for the removal of those conditions. Provisions to this effect are included in the bill and will apply to dividends paid on and after 1st July, 1956.

It is proposed in the bill to give formal legislative effect to Article 13 of an agreement dated 26th November, 1949, between the United States and Australia, generally known as the Fulbright Agreement. In this article, it was agreed that grants by the United States Educational Foundation in Australia to students and research workers should be exempt from income tax. Until recent times, it was not necessary to provide a specific exemption of these grants in the Assessment Act as the grants were made to students in circumstances that caused one of the present exemptions to apply. More recently, however, visiting professors, lecturers and research workers have received grants to which the present exemption does not apply. It is now proposed to amend the assessment act to provide specifically for the exemption of all grants by the foundation.

The bill includes several other amendments mainly of a drafting and machinery nature. These may more appropriately be explained in a memorandum on the bill which is to be circulated for the information of honorable members. In that memorandum the opportunity will be taken also to furnish a more detailed explanation of the amendments to which 1 have referred in the course of this speech.

Debate (on motion by Mr. Crean) adjourned.

page 1690

SUGAR AGREEMENT BILL 1956

Motion (by Mr. McMahon) - by leave - agreed to -

That leave be given to bring in a bill for an act to approve an agreement relating to sugar made between the Commonwealth and the State of Queensland, and for other purposes.

Bill presented, and read a first time.

Second Reading

Mr McMAHON:
Minister for Primary Industry · Lowe · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to obtain parliamentary approval of an agreement made between the Commonwealth and the Queensland Government to regulate the production and marketing of sugar in Australia during the next five years. The Sugar Agreement included as a schedule to the bill continues the series of agreements between the Commonwealth and the Queensland Government which have existed for more than 30 years. Its terms are little different from those contained in the previous agreement which expired on 31st August, 1956. Indeed, the main principles of these agreements have remained substantially unaltered since 1923. Sugar is a protected industry in Australia. It is a protected industry in many parts of the world. Only about one-eighth of the annual world production of sugar, which amounts to 40,000,000 tons, is traded on the world free market. Most of the trade is covered by various protective and preferential trading arrangements. Under the new agreement the Commonwealth undertakes to continue to impose an embargo on the importation of sugar, and the Queensland Government for its part undertakes to acquire all raw sugar produced from cane grown in Queensland and New South Wales. The Commonwealth undertakes also to make sugar available in Australia at certain fixed prices; to control production; to accept respon sibility for losses arising from the export of surplus sugar; to pay rebates on the sugar content of goods exported; and to contribute to the funds of the Fruit Industry Sugar Concession Committee.

The effect of the import embargo in present circumstances is to enable the sugar industry to obtain a price for sugar in the domestic Australian market higher than the current world price. The domestic price is controlled under the agreement. The wholesale price at which the Queensland Government undertakes to sell sugar of 1A grade in State capital cities. Fremantle and Launceston, is fixed in the agreement al £82 ls. a ton, and a retail price of lOd. per lb. provides a profit margin of 13i per cent, on this wholesale price. This price has operated from 14th May, 1956. Prior to that date the wholesale price was £73 16s. lid. a ton, which was equivalent to a retail price of 9d. per lb. The increase of the equivalent of Id. per lb. in the retail price was agreed to by the two governments after a thorough investigation into cost increases of the industry subsequent to the previous price increase in October, 1952. The agreement contains a clause amending the Sugar Agreement 1951-1956 to authorize the price increase as from 14th May, 1956.

Another alteration contained in the current agreement as compared with the Sugar Agreement 1951-1956 concerns the method of financing the Fruit Industry Sugar Concession Committee. Under the previous agreement the Queensland Government, on behalf of the raw sugar industry, paid the committee £216,000 per annum. At the commencement of the agreement on 1st September, 1951, the committee’s reserve fund stood at just over £1.000.000. and the agreement contained a provision that the monthly instalments would not commence until the fund was reduced to less than £500.000. This reduction took place at the end of April, 1954, and the monthly contribution by the sugar industry has, therefore, been paid from 1st May. 1954. However, due to heavy payments of export sugar rebate and special grants to the processed fruit industry, the committee’s expenditure has exceeded £216,000 per annum and it has been necessary to meet the excess from the committee’s reserves, with the result that, at 31st August, 1956, the fund was reduced to about £150,000. It is obvious, therefore, that the committee cannot continue to pay rebates as provided for in the agreement unless it receives increased contributions from the sugar industry. Accordingly, the new agreement provides that the committee shall receive a contribution of £120,000 per annum and in addition shall be reimbursed actual disbursements of export sugar rebate. On the basis of the present rate the export sugar rebate will total about £250,000 per annum. So the sugar industry’s contribution to the Fruit Industry Sugar Concession Committee will be approximately £370,000 per annum as against £216,000 under the previous agreement.

Exporters of products which contain sugar at present receive a rebate which reduces the cost of sugar to the lower of (a) the lowest c.i.f. & e. cost in Australia of foreign sugar landed duty free; or (b) the estimated cost of refined sugar in Australia based on the price of raw sugar f.o.b. mill port received for sales of surplus Australian raw sugar for export. The first alternative ensures that exporters pay no more for their sugar than they would have to pay if they imported the cheapest foreign sugar duty free, and the second results in the raw sugar industry receiving no more for sugar used in goods exported than it would receive if the raw sugar were exported. The Government considers that this arrangement, which is included in the agreement, is equitable to exporters and to the sugar industry.

The agreement undoubtedly gives the Australian sugar producers a monopoly of the Australian market, and honorable members may well ask why the sugar industry should be placed in this privileged position, and why, in lieu of an import embargo, it should not be protected by import duties at rates based on the principle of reasonable competition with overseas suppliers as is the case with other Australian industries. The fact is that the world sugar trade is characterized by subsidies, high tariffs, and import embargoes; hence the free market for sugar is very much restricted. As a result of the relatively small proportion of the world production which is traded on the free market, the so-called world market price is subject to frequent and wide fluctuations. It would be impracticable, therefore, to determine equitable rates of import duties which would afford reasonable protection to the local industry. Rates of import duties considered equitable to-day could in a few months prove quite inadequate, or, on the other hand, due to a rise in the world sugar price, could become excessive. Under the present system, the Commonwealth and the Queensland Government, by agreement, control the price of sugar to the Australian consumer. Usually the domestic Australian price is higher than the world price, but from 1942 to 1952 the domestic Australian price was well below it.

The sugar industry has an obligation to maintain a high standard of efficiency and to keep pace with modern production techniques. I am satisfied that the industry is fulfilling its obligations in this respect. Various Commonwealth governments since federation have recognized the necessity and value of an efficient sugar industry, and their confidence in the Australian industry has not been misplaced. The protection afforded to the industry has resulted in the Australian community and sugar-using industries being assured of a plentiful supply of sugar at all times and in exports of raw sugar earning some £25,000,000 a year.

The Sugar Agreement 1956-1961 now submitted continues the arrangements contained in earlier agreements and will, I am convinced, be of mutual benefit to the Australian sugar industry and the people of Australia. I commend the bill to the House.

Debate (on motion by Mr. Edmonds) adjourned.

page 1691

NEW AND OPPOSED BUSINESS AFTER 11 P.M

Motion (by Mr. Harold Holt) agreed to -

That Standing Order KM - 11 o’clock rule - be suspended until the end of next week.

page 1691

STEVEDORING INDUSTRY CHARGE BILL 1956

In Committee of Ways and Means:

Motion (by Mr. Harold Holt) agreed to -

That, in lieu of the rate imposed by the Stevedoring Industry Charge Act 1947-1954. the rate of the charge in respect of the employment of waterside workers on and after the thirtieth clay of October One thousand nine hundred and fifty-six. be One shilling and sevenpence for every manhour of employment.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

Thai Mf. Harold Holt and Mr. Osborne do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr HAROLD HOLT:
Minister for Labour and National Service and Minister for Immigration · HIGGINS, VICTORIA · LP

– I move -

That the bill be now read a second time.

The bill is quite short and its purpose clear. The reasons for the proposed increase in the stevedoring industry charge from 6d. to ls. 7d. can be stated quite briefly. As from 3rd April last attendance money payable to waterside workers was increased by 50 per cent., from 16s. to 24s. That increase will add an estimated £368,000 per annum to the amounts paid out by the Australian Stevedoring Industry Authority for attendance money.

Secondly, by an award of the Conciliation and Arbitration Commission made quite recently, waterside workers were granted paid sick leave and pay for statutory holidays. Since there were difficulties in the way of making the employers directly responsible for these payments, as is the case at present with annual leave payments, the award of the commission directed that the authority should administer these payments. It is estimated an amount of the order of £1,078,000 per annum will be payable for sick leave and statutory holidays.

Thirdly, the administration of the press and radio system of allocating labour which has now been extended by the authority to most ports as a result of a recent award of the commission, while bringing great advantages to the industry as a whole and the waterside workers in particular, will involve the authority in greater administration expenditure.

Fourthly, the authority needs to be in a position where it can pursue a useful programme of installing necessary amenities and improvng pick-up and like facilities. Primary responsibility for amenities for waterside workers rests with the port authorities, and some of them are, in fact. doing much in this direction. Other authorities, however, are disposed to devote their resources to wharf maintenance and improvement. It is notorious that amenities for waterfront workers are in many cases much below the standard found in other industries. The Australian Stevedoring Industry Board has, over the years, spent considerable amounts in improving conditions, and the new Australian Stevedoring Industry Authority must continue this work. Necessarily, the authority must proceed on the basis of some system of priorities, for funds for these purposes are not unlimited; and, as I have said, the port authorities have responsibilities in this field as well.

Fifthly, some provision has to be made to enable the staff of the authority to be brought under the Commonwealth superannuation scheme. I have had this in mind for some time, and now that the authority has been given its charter by this Parliament, it is entirely appropriate that the benefits of the superannuation scheme should be extended to the authority’s staff.

Finally, principally as a result of the increase in the rate of attendance money to which I have referred, and there being no earlier opportunity for this Parliament to review the rate of the levy, the authority’s working funds have been running down at a rapid rate. It is, accordingly, now necessary to restore the authority’s funds to provide a safe level of working funds for the future.

The circumstances that make necessary this increase in the stevedoring industry charge contributed to the recently announced decision by the Australian interstate shipowners, including the Commonwealth line, to increase freight rates. While the Government regrets the need for these increases, it is not without knowledge of the difficulties confronting the Australian coastal shipping lines, for it knows very well the financial position of its own line of ships. I may say here that I have just received the report of the Stevedoring Industry Committee of Inquiry on the costs and profits side of its investigations. While I have not had an opportunity of analysing the report in detail, I do notice that it bears out the difficulties which the interstate shipping lines have faced in recent years. I shall be tabling this report in the next few days.

The increase in costs of interstate shipping services and stevedoring operations, which has given rise to this latest freight increase, stems almost entirely from the incidence of a series of awards of the arbitration tribunals. I have mentioned only some of these awards. From these, in particular, our waterside workers have secured great benefits. But benefits and obligations go hand in hand. The obligation in this case is to the community - that the utmost should be done to assist in securing a more expeditious turn round of shipping; in short, to increase the productivity of the industry. We need that. The public interest requires reductions in freight rates - not increases.

The situation on the waterfront has grave possibilities for all concerned - owners and men. Already high freight rates and poor performances have led to increases in the general level of our internal costs, and, in the case of internal Australian trade, to diversion of traffic to other forms of transport. Likewise, in the case of our external trade, they have imposed great burdens on our balance of payments problems. It requires no imagination to see what will happen if there is not a marked improvement in waterfront performance. The withering away of the intrastate coastal shipping services points the lesson quite clearly: The stevedoring industry will go the way of others that have refused, or failed, to face facts. For the waterside worker, the issue is a very real one. His future livelihood is bound up with the outcome.

I commend the bill to honorable members.

Debate (on motion by Mr. Ward) adjourned.

page 1693

TARIFF PROPOSALS 1956

Customs Tariff Amendment (No. 7)

In Committee of Ways and Means:

Consideration resumed from 30th August (vide page 112). on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933- 1956, as proposed to be amended by Customs Tariff Proposals, be further amended . . . (vide page 111).

Ordered to be considered as a whole.

Mr OSBORNE:
Minister for Customs and Excise · Evans · LP

– 1 move -

That preliminary paragraphs 1 and 2 be omitted and the following paragraph be inserted in their stead: - “ That the Schedule to the Customs Tariff 1933- 1956 be amended as hereinafter set out, and that on and after the thirty-first day of August, One thousand nine hundred and fifty-six, at nine o’clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1956 as so amended.”

This is purely a formal amendment to bring the preliminary matter into line with the existing tariff position. Since Customs Tariff Proposal No. 7 was introduced, the tariff proposals referred to in the preliminary paragraphs have been incorporated in the Customs Tariff 1933-1956 by legislation.

Amendment agreed to.

Motion, as amended, agreed to.

Excise Tariff Amendment (No. 4)

In Committee of Ways and Means:

Consideration resumed from 30th August (vide page 1 12), on motion by Mr. Osborne -

That the Schedule to the Excise Tariff 1921- 1956, as proposed to be amended by the Excise Tariff Proposals introduced . . . (vide page 112).

Ordered to be considered as a whole.

Mr OSBORNE:
Minister for Customs and Excise · Evans · LP

– I move -

That the preliminary paragraph be omitted and the following paragraph be inserted in its stead: - “That the Schedule to the Excise Tariff 1921- 1956 be amended as hereinafter set out, and that, on and after the thirty-first day of August, Onethousand nine hundred and fifty-six, at five o’clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Excise be collected in pursuance of the Excise Tariff 1921-1956 as so amended.”

This, again, is a formal amendment, designed to bring the preliminary matter into line with the existing tariff position.

Amendment agreed to.

Motion, as amended, agreed to.

Resolutions reported.

Standing Orders suspended; resolutions, adopted.

Ordered -

That Mr. Osborne and Sir Arthur Fadden do prepare and bring in bills to carry out the foregoing resolutions.

page 1694

CUSTOMS TARIFF BILL (No. 4) 1956

Bill presented by Mr. Osborne, and read a first time.

Second Reading

Motion (by Mr. Osborne) proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Calwell) adjourned.

page 1694

EXCISE TARIFF BILL (No. 3) 1956

Bill presented by Mr. Osborne, and read a first time.

Second Reading

Motion (by Mr. Osborne) proposed -

That the bill be now read a second time.

Mr CALWELL:
Melbourne

– With the concurrence of honorable members, I shall discuss the Customs Tariff Bill (No. 4) 1956 and the Excise Tariff Bill (No. 3) 1956 together. I desire to offer a few observations on behalf of the Opposition about the customs duty and excise duty which the Government is levying on cathode ray tubes. The amount of duty imposed on these tubes, whether they have been made in Australia or imported, is to be £7 a tube. Those who hope to get very rich out of television, of course, wish that the Government would introduce no such measure. I do not object to what the Government has done. I am only sorry that the Government has not made the duty £70 a tube. I think it would be much better for the community if we did not have television at this particular time, but devoted ourselves to providing the things that are so necessary to the well-being of society. We can well do without television while we have sewerage mains and water mains to lay and roads to make.

The Government has said that it will collect £210,000 under these measures. What is that in a budget of £1,200,000,000, which is a record high? The Government is rich beyond the dreams of avarice, and yet it wants this extra £210,000. It would not matter, really, whether the Government got it or not. This amount of £210.000 is to be raised by customs and excise duties at the rate of £7 a tube, and will be payable by the only people who will have any benefit from television. They will be the 30.000 people living in Sydney and Melbourne, the capital cities, who will have installed television sets. I am told that a television set cannot be bought for less than 215 guineas. I do not want one, and I do not intend to buy one. 1 do not even intend to invoke the assistance of any hire-purchase company to enable me to get one. Most honorable members on this side of the House have adopted the same attitude and I think that quite a lot of the impecunious members who support the Government will have adopted that attitude, also. At any rate. 30,000 people are to receive whatever the benefits television may have to give. I have read enough about it in the American and English press to realize that it can be as much a menace as a benefit. However, all that was discussed when the broadcasting and television legislation was before the House. I merely wish to say that, in encouraging the establishment of television at a time when so many thousands of good young Australians are trying to raise families and establish homes we are embarking upon a dangerous experiment. These young people are in want, not of luxuries, but of amenities including roads, water supply, electricity and so on, which the State governments and the municipalities want to give them.

Mr Haylen:

-It is doubtful whether the Government will raise the sum estimated. There may not be as many television sets as it imagines!

Mr CALWELL:

– There may not be sufficient television sets to produce revenue amounting to £210,000. Of course, the Government, adept at the old game of greasing the fat pig, will give everything that it possibly can to its own supporters. It will probably try to keep them quiet by having them look at television when they ought to be thinking seriously about the future of this nation. Thirty thousand people in a population of 9.500000 are hardly worth worrying about. Even if one assumed that there would be four viewers to every television set, it would raise the figure to only 120,000.

Mr Osborne:

– Half the street will be there to look at each set.

Mr CALWELL:

– The Minister tells us that half the street will come along to the houses in Bellevue Hill, in Sydney, and Toorak, in Melbourne, where these sets will be located. I do not know how they will be able to jump over the 10-ft. walls that surround these palatial homes. If. on the other hand, the publicans of Australia believe that television will entice people into their bars, to drink more, they may get a surprise. People may come in as viewers, but they -vill not be drinkers for long.

Mr Cope:

– Not when they see the shows hat are being put on.

Mr CALWELL:

– Certainly not if the shows that we have read about are to be allowed on television. I am treading very warily in this matter because I do not know just how far I am away from the bill-

Mr Osborne:

– The honorable member has not discussed the bill at all so far.

Mr CALWELL:

– I have discussed the tact that £7 is to be added to the cost of each cathode ray tube, and have emphasized that it would not matter to me if it vere £17, £27, £37 or £70. I would not care if television did not exist here. All the licences have been given to newspaper companies - but not to all newspaper companies. The “ Daily Mirror “ of Sydney could not get a licence, nor could returned soldiers’ organizations nor churches. A hand-picked board handed all the licences out to the Government’s particular friends. lt was the pay-off for past support.

What I fear is that whatever figure we fix, those who represent the wealthy interests will, once television becomes a reality, derive all the advantages, electorally, and democracy will not be able to function as it should. For that reason. I do not care whether the amount is £7 or £70; but if we are to impose a charge at all the customs duty ought to be higher than the excise duty because everything possible should be manufactured in Australia. Let us think of the conditions that operate in the industry of other countries. England has a 45-hour week, against Australia’s 40- hour week, and a basic wage of £6 1 2s.. compared with our £13 3s. or something equally astronomical - I find it difficult to keep pace with the rises since this Government came into office. The comparison is all to the advantage of the overseas manufacturer.

His employees have no paid holidays and nothing like the sick leave or long service leave enjoyed by Australian employees. It is wrong to suggest that a tube manufactured anywhere else in the world, be it England, Germany, Italy or Japan, should bear no more duty than should a tube manufactured in Australia. If excise duty is £7, the customs duty on the overseas article should be £9 or £10. It could even be £10 or £15.

Mr Osborne:

– That is a matter for the Tariff Board. This is a revenue duty.

Mr CALWELL:

– The burden on the imported articles should be so much heavier, but the Minister tells us that this is a revenue levy, and that the fixing of appropriate tariffs is a matter for the Tarin* Board. Was the board asked its view before the Government brought down this legislation?

Mr Osborne:

– The matter has gone to the Tariff Board.

Mr CALWELL:

– What did the board say?

Mr Osborne:

– It has not considered the matter yet.

Mr CALWELL:

– Perhaps another one or two tariff boards should be appointed so that the Government can get really up to date on the protection of Australian industry. Dozens of matters are awaiting consideration by the Tariff Board.

Mr Osborne:

– What has that to do with this bill?

Mr CALWELL:

– It has nothing to do with the bill. I allowed myself to be led astray by the Minister, who said that the matter had gone to the Tariff Board. Now, when I asked him what the board’s report was he answers, “ What has that to do with this bill? “

Opposition members will allow the measure to pass unopposed, and will hand it to the Government on the end of a long fork, as it were. We do not want television at this stage, and if we had our way there would be no television in this country until the needs of the Australian community had been catered for. In any case, our policy is the nationalization of all radio and television services. 1 do not like the outmoded language that the Government uses in describing the components of radio and television sets. It speaks of “ wireless “ sets. The term “ wireless “ has long since gone out of common usage. If it is in fact “ radio “, why do we not bring our legislation, and our departmental phraseology, up to date and use the word “ radio “. “ Wireless “ means something without a wire.

Mr Turnbull:

– What is wrong with the term “ wireless “?

Mr Haylen:

– The honorable member for Mallee (Mr. Turnbull) is thinking of wirenetting.

Mr CALWELL:

– It is true that whenever the honorable member for Mallee thinks of wire he thinks automatically of wire-netting. We do not like the whole television set-up, or what the Government 4s doing about it. We should not be at all sorry if something happened to delay television for another few years so that, ultimately, it would be introduced, not for the exploitation of the Australian people, but for the benefit of all. It should be available to the people in every part of Australia, not merely those living in comparative luxury in two capital cities. The great mass of the people will not derive any benefit from television. The Government is doing them an injustice in allowing so much material, man-power and finance to be devoted to these inessential things, when so much remains to be done for the better section of the people - the young, hard working section.

The Minister proposes to place a duty, whether by way of excise or custom provisions, on each cathode ray tube. Just how will the Australian people purchase sets that cost £215 each? Why should they not be able to purchase them, as can be done in the United States of America, for not more than 100 dollars each?

Mr TURNBULL:
Mallee

.- I regard the contribution to this debate of the honorable member for Melbourne (Mr. Calwell), who is second in command of the Labour forces in this House, as the best illustration I know of heavy weather as applied to public speaking. He said that he did not care whether the levy on cathode ray tubes was £7 or £70. I would regard that as a very haphazard outlook on the part of a leading member of the Opposition in respect of something that may be of very great importance. He did not care whether the duty was £7 or £701 What kind of statement is that to hear from the Deputy Leader of the Opposition in this chamber?

Mr Calwell:

– I am a socialist.

Mr TURNBULL:

– Furthermore, the honorable gentleman condemned television. Everybody in this country who knows anything about politics knows that speeches made by honorable members opposite when they were in office prior to Labour’s defeat in 1949, showed that a high priority in Labour’s programme was to be given to the introduction of television. Anybody who requires verification of that statement by me need only consult the records in “ Hansard “. Everybody knows how, after this Government came into office, members of the Opposition criticized the Government for delay in the introduction of television.

Mr Chambers:

– No!

Mr TURNBULL:

– lt is all very well for the honorable member for Adelaide (Mr. Chambers) to deny the truth of that assertion, but the “ Hansard “ reports of statements made by honorable members opposite after this Government gained office prove that my statement is correct. Honorable members opposite were asking questions about television such as, “ Why is the Government dithering over television “ ? Now that the Government has made possible the introduction of television to Australia, honorable members opposite are still complaining.

Everybody knows that if the Government had not made the introduction of television possible, the speech of the honorable member for Melbourne, this afternoon, would have been based on the question, “Why is Australia lagging behind other countries in introducing television “ ? He would have pointed out that smaller countries than Australia have the advantage of television. I represent a country electorate, and T realize that, for a long time, my electors will not obtain any advantage from television. The advantage to be had from that modern development will be enjoyed by electors in divisions like the division of Melbourne, represented by the honorable member for Melbourne in this House. But in the area that I represent it is a different proposition. Were I to condemn the introduction of television, it would be understandable, but it is difficult to understand the views expressed by the honorable member for Melbourne, now that the Government has made television a fact.

In passing, I should like to point out that the honorable member for Melbourne revealed to us to-day, for the first time on this Parliament, so far as I know, a Labour point of view that is the direct opposite of what we are always given to understand is Labour’s attitude. I refer to the honorable gentleman’s statement that Australia was at a great disadvantage in competing with manufacturers overseas in the production of television equipment, because Australian workers had the benefit of a 40-hour week whilst workers in other countries work a 48-hour week. Labour supporters in this House have been saying for a long time that Australian workers are able to produce in a 40-hour week as much as, or more than, workers in other -countries produce in a longer working week. But the honorable member for Melbourne, in am attempt to buttress his case - and making a very bad fist of it from Labour’s point of view - said that we have to impose increased tariffs on overseas equipment for the simple reason that the Australian manufacturer has to pay higher wages to his workers than are paid to similar workers overseas, and that Australian workers have the benefit of a 40-hour week compared -with longer working weeks overseas.

Mr Calwell:

– I did not say that at all.

Mr TURNBULL:

– The honorable gentleman may make his apologies later. He said that workers overseas had a 48- hour working week and a lower basic wage. If the honorable gentleman wants to deny that he said that, let him do so in a personal explanation, which I challenge nim to make now. Anybody who wants to find out exactly what the honorable gentleman said can read it in “ Hansard “ tomorrow. The honorable gentleman said that because of the price disadvantage resulting from the 40-hour week and higher -wages in Australia we had to keep out of the country goods that were produced more cheaply overseas.

Mr Bird:

– Are you in favour of the 40- hour week, or not?

Mr TURNBULL:

– Am I in favour of the 40-hour week? I have always maintained that the 40-hour week was introduced an Australia before we were ready for it.

But that matter is not covered by this debate. I merely rose to point out how the present attitude evinced by the honorable member for Melbourne differs from the attitude that he and his colleagues would have adopted had the Government not made the introduction of television to Australia possible. I also wished to point out that he had told us - and it was the first time we had heard it from the Labour side in this House - of the great disadvantage under which Australian industry was operating because of the 40-hour week as against the 48-hour week in other countries. If any member of the Labour party wants to support the contention of the honorable member for Melbourne let him do so.

Mr CAIRNS:
Yarra

.- This legislation is presumably a revenue-raising measure. The justification for imposing customs duty and excise on cathode ray tubes is apparently the raising of £210,000 in the coming financial year. The Minister for Customs and Excise (Mr. Osborne) has not explained why this measure has been introduced, and why the Government is seeking to raise the sum of £210,000 in this manner.

Mr Osborne:

– Yes, I did. I explained it when I introduced the tariff proposals. The honorable member has presumably forgotten that.

Mr CAIRNS:

– The Minister did not explain whether or not it is the intention of the Government to impose this duty for the purpose of raising £210,000, or whether that sum could have been raised in a better way.

It seems to me that there are far more desirable ways of raising £210,000 than this way. First, the Government appears to have supported the introduction of television. Only recently it placed before us legislation apparently directed to the encouragement of the establishment of the television industry; but, at the same time, it has decided to impose customs duty and excise, each of £7, on every cathode valve used in television receivers, thereby increasing the cost of every television set, although we well know that the price of television sets in this country is already too high for most people, being well over £200 a set. The price of a television set will be increased as a result of the imposition of customs duty and excise, not only by the total amount of the duty and excise, but also by an additional profit margin, because the profit margin, based on the wholesale cost, will include duty and excise, lt seems to me that the net result of the Government’s action will be to increase the price of television sets and to make us fear that if only about 50,000 cathode valves are expected to be subject to the duty and excise in the coming year - which will mean that only 30,000 television receivers will be produced - the television industry in this country faces a very dim future indeed. It may well be that the Government is hoping that capital which might otherwise be invested in television will be invested in industry generally, (f that is so the television will find itself, at the end of the year, in considerable difficulties.

This is just one of the odd contradictions of many contradictions of a similar sort right through the Government’s financial policy, if one can call it a policy. On the one hand the Government proceeds to encourage (he establishment and development of a particular industry, like television, whilst on the other hand it imposes a duty of this kind which can only have the effect of retarding the industry. There are many more equitable ways of raising this amount of money than the way that the Government has adopted.

The honorable member for Mallee (Mr. Turnbull) touched on a point raised by the honorable member for Melbourne (Mr. Calwell). The honorable member for Mallee seems to know less about wireless than he does about wire netting. The honorable member for Melbourne said that is was inequitable to impose on cathode ray tubes the same amount of excise as the amount imposed as customs duty - that is to say, £7 in each case - because the conditions of production in a number of countries from which we derive cathode valves are very different from conditions in Australia. He said that there was not only the difference in the length of the working week, but also the difference in wages and conditions of employment.

Mr Turnbull:

– That is exactly what I said he said.

Mr CAIRNS:

– This is a matter which the honorable member for Mallee did not accurately represent in his criticism of the remarks of the honorable member for Mel bourne. The 40-hour week in Australia is of value in itself, and is not to be valued simply on the test that is continually applied by honorable members opposite. According to them the only real test of the value of the 40-hour week principle is the test of material productivity. The 40-hour week brings a condition of life in Australia which is in itself of value. 1 believe the Australian emphasis on leisure and the opportunity to improve and develop leisure, is a most important contribution to Western society. The honorable member for Mallee took the point made by the Deputy Leader of the Opposition out of its context.

Although, in general, this measure is . not being opposed by the Opposition to the extent of dividing the House, it seems to me to be a bill which is full of mysteries, like many other bills which have been introduced by the Government in an effort to raise money during this financial year. I could suggest a dozen different ways of raising the £210,000 which the Government expects to receive under this measure. The methods I could suggest would have a far better effect than this bill on the distribution of income, on the allocation of resources between one kind of production and another, and on inflation. This Government professes to be most concerned about inflation, but rarely goes beyond the mere profession of concern. These are matters on which the Opposition has a right to ask questions, regardless of whether we oppose the measure. I should like the Minister to explain to the House why the Government has chosen a tax of this sort to raise £210,000 during this financial year. Has the Government considered any alternative measures, or does its planning of financial measures not extend to the weighing up of alternative measures of raising the amount of revenue that it expects to raise by this measure?

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The bill proposes to impose a customs duty of £7 and an excise duty of £7 on each cathode ray tube. Whether the tube is manufactured in Australia or imported from the United Kingdom, the amount ultimately to be paid by the consumer will be not £7. but £7 plus the amount which the various handlers of the tube will charge as being a fair and reasonable profit on their outlay. Goodness

Knows what it will actually cost the buyers of television sets by the time they pay all the middlemen, the wholesalers and the other people who seem to consider themselves justified in imposing some additional charge upon whatever charge is made by this Parliament! One thing that is certain, however, is that the bill will not do anything to assist local manufacturers, lt will compel local manufacturers to pay by means of excise the same amount as the importers of these tubes will pay in the form of tariff duty. The importer will be at a disadvantage compared with the local manufacturer only if the cathode ray tube is imported from the United States of America, Germany or some other country outside the British preferential tariff bracket.

I am at a loss to understand why the Government has made this decision, which cannot assist local manufacturers to compete with overseas manufacturers, and why the Government has .decided to impose the same amount of duty on all tubes, regardless of size. The same amount of duty will be charged on an 8£-in. tube as on a 24-in. tube - and even on a 27-in. tube, when the day comes when we can get those tubes here. In other words, the man who can afford a television set with only a 14-in. or 17-in. screen will pay as much duty on the component which provides the picture - the cathode ray tube - as will the person who has enough money to buy a set with a 21 -in., 24-in. or 27-in. screen. The Government should have introduced a sliding scale, so that a very much lower customs duty, and certainly a very much lower excise duty, would be charged on the 8i-in. tube than would be charged on a 24-in. tube. The Government would help the position considerably if it would reduce the amount payable on an 8i-in. tube and increase by the same amount the charge on the larger tubes. That is what I advocate in this case.

The main argument of the Government in favour of the introduction of television into Australia has been that the establishment of a television industry here will assist this country to become self-supporting in radar and other electronic devices. We have been told that a television industry is necessary in this country so that Australian technicians can be taught the engineering techniques in radar, and so be ready in the event of another war. How can the Go vernment justify the statement that it is encouraging the television industry so that Australian technicians may be trained in this work when the decision enunciated in this bill gives no encouragement whatever to local manufacturers! I have seen the Australian cathode ray tubes being manufactured. The process is most involved, and the Australian manufacturers are doing a very good job. Indeed, it could be said with truth that the Australian-made cathode ray tubes are probably superior to any of the imported tubes. However, the Australian manufacturer observes a 40-hour week and the annual leave and sick leave provisions which are characteristic of Australian awards. But his product is subject to the same rate of duty as the imported component! How, then, can he make a product at a price which will enable him to compete with manufacturers in Japan, where a 48-hour or even a 56-hour week is observed, or with manufacturers in Germany, where working conditions are not so advantageous to employees as are conditions in Australia?

I cannot understand why the Government continues to grant import licences to companies that are importing the items which are affected by this bill. I understand that only last week the Minister for Trade (Mr. McEwen). before he went overseas, issued another permit to the Admiral television company for £27,000 worth of imports. This company has been permitted already to import from the dollar area television components worth £100,000. Those components can be made, should be made, and are being made in Australia. Despite the protests made here and the objections of the Postmaster-General (Mr. Davidson), 1 am reliably informed that this company last month was issued with a further licence to import components worth £27,000. We were told that the suggestion that Amalgamated Wireless Valve Company Proprietary Limited had been refused a similar licence was not true. I have made further inquiries and have been told that what 1 stated in the Parliament last week was perfectly correct. -Unfortunately, I referred to Amalgamated Wireless. If I had said “ Amalgamated Wireless Valve Company “, which is owned by Amalgamated Wireless, I. may have got a more truthful and a more accurate reply. But the fact is that Amalgamated Wireless Valve Company was refused an import licence. The company had to go away and buy licences from other people.

Mr Osborne:

– This has nothing to do with the bill.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I know that it has nothing to do with the bill. I mention it merely to indicate that the bill, which might be expected to assist local manufacturers, does just the opposite. It compels local manufacturers who are paying high wages, observing a 40-hour week, and giving good annual leave and sick leave, as well as, in some States, long service leave, to try to compete with manufacturers in countries where such conditions do not operate. If the Government wishes to encourage local industries, this industry should not be excepted. The local manufacturers should be given a decided advantage over importers. I believe, moreover, that there should be a differentiation between the 8i-in. cathode ray tube and the 24-in. tube, which may be imported, instead of allowing large and small to come in at the same flat rate.

Mr OSBORNE:
Minister for Customs and Excise · Evans · LP

– in reply - When I introduced these tariff proposals on 30th August last, I explained that they were in pursuance of a decision by the Government to apply a duty of £7 each to both imported and locally produced cathode ray tubes used in television receiving sets, for the purpose of raising revenue to make a contribution to the cost of introducing television in Australia. The honorable member for Yarra (Mr. Cairns) made some nonsensical criticism of me because I had not explained anything about this measure. He overlooked, through either carelessness or ignorance, the fact that the explanation was made two months ago, when the measure was introduced. At the present time, cathode ray tubes are free of excise duty if made in Australia, and if imported, are dutiable at the rate of 12i per cent, ad valorem when they do not qualify for preferential treatment.

The Government has decided that a satisfactory way to raise additional revenue, in order to pay for a part of the heavy cost of introducing television, is to impose the proposed duty on cathode ray tubes. There is nothing unusual about a duty of this kind. An excise duty and a customs duty have been charged on radio valves for many years, and this is simply an application of the same principle. I do not propose to go into arguments, at this stage, about the advisability of introducing television. Thai whole matter was debated at great length when the Broadcasting and Television Bill: 1956 was before the Parliament. I think it safe to say that most Australians appreciate that it is not in the national interest to restrain for ever the use of technical: advances, such as television, despite thepassing problems that they may bring in their train. We cannot hamstring Australian industry indefinitely. However, I think that that matter was dealt with fully during the passage of the Broadcasting and1 Television Bill, in the last sessional period.

The honorable member for Hindmarsh (Mr. Clyde Cameron) complained about the imposition of a duty at the source.. He said that it would be subject to manufacturer’s profit and retailer’s profit, so that by the time it reached the consumer the cost would be greatly inflated. That argument, I believe, is completely incorrect. As the whole House knows - and so, too. does the world outside this place - the manufacture of television sets is already a very highly competitive business. The manufacturer of television sets will be compelled, by healthy competition, to be content with a reasonable return on his work and on the cost of materials supplied, and he will not. in fact, be able to charge inflated costs on the amount of duty imposed by this bill. If there were a single manufacturer living in protected isolation, there might be some point in the argument of the honorable member for Hindmarsh, but as it is, with the very good competition - almost cutthroat competition - which one observes in the sale of television sets, it is unreasonable to suggest that manufacturers will be able to charge duty ad lib on every element, and to charge increased costs on every amount of duty they pay.

I think that the honorable member raised’ a more interesting argument when he suggested that there should be a differential rate of duty according to the various sizes of cathode ray tubes. This suggestion was put forward seriously, and it has been examined. The Government has decided not to make any differential charge in respect of tubes of different sizes, at any rate for the time being.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Why not?

Mr OSBORNE:

– For the simple reason that this is, first, a revenue duty which sets out to raise a certain sum from every buyer of a television set as a contribution towards the cost of the introduction of television; and secondly, it is believed, at the present time, that the 17i-in. tube, the average-size tube and the one being manufactured in quantity in Australia, will be the tube used in the vast majority of sets, and that if a differential rate were introduced, although it might be possible to give a slight concession in respect of the smaller sets and to impose a much heavier duty on the relatively few larger tubes, the assessment of the amount of duty would be difficult. In any case, it is undesirable, at this stage, to try to guess the future choice of the public concerning the size of tubes they will use. But there is no reason why, at some time in the future, that matter should not be raised again.

The honorable member for Hindmarsh referred, in passing, to the difficulties of Australian manufacturers in contending with the costs of a 40-hour week, sick leave, and the other very good conditions which Australian workers enjoy. In doing so, he puts his finger on a prime difficulty of Australian manufacturers to-day. I do not believe, nor does the Government to which I belong, that there should be restriction of the conditions which Australian workers -enjoy. We are, as was the Opposition in its turn, justly proud of the excellent working conditions in this country; but there is the corollary, to-day, that if we are to hold our place in the world, to export goods and to keep our costs within limits, then we must, by means of efficiency and goodwill, produce more. It is only in that way, in the long run, that good working conditions can be maintained. We must produce more efficiently and more effectively if we are to preserve them.

The speech of the honorable member for Yarra was notable, I thought, only for the fact that, his deputy leader having said that the Opposition would support the bill, he immediately began to denounce it - another example, I suppose, of the cohesion of the Opposition which the House has observed during the last year or so! The honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition, approved of the imposition of a duty on television sets. He said that he wanted the duty to be higher. He wanted it multiplied by ten, or even by 100, to make it £70 or even £700, so that nobody should have a television set. The House is accustomed to his whimsical arguments and treats them in the proper spirit, but I am glad that he does support the principle of a duty in this respect. He then asked why was there not a differential rate between customs duty and excise duty. That is a perfectly serious argument, and I shall give it a serious answer. This is a revenue duty, and it was imposed only on 30th August last. I am in a position to inform the House that the Minister for Trade (Mr. McEwen) has referred the question of a protective duty on Australian cathode ray tubes to the Tariff Board. Honorable members opposite know, as well as do those on this side of the House, that the settled Australian policy, both of the Australian Labour party, when in office, and of the present Government, is not to impose protective duties without prior reference to the Tariff Board. There was some complaint about delay, but the duty was imposed only on 30th August. No reference to the Tariff Board could be made before then, and, indeed, I understand the reference has been made with commendable promptitude.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– How long will it take to settle?

Mr OSBORNE:

– That is another matter. The fact is that the Government has been criticized for not dealing with the question of protection, but this criticism falls to the ground because the question of protection has been dealt with. The other comment that I recall in the speech of the Deputy Leader of the Opposition was an objection to the phraseology of the tariff schedule. He objected to the use of the word “ wireless “ which he said went out of date long ago and that the word now used is “ radio “. We are accustomed to use oldfashioned and sometimes archaic terms in acts of Parliament, regulations, and standing orders. Indeed, frequent reference to Her Majesty’s Opposition will be found in the reports of our proceedings, but the whole House knows that effective opposition in this chamber ceased months ago. Internecine warfare is conducted on the Opposition side of the chamber now. I do not think it is necessary to go into this matter any further. The duty proposed is a revenue duty, to raise an estimated amount of £210,000 per annum towards the cost of television, in its introductory stage, in Australia, and the measure deserves the support of the House.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Third Reading

Motion (by Mr. Osborne) proposed - that the bill be now read a third time.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I rise only to ask the Minister whether he can tell the House in what way the Government proposes to spend the money to be raised towards offsetting the cost of the introduction of television.

Mr OSBORNE:
Minister for Customs and Excise · Evans · LP

– I understand that the amount raised will be paid into general revenue and can be offset in that way against the heavy government costs involved in the introduction of television.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Will it go to the private television companies?

Mr OSBORNE:

– Of course not.

Question resolved in the affirmative.

Bill read a third time.

page 1702

CUSTOMS TARIFF BILL (No. 4) 1956

Second Reading

Debate resumed (vide page 1694), on motion by Mr. Osborne -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1702

SUPERANNUATION BILL (No. 2) 1956

Second Reading

Debate resumed from 18th October (vide page 1602), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr COSTA:
Banks

.- The bill before the House is designed to amend the Superannuation Act 1922-1955 in order to implement the recommendations of the committee which made the quinquennial investigation into the superannuation fund. Two or three small amendments are proposed, which will give some advantage to contributors. Naturally, the Opposition supports the bill because it seeks to improve the lot of superannuitants. There is disappointment, of course, because the Government has failed to propose any amendments which would bring advantage to the contributors. The Retired Officers Association, and also current contributors to the fund, believe that the unit value should be increased by 2s. 6d., and other suggestions for the improvement of the fund have been made. The Australian Labour party supports this bill to the extent that it does propose improvements. Those persons who have contributed to the fund on the basis of retirement at age 60 and who remain in the service, will benefit from its provisions Their contributions, of course, cease at age 60, and they receive a varying percentage increase of that portion of the annuity which is attributable to their own contributions according to their years of service after having attained the age of 60 vears That allowance has been very slightly increased. Prior to the adoption of the committee’s report, an officer who continued to serve in these circumstances for one year received an increase of 5 per cent. in respect of that portion of his annuity which was attributable to his own contributions. That proportion has been increased to 6 per cent. It rises, after five years’ service to 37 per cent., whereas formerly he would have received a maximum increase of 31 per cent. That increase is not very great having regard to the fact that the superannuation fund benefits when officers remain in the service in such circumstances because the payment of their pensions is deferred for the additional period of their service.

I should like to refer briefly to other matters contained in the quinquennial report. This was the third time in which the fund was investigated. A report was made in 1937; I do not know whether there was an earlier investiaation. The act was introduced in 1922, but the first quinquennial report in 1937 showed that the fund had suffered a deficiency of £331,000. The next quinquennial report in 1942 revealed a deficiency of £304,000, which by 1947 had been reduced to £140,000. The latest report shows that the fund in 1952 had a surplus of £653.000. The Australian Labour party contends, therefore, that consideration should have been given to increasing the value of the unit of superannuation. I know there is no provision for this in the act, but I should like the committee at some time to report to the Parliament on how much the public service superannuation scheme saves the community in the way of expenditure on social services. It is to be noted with satisfaction that, after the deficiencies shown by the previous investigations, the actuary is able to report a surplus for the first time.

The Commonwealth Superannuation Act was passed in 1922. In the opinion of all concerned, the scheme then was really good. The value of a superannuation unit was 10s. a week, and at that time the purchasing power of 10s. was quite substantial. However, inflation, which this Government has taken but little action to curb, has destroyed, to some extent, the value of the superannuation scheme, in much the same way as it has adversely affected the value of several other forms of long-term investment. At one time, a man could take out an insurance policy for a certain purpose, knowing that when the policy matured the sum of money that he received would be sufficient for the purpose that he had in mind, but that is not so to-day. Inflation is also destroying the value of the peoples’ savin :s. It is compulsory for public servants to contribute to the superannuation fund. Although an officer may consider that, because of inflation, the scheme is not a good one, he is compelled to contribute to the fund, if he is under the age of 40 years. From the age of 40 years upwards the matter is optional.

Commonwealth public servants, in addition to paying superannuation contributions, pay taxes at the same rate as everybody else, but in many cases their superannuation pensions will be such as to disqualify them from entitlement to a social services pension, because of the operation of the means test. Those people are paying for two social security schemes, but they will be entitled to receive benefits from only one. I point out that income tax instalments and superannuation contributions represent a fairly substantial proportion of a public servants pay.

In 1922, the basic wage was £4 a week and the age pension was 15s. a week. At that time, many officers of the Public Service were contributing for what they thought would be a reasonable pension. They had taken out four units of superannuation, which, as a unit then was worth 10s. a week, entitled them to a pension of £2 a week on retirement. They believed that a pension equal to half of the basic wage was reasonable. Let us look at how the basic wage, the age pension and the value of the superannuation unit have increased since then. The basic wage has risen from £4 to £13 14s. a week, the age pension has risen from 15s. to £4 a week and the value of a superannuation unit has risen from 10s. to 17s. 6d. a week. Officers who had contributed for four units, as a great many did, drew on retirement in 1922 a pension of £2 a week, which was 266 per cent, of the age pension. Since 1922, the basic wage has increased by 242 per cent, and the age pension by 433 per cent., but the value of a superannuation unit has increased by only 75 per cent. Those figures show the degree to which, owing to the ever-increasing cost of living, the value of superannuation pensions has declined over the years. Inflation has thrown out of gear the retiring plans of many officers.

I read recently in a report of the Superannuation Board - I am pleased to say thai the information contained in the reports now is more up to date than it was for some time after the unfortunate burning of the board’s records - that the average public servant contributes for nine units of superannuation, which entitles him to a pension of £7 17s. 6d. a week on retirement. The widow of such an officer would receive 50 per cent, of that amount - £3 18s. 9d. a week. Honorable members will see that the average contributor just deprives himself of entitlement to a social services pension by contributing to the fund. If a married officer contributed nothing to the fund, he would be entitled at the appropriate age to an age pension for himself and his wife amounting to £8 a week. If he died before reaching retiring age, his widow would receive from the Department of Social Services an A class widow’s pension of £4 15s. a week. Therefore, the average contributor to the Superannuation Fund would be better off on retirement if he had contributed nothing to it.

A total of 78,000 permanent officers subscribe to the fund. That figure does not include those officers who subscribe to the Provident Fund. One-half of the contributors to the Superannuation Fund contribute for nine units, which entitle them to a pension of £7 17s. 6d. a week. The thousands of officers who contribute for nine or more units deprive themselves of the right to an age or an invalid pension. It is important that their positions should be made clear. We know that a married couple drawing an age or an invalid pension receives £8 a week from that source and that they are permitted to have an income from other sources of not more than £7 a week. A superannutant who contributes for nine units, entitling him to a pension of £7 17s. 6d. a week, deprives himself of 17s. 6d. a week in social services payments. A SUper.annutant who contributes for ten units, entitling him to a pension of £8 1 5s. a week, deprives himself of £1 15s. a week in social services payments. A superannutant who contributes for eleven units, or a pension of £9 12s. 6d. a week, deprives himself of £2 12s. 6d. in social services payment. A superannutant who has taken out twelve units, entitling him to a pension of £10 10s. a week, deprives himself of £3 10s. a week in social services. A superannutant who has taken out thirteen units, entitling him to a pension of £11 7s. 6d. a week, deprives himself of £4 7s. 6d. a week in social services payments. A superannutant who has contributed for fourteen units, or a pension of £12 5s. a week, deprives himself of £5 5s. a week. A superannutant who has taken out fifteen units, entitling him to a pension of £13 2s. 6d. a week, deprives himself of £6 2s. 6d. a week. A super.annutant who has taken out sixteen units, entitling him to a pension of £14 a week, deprives himself of £7 a week. A super.annutant who contributes for seventeen units, worth £14 17s. 6d. a week on retirement, deprives himself of £7 17s. 6d. a week in social services payments. Any one who contributes for more than seventeen units deprives himself completely of social services benefits. I do not doubt that there are thousands of public servants in that position. 1 should now like to mention the Provident Account, which provides for officers who enter the service at 45 years of age or more, or in a temporary capacity, or who are not eligible to contribute to the Superannuation Fund itself. Such officers pay fortnightly ls. in the £1 of their salary, and on retirement receive a lump-sum payment of three times the total of their contributions, plus compound interest on their contributions of 3 per cent, per annum. There are about 10,000 contributors to the Provident Account. Such officers serve a» average of about 25 years in the Commonwealth Public Service and contribute sufficient to entitle them to a lump-sum payment of between £2,000 and £3,000. They also are affected by the means test, and they are deprived of full social services benefits although they have paid contributions over a considerable period for their Provident Account benefits.

Public Service organizations are interested also in obtaining better pensions for the widows of superannuated officers. They receive half the rate payable to the husband, plus 10s. a week for each child under sixteen. This pension ceases if a widow remarries, and quite a number of them do. This redounds to the benefit of the fund. The average pension for a widow is about £3 18s. 9d. a week. Since the permissible income under the means test is £3 10s. a week, the widow of an officer who contributed for a pension of nine units is deprived of portion of the social’ services benefits. Under the Social Services Act, an A-class civilian widow receives £4 15s. a week, plus 5s. a week for each child under sixteen, for which no contributions have been paid. The Public Service organizations suggest that the widow’s rate should be four-fifths of the pension for which the husband contributed. This would make the average pension for widows of deceased officers £6 6s. a week instead of £3- 18s. 9d. a week, plus 10s. a week for eachchild under sixteen. Since such an arrangement would effect considerable savings insocial services payments, the amount could be increased even beyond that. As 1 pointed out, the Retired Officers Association requests that the value of the pension unit be increased by 2s. 6d. a week. If this were done an officer who at present contributes for a pension of £7 17s. 6d. a week would be entitled to a pension of £9- a week. But even this would be £4 14s. a week below the basic wage. The report of the sixth quinquennial investigation of the Superannuation Fund shows that it has- made a surplus of £653,326, which is the first surplus it has shown. This report and the Auditor-General’s report for the financial year 1955-56 show that the fund is buoyant and could stand the increases of pensions that have been suggested.

Many officers who were contributing ten years ago for retirement at 60 years of age believed that their superannuation would meet their financial obligations on retirement. But the cost of living has increased so greatly since 1949 that those officers find it difficult to provide for their needs between 60 and 65, for they are not eligible for social services benefits until they reach 65. Present contributors and former officers who have retired on superannuation are constantly worrying and wondering when the Government intends to take a stand against inflation and stabilize the economy. This would assure their future. The favorable report of the sixth quinquennial investigation of the Superannuation Fund and the Auditor-Generals’ report for the year ended 30th June, 1956, show that the suggested increases of pension are warranted. The Auditor-General’s report shows that the fund is in a very healthy condition. Contributions by officers during the financial year 1955-56 amounted to £5,461,913, and receipts from the Consolidated Revenue Fund amounted to £3,276,573. Interest earned on the investments of the fund totalled £1,728,128, and there was a miscellaneous item of receipts of £22,000, making a total of £10,488,614. Pensions paid amounted to £3,858,056, and lump-sum payments amounted to £460,711. Refunds paid totalled £584,241 . The total payments out of the fund amounted to £4,903,008. So it can be seen that the income of the fund greatly exceeded its expenditure last financial year. That is another argument in support of my contention that the Government should have taken the opportunity while the principal act is being amended to increase the value of the unit by 2s. 6d. a week.

Increases are apparent in every aspect of the fund. For example, in 1950 contributors totalled 56,980. In 1954 the total number was 78,351. This indicates that the fund is improving its solvency all the time. Because contributors are receiving the benefit of the present high wage levels, they contribute more to the fund, and its revenue is continually increasing. I think present contributors have an obligation to those who contributed in the past and find, themselves in difficulties to-day owing tothe upsurge of the cost of living in the last five or six years. I regret that the Government has not taken this opportunity tomake the improvements to the superannuation scheme that I have suggested, especially by increasing the value of theunit in order to help superannuated officers who are so severely hit by the present high cost of living.

Mr SNEDDEN:
Bruce

.- Thehonorable member for Banks (Mr. Costa> has said that this measure will effect very slight improvements to the superannuationscheme and that he is therefore disappointed with it. I find it extraordinary that he should think the improvements will be very slight. On the contrary, I think they will be considerable. They are designed to correct certain drafting weaknesses on the onehand, and to effect a progressive improvement of the conditions, particularly the superannuation, of Commonwealth publicservants on the other hand.

Mr Bryant:

– Any consideration received from this Government is certainly a great surprise.

Mr SNEDDEN:

– 1 am not surprised at the honorable members’ attitude. He probably has not even examined the bill. If he studied it he would discover that it is not so simple as it may seem. A bill that comes before this House usually states that it will take effect from a date to be proclaimed or from a specific date. This bil] states that, with the exception of three clauses, it will take effect on a date to be proclaimed. In the case of those three clauses, which are important ones, a specific date is mentioned from which they will take effect.

The first of these exceptions is clause 6, which provides for an amendment to correct a draftsman’s error. As mentioned by the honorable member for Banks (Mr. Costa), the most recent quinquennial report, for the period from 1947 to 1952, was the first such report to disclose a surplus. Previous reports all disclosed deficits. It is only since this surplus has been disclosed that the weakness in draftsmanship has been revealed. The principal act, as it now stands,. says that the amount contributed by the Commonwealth to ensure that an interest rate of H per cent, shall be maintained will be “ set off “. The legal people who give opinions on these matters say that set off “ relates to something in the future, and that such a provision, therefore, cannot apply to the surplus revealed by the quinquennial report. The Commonwealth contributed £223.000 during the relevant fiveyear period to ensure the maintenance of an interest rate of 3i per cent. The amendment to the principal act which is provided by clause 6 of the bill is to apply from 1st July, 1947, the commencement of the period covered by the quinquennial report.

The two other exceptions to which I referred are contained in clauses 10 and 15, and if the honorable member for Banks thinks that these are very small improvements, I am sure that they will not be so considered by the temporary employees in the Commonwealth Public Service who are at present contributing to the Superannuation Fund, and who may be affected by these provisions. Under existing legislation, a temporary employee may contribute to the Superannuation Fund after having been employed for three years in the Commonwealth Public Service, provided that the Public Service Board certifies that his employment is likely to continue for another seven years. He may then, if he so elects, become a contributor to the Superannuation Fund. The important point is, however, that if he wishes to improve his position by transferring to another department, he must offer his resignation, take a lump sum from the Superannuation Fund, then go to the other department and be employed there for three years before he may become eligible to contribute again to the Superannuation Fund, and again he must take the chance of having the Public Service Board certify that his employment is likely to continue for seven years. In these circumstances it is difficult for a temporary employee to improve his position by transferring to another department. I regard this amendment, contained in clause 10, as a great and real improvement.

This clause is another example of a provision of the bill that will apply from a specific date. It will not take effect from a date to be proclaimed; it will apply as from 1st November, 1954. That date has been selected because it was on that date that a system was adopted, which was not strictly legal - which was really not legal at all - under which a temporary employee who transferred from one department to another was not required to accept a lump sum from the superannuation fund but, by an act of of grace, was allowed to continue his superannuation payments. Clause 10 of the bil) will regularize this practice. Clause 15 of the bill makes a similar provision with regard to the provident fund. The existing legislation contains anomalies for temporary public servants in relation to the provident fund similar to those that I have just mentioned regarding the superannuation fund, and this bill will resolve them.

While this legislation represents a real improvement, I suggest to the Minister f0 Labour and National Service (Mr. Harold Holt), who is sitting at the table, that it does not go far enough. There are many persons, mainly women, who have been temporary employees in the Commonwealth Public Service in Australia, and who have gone to England, after having obtained annual leave or leave without pay, and who have then been employed in England on the staff of the High Commissioner. But the High Commissioner’s Act provides that the High Commissioner must recommend to the Minister that such an employee be permitted to continue contributing to the superannuation fund. Many of these persons, particularly single women, having taken up duty on the staff of the High Commissioner, and having maintained continuity of employment, have asked that the Minister make the necessary certification so that they may continue their contributions, but have found that the Minister has declined to do so. As a consequence, many of them have left that employment and allowed a period of time to elapse, before recommencing employment with the Commonwealth Public Service in Australia in a temporary capacity. Their employment has been broken as a consequence, and this legislation allows them no relief. As an unfortunate consequence, such single women are reluctant to go to Great Britain, because they fear they will not be allowed to continue their superannuation payments, that being a matter of absolute importance to unmarried women, who must provide for the future. I suggest to the Minister that it may yet be possible to introduce a further amendment to grant relief to persons in this unfortunate position.

After having looked at the remainder of the bill, 1 must congratulate the Parliamentary Draftsman on having adopted a practice, in clause 3, that I should like to see adopted with all legislation. The Draftsman has had the foresight to set out in parentheses, after the parts of the bill as enumerated in this clause, the clauses that are included under those various parts. This enables one to turn to the part of the bill required, without having to go through the measure clause by clause. I believe that this system should be adopted with regard to all legislation that comes before this House. Indeed, I think that every one who has to deal with a piece of legislation such as this uses some similar system of indexing, and the Parliamentary Draftsman is to be commended for having adopted this practice.

Clause 4 is an interesting provision. It is consequential upon the recent legislation passed by this Parliament with regard to the Commonwealth Industrial Court and the Conciliation and Arbitration Commission. But for this legislation the interesting situation may have arisen in which presidential members of the Conciliation and Arbitration Commission may have been entitled to two lots of retiring benefits, one under the Judges’ Pensions Act and another under the Superannuation Act. Clause 4 is designed to prevent such a situation arising. Up till now, a quinquennial report has never disclosed a surplus. In consequence, clause 5 of the bill is designed to draw to the actuary’s notice that before he recommends in what manner additional benefits can be paid to the contributors to superannuation schemes, he should take into account the amount that the Commonwealth has put in to ensure an interest rate of 3) per cent.

Clause 8 of the bill is designed to give effect to the actuary’s recommendations, which are contained in the quinquennial report. In accordance with the principal act, the actuary has recommended that pensions to be paid to people who continue m the service after the date upon which i hey are eligible to retire should be increased. This legislation approves the actuary’s suggestion. The actuary has stated that the fund can now bear these increased demands. The honorable member for Banks said that the increases are not enough. He said that they should be greater, because the person, if he were noi working, would receive a 100 per cent, pension. I prefer, with great respect to the honorable member for Banks, to accept the recommendation of the actuary to the recommendation of the honorable member as to what amount the fund can pay by way of an increase.

If we look at the history of this matter, it will show us something interesting. Up till 1947, a person who could have retired at 60 years of age but who continued working after that age, received on his ultimate retirement his pension and nothing more In 1947, when the present Government was not in office, legislation was introduced to give such people an increase of pension Instead of getting only a 100 per cent, pension on retirement, if they had worked for one year after the age at which they could have retired, they received, in addition. 5 per cent, of the portion of the pension equivalent to their contribution. If the’ had worked on for two years, they received a greater amount, for three years an even greater amount and so on. I think thai the rates paid ranged from 5 per cent, up to 31 per cent. That provision was made in 1947 and it applied only to people who had retired after 12th June, 1947; so that when the act came into force it applied to nobody.

Some people who had retired within the few years prior to 1947 had worked in the Commonwealth Public Service during the war years after their normal retiring age. They were alarmed at this proposal and there was a great deal of campaigning among them to influence the government to change its mind and post-date the payments. The government was adamant, and refused on the ground that the fund could not, on the actuary’s advice, pay the additional amount sought.

But in 1951, when the present Government was in office, a change was made Legislation was introduced to backdate the payments. The actuary said, in effect, “ You cannot do this. The fund will not bear it.” The Government said. “We will accept the responsibility, and make sure it is paid “. The Government in that way brought a great measure of relief to many people. Now, the bill before the House proposes to increase the rate paid to superannuated people who work past the retiring age. Those payments will be back-dated to 4th July, 1952. Those people who, had this measure been passed in 1952, would have been getting 6 per cent, instead of 5 per cent, or 13 per cent, instead of 1 1 per cent, or 20 per cent, instead of 1 7 per cent., will receive a lump sum payment, dating back to the first pay period after June, 1952 - that is the 4th July, 1952.

There is only one more point to which I want to address myself. That is in relation to clause 6. It was interesting that the honorable member for Banks spent most of his time complaining that the amount of the unit had not been increased. In its initial stage, the amount of the unit was 10s. of which the contributor paid 5s. and the Government paid 5s. The amount of the unit is now 17s. 6d., of which all the increase is borne by the Government. So, of the unit of 17s. 6d., 12s. 6d. is contributed by the Government and 5s. by the contributors to the fund. The honorable member for Banks put up what might seem to be a reasonable proposition, but when one looks at it, one finds that it is so fallacious that it is almost funny. He said that because there was a surplus - a gross surplus of £653,000, of which £203,000 has to be paid back to the Commonwealth, leaving a net amount of £450,000 - we ought to be able to increase the amount of the unit. How long does the honorable member for Banks think a surplus would remain if it were distributed among all the superannuated public servants? If one resolved it, the amount would probably be 3d. for each person. An increase in the amount of the unit requires a greater contribution by each individual contributor. The honorable member for Banks said that we must bear in mind the big difference between the alleged salaries of public servants and the amounts that they take home after superannuation and tax have been deducted. On the one hand, he wanted the unit to be increased out of the surplus in the fund; and again, he said that there must not be too big a cleavage between nominal salary and the amount actually received. In other words, he said, “ Do not increase the amount of contribution of each individual contributor but give each contributor more out of this fund “. But the figure of £450,000 is relatively insignificant in this connexion. 1 think it is indeed very pleasant that, for the first time, the quinquennial report has disclosed a surplus. But, please do not let us assume that the surpluses will grow and grow, or that a surplus of that magnitude could do the job that the honorable member for Banks has asked that it should do!

Mr CREAN:
Melbourne Ports

.- I should like to support the honorable member for Banks (Mr. Costa) in his remarks about this bill. The honorable member for Bruce (Mr. Snedden) had some interesting remarks to make on it and went quite deeply into the amendments that are before us. This is one of those rather complicated pieces of legislation that come to this House at times and which, in many respects, is above the ability of the average layman to decide. I feel that, when measures of this kind are contemplated and an amendment is not required to be made in a great deal of haste, it ought to be referred to a select committee of the House for investigation.

The matter of superannuation is very important. Its origins go back to the days when there were very few welfare State schemes such as we have now and the public servant hoped, at least in conjunction with the Government, to be able to provide against his old age. To some extent that basis has gone now and in a modern community it is accepted that the State, as a whole, should make provision for people in their old age. To some extent - and this matter was aired during the debate on the Estimates - the suppositions that originally underlay superannuation have been cut away. It is time that this Parliament looked at the whole question of superannuation, especially as it effects future contributors, in the light of the community’s attitude to such broad questions as the ultimate - and I emphasize the word ultimate - abolition of the means test.

We must bear in mind that the superannuation fund, as we know it, meets the needs of three main classes of people: those who are already drawing their pension; those who have retired or are about to retire, from the Commonwealth service; and those who are at various stages of making contributions. The last is by far the largest class and some members of it will contribute for a great many years yet.

It is impossible merely by looking at the small amount paid into the fund, and the amount going out of it, to come to any clear conclusion about it unless one is also armed with all sorts of statistics as to ages on retirement, likely recruitment into the Public Service and so on. In fact, superannuation is bound up with two aspects of government policy. The first is the number of people who are employed by the Government. This number has doubled in little more than nine years. The figures given in the quinquennial report indicate that at the 30th June, 1947, there were 46,000 contributors and the latest figures available - those for the year ended June, 1955 - give the figure as something like 78,000. It is presumed that, by 1972, that figure will have increased a great deal more.

The second way in which superannuation is tied up with government policy is its relationship to the current interest rate. The actuary conducts his quinquennial investigation on the basis of an estimated interest rate of at least 3i per cent. In 1947, when that percentage was fixed, it may have been quite close to the ruling rate for government securities but, as we know, that rate has now risen to something over 5 per cent. Therefore, the word “ surplus “, as it is used by the actuary, should be placed in inverted commas. It is largely an actuary’s notional figure.

My colleague, the honorable member for Banks (Mr. Costa), referred to the grievance of many public servants about contributing to a superannuation fund and, as a result, being denied the ordinary social service benefits. Any proper evaluation of this question, at least so” far as it affects the future and the possible abolition of the means test, ought to take into account the fact that the public servant does not contribute the whole of the pension which he ultimately receives. As the honorable member for Bruce (Mr. Snedden) has pointed out, his contribution is largely subsidized from Consolidated Revenue. It is, of course, a contract between the Government and its employees, the terms of which vary from time to time, but the public servant, in urging the abolition of the means test, should realize that, as a recipient of superannuation, his position is similar to that of a person receiving the age pension. The Commonwealth pays the whole of the age pension, and also portion of the superannuation of most contributors to the fund. A little more understanding would be brought to this sort of argument if that were made clear from the beginning.

The figures published by the Superannuation Board indicate that by far the major portion of payments have been made, not out of the fund itself, but out of Consolidated Revenue. That does not hold good for those who are contributing now, because there have been adjustments to both units and rates, and the proportion provided by Consolidated Revenue is lower than in the past. Nevertheless, the history of the fund reveals that, of a total of £25,700,000 paid in superannuation to June, 1954, £19,700,000 or more than three-quarters, has come from Consolidated Revenue. That simply adds colour to the argument that it is rather unfair to say that because some one is receiving £8 or £9 from the superannuation fund he is being deprived of £2, or whatever the difference is between his superannuation and the aggregate of superannuation and social service benefit. What is specifically called a “ social service “ benefit is more accurately a payment out of Consolidated Revenue. The superannuated employee is getting the major part of his ultimate pension from the same source. Arguments to the contrary should be investigated on their merits. If that is done, one finds that the retired public servant is not in such a difficult position as he imagines.

If, on the other hand - and the community does take the long-term view in these matters - the means test is ultimately abolished, superannuation funds will largely have been superseded. If a person wants to enter into an arrangement with the Government to save and invest for him a certain amount that he will later receive in addition to his pension, that is his own affair, but there will surely be no point in having an elaborate superannuation system, under which nearly 80,000 people make weekly contributions which must be collected and sent to the Superannuation Board. Then the board must determine how the money will be invested, and so on. There would not be much point in having elaborate machinery of that kind if every one of 65 or 70 years of age automatically became entitled to some sort of pension, as a right. It seems stupid to have duplicated machinery of that kind.

The whole question of superannuation, and even of the means test - I am not one who believes that the abolition of the means test should have a very immediate priority - should be looked at objectively and made the subject of some scheme, even if it involves the payment of additional taxes. At least the community will then be aware of what is involved; how much it will cost; and how it is to be financed. A committee could examine the future of Commonwealth and State superannuation in the light of this ultimate objective.

I have taken this opportunity to make a few remarks about superannuation. As the honorable member for Bruce (Mr. Snedden) has said, this is a rather complicated bill and can be read properly only in conjunction with the Superannuation Act as a whole. It is not a field in which most people care to tread, and this is hardly the way in which a measure of this kind should be presented. Such bills, which are not, for the most part, subject to political opposition, could well be examined by an allparty committee.

Sitting suspended from 5.55 to 8 p.m.

Mr WILSON:
Sturt

.- It is with enthusiasm that I support this Superannuation Bill, because it is a step towards ultimate justice to a fine body of men who, in their younger years, their years of employment, are saving for their retirement, providing themselves with security for the time when they are no longer able to work. Divorced from its frills and from its mysteries, superannuation is nothing more than a system of compulsory saving, coupled with a system of pooling risks. When people join the Commonwealth Public Service on a permanent basis they are compelled to make a contribution towards superannuation. According to the salary grade of the position that they occupy they have certain rights to take out units of superannuation additional to the base number of units in order to provide for their retirement and old age. No means test applies in respect of superannuation pensions and there is, therefore, no discouragement to thrift. When a Commonwealth officer joins this scheme he knows that when the appropriate time comes he will receive either a lump sum payment from the fund, if he retires before the due retiring age, or a regular pension if he retires at, or after, the due retiring age.

At page 26 the Auditor-General’s Report shows that the Commonwealth superannuation scheme is entirely self-supporting, lt is true that the Government makes pro-rata contributions to this fund, but the figures show that payments into the fund by civil servants exceed payments out of the fund to retired civil servants by way of pensions or lump sums. The result is that over a period of years a very large reserve has accumulated in the fund which, as at 30th June, 1956, amounted to £44,388,000. Almost the whole of that reserve is lent to the Government, and therefore plays a valuable part in the development of Australia. For the year ended June, 1956, the contributions to the fund by civil servants amounted to, in round figures to the nearest thousand pounds, £5,462,000. Payments out of the fund to retired civil servants totalled in that year £4,903,000. This means that there was an excess of payments into the fund by civil servants, over the amount drawn from the fund by retired civil servants, of about £500,000.

Now, a question arises which I believe to be mainly a question for civil servants themselves to decide. That is, whether it is necessary to continue to build up this fund in perpetuity. If this were a private fund there is not the slightest doubt that it would be necessary to go on building it up so that it could meet the possibility of a firm’s going out of business while there were still superannuation commitments to be met in respect of officers of the firm who had not yet reached the retiring age. In the case of the Commonwealth Superannuation Fund, however, we have a permanent fund. The civil service will always be with us because that is of the nature of things, and experience has shown that the number of people employed in the civil service tends to increase rather than decrease. Therefore, I think it can be said without any fear of contradiction that there will always be contributors to this fund. I understand that at present there are something like 80,000 contributors to the fund. That being so, surely there will always be income accruing to the fund, and surely all that is necessary to give complete security to Commonwealth civil servants is to see that in every year the liabilities of the fund - the amounts which will have to be paid out in pensions and lump sums - will always be matched by contributions to the fund.

Experience shows that assets and reserves have been building up in this fund at the rate of approximately £4,000.000 a year. The Auditor-General at page 26 of his report shows that the assets of the fund in 1953 amounted to £30.404,000; in 1954, to £34,813,000; in 1955, to £39,471,000; and in the financial year ended 30th June last, to £44,388,000. It is true that a large part of that reserve has been built up by Commonwealth contributions to the fund; but, as I have already shown, at present, even if the Commonwealth made no contribution, the money being paid into the fund by civil servants would exceed the amount being paid out of it to retired civil servants. So, I think civil servants should consider whether the present pension unit should not be increased. It is true that the retirement pension has increased from 10s. a unit to 17s. 6d. a unit over a period of years. But I suggest that over that same period the cost of living has increased at a faster rate, with the result that retired Commonwealth civil servants are worse off today in the matter of superannuation than they were when the unit was worth only 10s. a week. I believe that the time has arrived when the rate of the superannuation unit should be increased from 17s. 6d. to £1 a week. That would bring superannuation more into line with present costs, and more into line with the value of the unit when it was 10s.. as related to living costs at that time. I believe that can be done without any additional government contribution and without in any way risking the security of the fund. I pointed out that last year civil servants paid into the fund £500,000 more than they drew out of it. In addition to that, the Commonwealth contributed £3.276.000 to the fund and interest on investments amounted to £1,728,000. Even if there were a risk - and heaven forbid - that some future government may fail to make its contribution, [ still suggest that the revenue of the fund from contributions made by officers and from interest on investments is ample to pay a retirement pension of £1 a unit instead of 17s. 6d. a unit, as at present.

Mr Costa:

– Why does not the honorable member move an amendment to that effect?

Mr WILSON:

– The adoption of my suggestion would mean that the officer who had four units would receive an increase of 10s. a week, and the officer who had eight units would receive an increase of £1 a week. If the honorable member for Banks had been listening, he would have heard me say that, in my opinion, this is a matter for the civil servants.

Mr Peters:

– They cannot move an amendment in this Parliament.

Mr WILSON:

– It is not our function to do anything that might adversely affect the security of the fund which has been built up by the officers themselves. If the Commonwealth officers, after investigating the matter actuarially and in every other way, decided that there would be no risk to the fund by increasing the value of the unit from 17s. 6d. a week to £1 a week and asked this Parliament to implement that decision, I believe that, in the circumstances, the Parliament should agree to accept that risk. I have previously pointed out that, obviously, a private fund must be kept actuarially sound according to insurance methods to meet the contingency of the firm going out of business. But governments do not go out of business. Governments and civil servants go on in perpetuity - though not the same ones - and just as this fund year by year receives contributions in excess of payments, so in the future, I suggest, it will continue to receive contributions. What I suggest to the House is that civil servants should consider whether the present insurance method with actuarial calculations is the correct and modern method for a scheme such as the Commonwealth officers’ superannuation fund.

When superannuation schemes were first developed, actuaries prepared calculations by which contributors could be assured that at all times and in all circumstances even if the employer went out of business, those who had contributed to the fund would receive the pensions for which they had contributed. That would apply to the Commonwealth officers’ superannuation scheme, if it was a private undertaking, but as governments go on in perpetuity, I believe that the correct method of investigating the soundness or otherwise of the scheme is what is known as the assessment method. I cannot see what good purpose accrues to civil servants by building up a bigger and bigger reserve which will never in any circumstances be used.

A reserve is necessary, of course, but I believe that the time has arrived when the board members of a fund which has a reserve of £44,000,000 should say to members, “ We will now pay a retirement allowance which is equal to, but does not exceed, the annual contributions received by the fund “. In other words, the reserve remains static and a retirement pension higher than the present pension is allowed. That would be a tremendous benefit, not only to civil servants, but also to the Government.

At the present time, the superannuation pension is not high enough for a large number of civil servants. Consequently, in addition to their superannuation, they have to apply for an age pension, subject to the means test. Their income is partly age pension and partly superannuation. If they are provided with adequate superannuation, and I suggest that this fund is able to do that, the National Welfare Fund would be relieved of the necessity to pay a certain amount of money. That money could be paid to cases of real hardship which exist as a result of the operation of the means test and the present rate of pension. From the stand-point of the civil servants and the Government, the time has arrived when we should find out whether we can increase the rate of superannuation without in any way jeopardizing the security and soundness of the fund.

I cannot speak too highly of the superannuation fund as a method of providing security for civil servants. My only regret is that it is not national, and does not apply to the whole community. If it did we could abolish the means test and introduce a national scheme of superannuation in which every one would provide for his old age and not, as at present, pay taxes to provide for some one else in his old age. Surely in this enlightened community we should recognize that we will all get old. We all know that when we get old, our earning power is affected. Therefore, we should all be willing to contribute to a fund, just as civil servants do, to provide security as a right when we reach the age of retirement. What we can do for the civil servants, surely we can do for the whole community. The Commonwealth superannuation scheme is accepted willingly - indeed, it is welcomed - by every Commonwealth civil servant. It has proved an absolute boon to them, because it has given them age security. It has allowed them to save and to have the benefit of their thrift and. their earnings without any means test. As I say, if we can do that for the civil servants, why cannot we do it for the whole community?

I suggest what we should look into Hie Commonwealth superannuation scheme, not only for the purpose of providing increased pensions for public servants but also with a view to using it as a model for a scheme for the whole community, so that we may have in this country real age security, with national retiring allowances, free of means test. This example shows that such a scheme can be made self-supporting. It shows, too, that it can be so arranged that the contributions of the younger sections of the community match the payments to the older sections. It proves that a similar scheme for the community as a whole would aid tremendously the development of Australia.

The £44,000,000 in the Commonwealth Superannuation Fund is now being lent to the Government to build schools, hospitals, roads, railways and electricity undertakings and other public works. If, in a reasonably short period of years, it is possible to accumulate a sum of £44,000,000 by contributions from civil servants, subsidized by Government funds, surely we could solve many of our loan problems by making the scheme a national one and, by contributions from all sections of the community under the retirement age, accumulating a fund, with which to assist our public works programme. Above all, we could provide for people of retiring age security and adequate pensions free of means test.

Mr CALWELL:
Melbourne

.- I shall be commendably brief. The speech which has fallen from the lips of the honorable member for Sturt (Mr. Wilson) must disturb the members of the Adelaide Club, to which, I believe, he belongs. The honorable gentleman spoke as a thoroughly indoctrinated socialist. Everything he said, we agree with. But of course, the world is moving rapidly. The only thing in life about which we may be certain is change.

If such a speech had come, five years ago, from a supporter of the present Government, the honorable gentleman concerned would have been in serious difficulties with his party. The honorable member for Sturt is now advocating a general scheme of superannuation for the Australian people.

Mr Wilson:

– And I have advocated it for six years.

Mr CALWELL:

– Then I give the honorable gentleman the benefit of a year.

Mr Edmonds:

– He wants to relieve the wealthy people of their burden.

Mr CALWELL:

– In some ways, yes. The honorable gentleman is coming round to the kind of scheme introduced by Labour governments in New Zealand and Great Britain. We do not object to schemes of that sort. When they are introduced by Labour governments, we certainly do not object to them. But the honorable gentleman is appealing for the introduction of a scheme without a means test, and 1 remind him that when we went to the country in 1954 and proposed the abolition of the means test, the honorable gentleman’s friends asked, “ Where is the money coming from? How are you going to be able to do it?”

Mr Wilson:

– Labour refused to have a contributory scheme.

Mr CALWELL:

– We did not refuse to have a contributory scheme. We proposed to use the taxation weapon to compel the wealthy people in the community to help finance an equitable system. If honorable gentlemen opposite are now coming our way, we shall have no objection. They are moving towards socialism very rapidly, and strangely enough, there are no better socialists than so-called rabid anti-socialists. I welcome the conversion. It has not yet reached the Tarsus stage, but it is getting close to it.

The observations 1 wish to make on the bill are these: Only 2,500 people will benefit from this piece of legislation. The total benefit to the persons concerned will be only £70,000. No retired person will receive any benefit from it. It applies only to those who have reached 60 years of age and who have remained in the employ of the Commonwealth Public Service. Eventually, the. fund will bear £60,000 of the total cost of £70,000. The numbers of the temporary employees, who are mentioned in the measure as being likely to disqualify themselves for three years from the benefits of the fund if they move from employment in one department of the Commonwealth to another, are not, as far as the Government is concerned, known at all. There may be many; there’ may be few. Government advisers have told me that they do not know how many there are, but the bill is being made retrospective to 1st November, 1954, and I think that that is desirable. Apparently, no temporary public servant has suffered, to date, because of what the Government regarded as bad drafting in the act, which this bill proposes to amend.

We wish the bill a speedy passage. We are very glad that honorable members opposite have descanted upon a system we ought to have in operation for the benefit of society generally. I am all in favour of any scheme that improves the conditions of the most defenceless and the most needy sections of the community. I am all in favour of any scheme that permits human beings, when they are either too young or too old to help themselves, to enjoy a proper standard of living. I am not in favour of introducing schemes to be financed by the great mass of wage-earners, who have enough responsibility to carry, anyhow; but like every other member of the Austraiian Labour party who took part in the revolution between 1941 and 1949-

Mr Roberton:

– What revolution?

Mr CALWELL:

– The revolution by evolution, by which we maintained taxation at a very high rate - an unprecedentedly high rate for peace-time conditions - so that we could take from those who had too much to give to those who had too little.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 1713

LOANS SECURITIES BILL 1956

Second Reading

Debate resumed from 17th October (vide page 1533), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr CALWELL:
Melbourne

.- The Australian Labour party does not believe in borrowing abroad, lt is a plank of our platform that we should not put this country into pawn in overseas markets. We have had too long and sad an experience of how overseas investors get all they can out of the country and then, if a crisis comes, take their money out and leave many people destitute and in misery in Australia. That happened in the last depression; it happened after the bank crashes of the 1890’s, particularly in Victoria and, to some extent, in New South Wales. First, the Government proposes that we should be able to borrow in any currency that the Governor-General likes to determine. The bill proposes two alterations in the existing borrowing legislation. The second provision is that the Government and the Australian Loan Council shall be able to borrow on conditions to be determined by the Governor-General or the Treasurer. This, it is argued by the Government, will make it unnecessary for the negotiating limits to be set out in the order in council.

I shall not be very long in discussing the bill. We do not like it. I do not know why the Government wants the power it thinks it ought to have, when it has been borrowing French francs, American dollars and Canadian dollars under its existing power; and I have not the slightest doubt that if Marshal Bulganin and Mr. Khrushchev were friendly enough this Government would be trying to borrow even Russian roubles. It might even ask the Communist Chinese to lend some of their currency. The Government argues that this is only a machinery bill which will help the Ministry to borrow abroad, when it cannot get the Australian people to lend the necessary money to fill the loan programme to permit the State governments to carry out the necessary works for which they are responsible, such as building homes, hospitals, schools, roads, and so on. This Government can attract no more than £100.000,000 to its loans each year, despite the fact that our national income to-day is about £5,000,000,000, and despite the additional fact that the Australian people have £1,200,000,000 in their savings bank accounts. A government that cannot entice or persuade the people to put their money into sound government securities for the development and advance ment of Australia has apparently lost the confidence of the Australian people. With these few words, we register our opposition to this measure, designed as it is to enable the Government to borrow more easily abroad.

Mr CREAN:
Melbourne Ports

.- I should like to support the remarks of the honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition. Like another measure that we considered this afternoon, this is one of those peculiar matters which seem to come up in this Parliament for no reason at all. The bill proposes the amendment of the Loans Securities Act. which was passed in 1919 and was assented to, I think, on 28th October. 1919, and has never been called into question in its 37 years of history since that date. This proposal highlights one or two of the developments that have taken place, not only in this country, but also in the rest of the world in the last ten years or so. Apparently, in the spacious days of the gold standard, when Australian currency was really convertible into sterling or any other international currency, this kind of measure was not necessary at all. lt highlights also, as my colleague has rightly suggested, the manner in which the Government goes hawking this country’s reputation round the world for what it calls capital to develop this country. Often what it calls capital to develop this country is merely anything, obtained anywhere and on any terms, that can be used in any way to smooth, for the time being, the economic difficulties into which this country gets with its overall balance of payments. In fact, 1 think it can be said of the Government that it does not worry from where it obtains money, so long as it seems to alleviate for the time being Australia’s balance of payments difficulties. Of course, the effect is only to put off the evil day and store up problems for the future, when another government - we hope sooner than some persons think - enters upon the occupancy of the treasury bench.

The speech in support of the motion for the second reading of the bill was made by the Minister for Labour and National Service (Mr. Harold Holt), lt was the sort of speech which should have been made by the Treasurer (Sir Arthur Fadden) who, 1 take it, happened to be away during the week in which it was delivered. Basically, it was a Treasury speech and ought not to have been made by the Minister for Labour and National Service. He said that the measure had been introduced for two reasons. The first of these was that it would enable a more flexible procedure for the raising of overseas funds. Apparently, the powers of the Government were severely circumscribed by section 3 of the 1919 act, in what I have referred to as the spacious days, and, basically, the bill proposes that the powers prescribed by that section shall be put in the hands of the Treasurer, as distinct from the Governor-General. Secondly, the measure proposes that the Government be given power to borrow in any currency. As my colleague has said, we have not yet got round to borrowing roubles, but the time may come. We have certainly borrowed Swiss francs and Canadian dollars. As was indicated during the debate on the measure which authorized the borrowing of Canadian dollars, twelve or eighteen months ago, that borrowing was made on very adverse interest and underwriting terms.

This measure proposes that the setting out of very definite terms and conditions of loans be taken from the hands of the GovernorGeneral and put into the hands of the Treasurer for the time being. It is suggested that the present process is slow. If experience be any guide, it would have been better for this country if the former procedure had been a little slower, because for every 100 Canadian dollars which Australia purported to borrow, it received only 951/2 dollars; in addition, the loan was issued, I think at a premium of 1 per cent., and the apparent rate of interest was much in excess of the ruling rate at the time on the Canadian bond market. It is power to negotiate loans of that kind which apparently the Treasurer wants to take unto himself. The need for the power to borrow in any currency was not quite so apparent in the past as it is now. because under the gold standard currencies were convertible. One could change roubles. French or Swiss francs, or dollars, into sterling without hindrance. A problem of this kind never arose. If Australia desired to borrow dollars in New York or francs in Switzerland or France, the deal was arranged through the London money market.

Mr Roberton:

-It was a very desirable state of affairs.

Mr CREAN:

– It may have been a desirable state of affairs in those days. At least to-day we have to tread with a little more caution. Australia has had its fingers burned in one or two transactions entered into by this Government. This is a kind of measure that comes casually before this House without any great attempt being made to explain its fundamental implications. I think that the Minister for Labour and National Service took about four minutes to deliver his speech. He did not attempt in any way to define the fundamental problems that face this country in relation to the balance of payments. At the risk of tedious repetition, let me say that the Australian economy is what the economists call a dependent economy. The volume of our imports depends upon the return from our exports of certain basic primary commodities. I know that my friend the honorable member for Mallee (Mr. Turnbull) is well aware that, as we did last year, we can sell a greater quantity of wool but receive in return for it a smaller quantity of overseas currency. What the economists in their jargon refer to as the terms of trade have moved against us during the last two years. That is a problem which this Government has done very little to try to solve.

If wages in the country rise, the producers of commodities that are sold on the local market push their prices up correspondingly. Automatic wage adjustments are the only protection which, ultimately, the wage-earner has against that process. That is the position internally, but the position externally is somewhat different. If we are told that, due to increased costs overseas, the price of petrol will be raised by about1d. a gallon, we accept the increase as quite a natural thing, but in the case of a great commodity like wool, of which we are the principal world producer, we are told that we must accept the world price, despite the fact that the annual production seems roughly to match the annual demand. That seems to me to be somewhat higgledy-piggledy. It shows the lack of acumen on the part of the Australian wool-sellers and the shrewdness of the people who sell oil to us.

Mr Roberton:

– Rubbish!

Mr CREAN:

– It is not rubbish. If the Government is told that, due to a crisis in the Middle East, freight charges on petrol have gone up and, therefore, that we must pay Id. more a gallon for petrol in Australia, it accepts that increase without argument; but when somebody forces down the price of wool on wool-buying markets overseas, the Government accepts that action lying down. Those are the kind of matters that should be the concern of that two-headed monster, the Department of Trade and the Department of Primary Industry. Instead of indulging in extravagant and sometimes very unrealistic attempts to sell Australian products overseas by arranging for Australian girls to parade through Piccadilly with apples on their heads or something of that kind, the Government should get down to more serious matters. Ever since it came into power it has been inclined to adopt short-term expedients. If it can secure dollars from America or Canada or francs from Switzerland, it does so, no matter what the terms are. It gets anything that it can on any terms, without worrying whether it is chocolate that will be consumed to-morrow or tractors that will be of some use to the country in the long run.

The bill is being pushed through the House on the pretext that it is a simple amending measure designed to bring things up to date. Act No. 25 of 1919, which was assented to on 28th October, 1919, 37 years ago, has stood the test of time. Why, on 23rd October, 1956, are we called upon, for the very shallow reasons given by the Minister, to agree to this amending measure? The first reason given by the Minister is that he wants a more flexible procedure, so that in future power now lying with the Governor-General - who, apparently, wants to read carefully what is presented to him and does not want to vary it afterwards - will, to some extent, pass to the Treasurer, acting with the authority of the Australian Loan Council. The second reason given is that this country, for the first time in its history, must be given power to borrow in any currency.

The Opposition asks: Why is there a need to borrow in any currency to-day? Despite the fact that, I think, less than one-tenth of our trade is done with the dollar area, something like one-half of our adverse trade balance is due to our transactions with the dollar area. The argument of the Government is that we borrow dollars to-day in order to make ourselves less dependent upon the dollar area in the future, but the facts are that the more we borrow from dollar sources the more do we become rivetted, so to speak, to the dollar area. As my friend, the honorable member for Parkes (Mr. Haylen) says, that is axiomatic. But a self-evident truth is not always evident to this Government. That truth is evident to us, but it has not yet dawned on the Government

The Opposition opposes this measure, simple though the Minister has tried to make it appear. We oppose it because it has behind it a great deal of guile. It is an indication of the very sorry state to which the nation has come under this Government, particularly in its transactions with other parts of the world.

Mr JOSKE:
Balaclava

.- The debate on this bill has indicated the wide divergence between the views of the Government and the views of the Opposition on overseas borrowing. The Opposition has stated frequently during the last few years that it is resolutely opposed to borrowing from overseas. It has announced that as its policy time and again. The Government, on the other hand, has said that it believes that this great country of ours should be properly developed and that in order to achieve the greatest development possible we should obtain as much money as we can from overseas. That policy has been upheld on more than one occasion by the electors. They believe that we are doing the right thing in borrowing from overseas in the interests of the better development of the country. The Government intends to continue with a policy of obtaining as much money as it can from overseas. There is no guile about that. We have said time and again, and we shall continue to say that we shall do our best to develop the country.

A matter which concerns me is the provision in the act of 1919, which is to be preserved, enabling the Governor-General to borrow moneys in such amounts, in such manner, at such prices and on such conditions, as he determines. That is a very wide power which the Parliament has given to the Executive. One wonders from time to time why it is that the Parliament gives such enormously wide powers to the Executive. That power was given in 1919, and it has not been attacked at any time since then. During the years between 1941 and 1949, when Labour was in office, that power was allowed to remain with the Executive. There appears to be no special reason to-day why it should be removed.

The proposal that the powers given to the Governor-General shall be exercised by the Treasurer will terminate a fiction. The position always has been that the powers of the Governor-General are exercised by the Executive Council. An Executive Council meeting, as is well known, is a mere formality. In order that what actually occurs at an Executive Council meeting may be properly realized I propose to refer to a passage written as far back as 1944 by Sir Percy Spender, who had been, in earlier years, a Minister of the Crown. He describes what usually takes place at an Executive Council meeting as follows: - . three Ministers meet to exercise the power of the Governor-in-Council. They put through at a meeting a whole host of executive acts, the contents of which very frequently they do not know. The Minister who is responsible for the promulgation . . . usually is not present at the meeting of the Executive Council . . . Indeed, I am satisfied that most regulations are issued without most Ministers knowing what they really deal with, and certainly without any but one or two knowing what their real legal effect is.

Commenting on that matter the present honorable member for Warringah (Mr. Bland), in his former capacity as Professor of Public Administration in the University of Sydney, referred to the revealing candour of the personal experiences of Mr. Spender, as he then was, and added -

In his address, Mr. Spender tore aside the curtain to allow us to watch that imposingly majestic, but dangerously misunderstood functionary, the Governor-General-in-Council, going through the ritual of the democratic process. He confided to us that safeguards, popularly supposed to be secured by requiring departmental action to run the gauntlet of the Executive Council, were an entirely empty ceremony, regularly performed by a few available Ministers, who probably had not the faintest knowledge of the contents, or the implications, of the documents they were signing.

I think that is quite a fair description of the procedure in the Executive Council. Consequently, when it is said, as has been said by the Minister for Labour and National Service (Mr. Harold Holt) that the purpose of this bill is to bring about a more flexible procedure - in other words to do away with formality and allow the

Treasurer to get down to business straightaway - I cannot see any objection to the passage of the bill. After all, if a government exceeds its powers and abuses its authority under the powers conferred by the principal act, it is for the electors to deal with the matter at the right time and place, and no doubt they would do so. The fact that the principal act has stood in its present form since 1919 indicates that the powers conferred by it have not been abused. In those circumstances I do not think that any good purpose is served by challenging it now. As I have said, the bill, which is designed to allow the Treasurer to deal with these matters, seems to me to be entirely unobjectionable.

Dr EVATT:
Leader of the Opposition · Barton

– I do not wish to speak at length on this measure, but I should like to take the opportunity to refer to proposed new section 6a of the principal act, which reads -

Where under an Act the Treasurer has authority to borrow moneys, the Governor-General may authorize the Treasurer to borrow the moneys in whole or in part in currency other than Australian currency, and, in that case, the Treasurer is empowered to borrow the moneys accordingly.

Since the Governor-General in form is the Treasurer in fact - he acts on the advice of the Treasurer - this means that if the Treasurer has authority to borrow moneys he can borrow them anywhere in any foreign currency. I do not think that is merely a matter of procedure. It is rather a matter in which great power is involved. I think the Parliament should have some authority over loans from other countries. It has been pointed out in favour of the Government’s proposal that borrowings may be made in a foreign currency under the Financial Agreement. That is correct, but if the Commonwealth is borrowing for itself or the States it always does so under the authority of a statute of this Parliament. Is there anything wrong in that? I think the honorable member for Balaclava (Mr. Joske) really sees the value of it. A borrowing in foreign currency means some reference, implied or direct, to a loan from another country and the status of the currency of that country in relation to our own.

The Minister for Labour and National Service (Mr. Harold Holt) pointed out in his second-reading speech that, in some instances, specific legislative authority is sought for borrowing in a foreign currency. The Canadian loan of 1955 was authorized by a special act of this Parliament. During the consideration of that measure in a very lively and important debate the terms of the loan were discussed, and it was shown by my colleague, the honorable member for Melbourne Ports (Mr. Crean) and other honorable members that a very high rate of interest was being charged. If this measure is passed, the expression of opinion and criticism will be practically impossible in future, except perhaps after the event. It was pointed out by the Minister, also, that borrowing in a foreign currency has taken place in instances in which no specific legislative authority has been sought. But this is the gist of the argument, and 1 should like to drive the point home: The Minister said in his second-reading speech substantially that Australian governments have borrowed overseas for many years and there has never been any doubt that if the Parliament authorizes the borrowing of a sum of money that amount may be borrowed either in Australia or in foreign currency. That is perfectly true. There is power to borrow on the security of the Commonwealth from overseas in any currency if the Parliament authorizes it. The present Government has borrowed overseas for a number of years.

Mr Duthie:

– It was not done by the Labour government.

Dr EVATT:

– Under Labour’s administration for nearly nine years there was no borrowing from overseas. So I think it is wrong for the House to assume that these matters will be merely routine in the future. One can understand borrowing in established currencies such as the American or the Canadian dollar, but under the powers conferred by this bill the Government will be able to borrow anywhere under any conditions and under any provisions for the payment of interest and redemption. No one can say what may be the relationship between Australian currency and that of the country from which the borrowing is made. The relationship may be all right at the time of borrowing, but it may become very unsatisfactory to Australia later. I suggest that this matter be reviewed so that the National Parliament may have some say in these loan transactions and in the question of whether borrowing in the particular currency should be authorized. Of course, the Opposition goes further. It is opposed to overseas borrowing except in rare instances in which the purpose of a loan is to enable Australia to purchase equipment essential to its development.

Mr Crean:

– Equipment which cannot be obtained in any other way.

Dr EVATT:

– In instances in which it is impossible to obtain the equipment otherwise. We look behind the loan to the transaction implicit in it. We have heard Government supporters claiming to speak for the liberal tradition declare that the Parliament must not delegate great powers entirely to the executive. That is what is to be done in this instance. This, bill will empower the Government to borrow money in the currency of any country in Europe. Asia, or elsewhere, and to commit Australia to a loan without the Parliament having any say in it.

I hope this proposal will be reviewed and that the Minister, in reply, will inform the House of the currencies in which it is expected to borrow. I could understand a proposal such as this being made in relation to currencies in which borrowings have previously been made, including the Swiss franc, a currency in which Australian recently obtained a comparatively small loan. Should the Parliament not be able to impose some limitation on these borrowings? These are not merely matters of routine and form. They are important, and the House should consider them very carefully.

Mr PETERS:
Scullin

.- I agree entirely with the statement by the Leader of the Opposition (Dr. Evatt) that loans from overseas, particularly at the present time, should be obtained only in order to enable this country to purchase equipment essential to development. Government supporters talk about securing loans in the currency of different countries, but what do we secure when we raise these loans? We secure, not the currencies of the various countries, but their goods. It is the goods that come into the country. If the loan is made in Switzerland, then we receive it in the form of Tobler’s chocolates, or in the form of Swiss watches and jewellery. If we raise a loan in Japan, we receive manufactured goods from that country. If we raise loans in other countries, we receive the goods of those countries. We do not receive American dollars, or Canadian dollars, or Italian lire or Swiss francs.

This Government is continually imposing most savage import restrictions for the purpose of keeping the goods of other countries out of Australia, in order to preserve our overseas balances, but with this measure it will enable other countries to send their goods to Australia. The position, of course, is utterly absurd. I remember when the Treasurer (Sir Arthur Fadden) embarked upon his historic overseas tour, during which he climbed the Swiss Alps in order to secure a loan for the purpose, as he alleged, of aiding the development of Australia. After that loan of 60,000,000 Swiss francs was obtained by the Treasurer, there was not a confectionery shop from one end of the country to the other that did not have Tobler’s chocolates and other Swiss confectionery upon its shelves. Swiss watches, pendants and other jewellery were brought here as a result of that endeavour of the Treasurer to help the development of Australia! Such loans do not help the development of Australia in any way, and if, by the passage of this legislation, we make it easier for governments to secure money overseas, and, without the consent of this Parliament or the knowledge of the nation, to secure loans in the currencies of Asian and other countries, then we will do it to the disadvantage of Australian industry and to the disadvantage of our oversesas trade balances, which are so necessary for the purchase of such goods as rubber, oil, machinery and other goods that we need for the development of our economy.

It is all very well for the honorable member for Balaclava (Mr. Joske) to talk about the legal aspect of the question, and what is meant by regulation by the Governor in Council, and how Sir Percy Spender pointed out in a historic address that the country would not be detrimentally affected. In reality, the issue is whether we. as a nation, should make it easier to create credits overseas that result in the importation into Australia of the goods of other countries, to the detriment of Australian manufacturers of those goods, and to the detriment of our oversreas balances, which are already sorely pressed because of the policies of this Government.

We do not want to give the Australian people the impression that overseas loans can come to this country in any form other than that of the goods of those countries. There was a time, of course, when a loan raised overseas would come to Australia in the form of gold, but that time has long since passed. Loans now come to Australia in the form of manufactured goods or raw materials. If we require raw materials, then I agree that we should endeavour to borrow overseas, on certain conditions, so that we may procure those raw materials or certain equipment that is necessary for the development of Australia. By giving power to this Government to go to any other nation and secure a loan, we do not thereby assist in obtaining the materials or goods that are necessary for Australia’s development. The result is merely to secure goods that are already being manufactured in this country, and so worsen the position of Australian manufacturers and employees, and destroy our overseas trade balances.

Mr MACKINNON:
Corangamite

– The bill before the House, which is designed to facilitate government borrowing, particularly in other countries, seems to have stirred up Opposition members, who have declared themselves as being opposed altogether to overseas borrowing. Irrespective of the actual contents of the bill, I think that the arguments submitted so far by honorable members opposite have been to the general effect that Australia should never borrow from overseas countries. Everybody will agree, irrespective of his ‘political creed, that in these times of vast Australian development we cannot, with our limited resources, provide sufficient capital ourselves. We must, therefore, look outside for capital. In the past we have relied largely on support from the Mother Country, and I believe that most of us would wish that we could continue to rely on her, because of the natural ties of family and affection. Unfortunately, due to Great Britain’s economic situation after waging two- world wars, that country is no longer in a position to supply to Australia and other units of the British Commonwealth of Nations the necessary finance to carry on their development. Australia must, perforce, look elsewhere for the capital resources that are needed.

One of the most extraordinary remarks made by the honorable member for Scullin (Mr. Peters) was that he has been unable to see any results from the loans that this Government has already raised in dollars and Swiss francs. It is quite obvious, despite the fact that he professes to know a good deal about primary industry - in fact, I sometimes think that he is the Labour mouthpiece on primary industry - that he has not travelled around Australia and seen the great volume of agricultural machinery, which is not manufactured in Australia and is unprocurable in this country or from sterling sources, which is being made available to Australia because of these dollar loans. Not only has agricultural machinery, in which I take a personal interest, been made available, but so also has the great amount of heavy earth-moving machinery that is doing a magnificent job in our hydroelectric and other developmental schemes, such as that being undertaken by the Snowy Mountains Authority. It seems most extraordinary that honorable members opposite should adopt this attitude in regard to what is really the life-blood of Australia’s developmental programmes, and that they should take the parochial view that we should limit our financial requirements to the availability of capital in Australia.

I turn now to the question of why the Labour party is traditionally inclined to reject foreign borrowing. The first time that a Labour government had the opportunity of borrowing overseas was in the 30’s. During that period, if my memory serves me well, the Premier of New South Wales, who, I think, was a Mr. Lang, so blotted Australia’s copy-book with regard to overseas credits that it was quite impossible for a Labour government or any government at that time to present a credit-worthy scheme so that overseas lenders would be prepared to meet Australian requirements. When the present Opposition was in government, during World War II., virtually no international financial transactions took place. Because the requirements of Australia, which were admittedly vast, were limited to the war effort, and because certain legislation was in force, it was unnecessary to try to borow capital overseas, despite the fact, as many will know, that commitments were made in the financing of our war effort overseas, especially in such parts of the world as the Middle East and Southeast Asia. Because of the strangulation of opportunities for investment outside the normal government requirements, it was virtually impossible for a private individual to adopt any other form of investment, so money was readily available for government loans. I have only to refer to a few of the acts and regulations that were in operation in those years to show how easy it was for the government, under those conditions, to make certain that the loans required for the carrying on of its capital works programme were filled. Prices were pegged on the stock exchange. It was impossible to do much in the way of normal transactions in stocks and shares. We had capital issues control. In other words, there were no avenues for vast sums of investment in private or public companies without Treasury approval. Land values were pegged so that people could not buy land as an investment. If the price exceeded a certain level, the sale would not be allowed by the delegate to the Treasurer. Again, mortgages on land had to be approved by the Treasury before loans could be made available. The whole of investment was so tied up that it was unnecessary for the Labour Government to borrow overseas. It did not require to borrow money from that source.

I think that members of the Opposition have also had, traditionally, a fear of bigmoneyed interests. This is a sort of ghost that lurks behind their bed at night - big-money interests which dominate the economy of Australia. When one examines the general development of international relations, it is quite obvious that that type of argument is completely useless in the development of a modern State. The modern State is dominated by its own political wishes. It can dominate its own economy at any time it desires. Only recently, we have seen specific examples of that type of thing.

When we get down to the criticisms that have been made in regard to this bill, we realize that they have not been based merely on the content of the bill itself which, as I mentioned previously, is designed to streamline the facilities available for bor.howing with the Government’s approval and within the Constitution. They have been based on the complete rejection of the principle of borrowing from overseas countries. I suggest to this House that unless we can provide from our own resources the capital required for development, or procure the capital from the normal sources that we enjoyed before the war, such as those in the United Kingdom, we must take every opportunity that we can to carry on development here by exploring every benefit that is available.

The honorable member for Scullin (Mr. Peters) talked about the emu putting his head in the sand when he meant to refer to the ostrich. I think that that is the background of the whole outlook on this subject. If we believe that this country has a future, if we have confidence in the future of the people who make up the population of Australia, if we believe that we can express our thoroughness and ability to carry on the development of this country to the other people of the world who are in the position of lenders, and if we can tell them that we in Australia are going to be a bastion or right thinking in the world* I am satisfied that we need have no fear in borrowing overseas. We shall carry out our obligations. We shall keep Australian credit high and we shall act for the advancement of this country.

Mr WARD:
East Sydney

.- The powers contained in this legislation, in the hands of a government such as the one that is at present in office, are most dangerous. It may be argued by members of the Government that these powers have been in possession of governments for many years past but, as with many other powers, it is the use and the purpose to which the powers are put that determine whether they are for evil or good.

The honorable member for Balaclava (Mr. Joske) said that the policy df the Government wds to borrow up to the limit. Other speakers have tried to imply that the development of our economy is involved in the success or otherwise of this loan. But the honorable member for Balaclava did not say that this loan needed to have any relationship whatsoever to any particular developmental project. He said that we had to borrow as much as we could get overseas, without limit. I think that is a very dangerous policy for this country to pursue. As a matter of fact, it comes rather strangely from a government that has been talking about our balance of payments difficulties.

Is it not realized that every time the Government raises a loan overseas and thereby increases the overseas indebtedness of tins country, it increases our liability for the payment of interest which has to be met every year by exporting the produce of this country? Every new loan makes an additional charge upon our export income. The more the Government borrows overseas, unless there is a relative increase in the production of export industries, the greater difficulties does it create in regard to the balance of payments of this country. That is the view held by Dr. Coombs, the Governor of the Commonwealth Bank, who pointed out not so very long ago that if one carried this idea of overseas borrowing too far, it could become very embarrassing in future for the Government of the Commonwealth. But evidently this Government does not worry about that, because it has set out on the old policy of “ borrow and bust “.

Anybody would imagine, to hear the honorable member for Corangamite (Mr. Mackinnon) speak, that all that we had imported into this country as a result of overseas loans was farming machinery, which could not be manufactured in Australia, or heavy earth-moving equipment which we needed for great developmental projects. It may be true that some of that equipment has been bought out of the proceeds of overseas borrowing, but it is not possible to ascertain from the Treasury how these overseas funds are expended - on what items these overseas borrowings are used. The Treasury has stated that it is impossible to dissect into various categories the imports into Australia and so determine which particular goods and equipment were brought in as the result of overseas borrowings.

It has been shown that iri some periods in which we have been borrowing overseas, the imports of newsprint into this country have vastly increased. Has anybody argued that increased imports of newsprint will assist the development of this country? Of course not! Therefore, I say that the policy pursued by Labour in this matter is a more realistic one than that pursued by the Government and it is more to the advantage of the Australian nation and the Australian community.

When Labour was in office, despite the fact that great demands were made upon the resources of this country, it was able to reduce our overseas indebtedness by approximately £100,000,000. We reduced the interest bill by approximately £18.000.000 a year, a sizeable contribution to meeting the difficulties that then faced the Australian community. How can it be argued by any honorable member that greater indebtedness will ensure future prosperity for Australia? The Government is following a false and contradictory policy. While restricting credit in Australia, tying up resources, and slowing down the building of homes, roads and bridges, it speaks of the necessity to borrow overseas in order to speed up developmental work in this country. Its whole policy is really to slow down developmental work.

The Government’s arguments are fantastic. What does it propose to do? The Australian people might have some measure of protection if the Government were pledged to bring a draft loan agreement before this Parliament for ratification. We could then learn the purpose for which the loan was to be used, but that is not proposed. In this very simple looking bill, which is being handled by probably the simplest Minister in the Government in order to create the impression that it is harmless, we find that the Government seeks from the Parliament an open cheque. It wishes to borrow overseas without limitation, and without consulting this Parliament further. It wants to borrow at interest rates, and under conditions, which will be determined not by the Parliament but by the Federal Treasurer. That is a most dangerous procedure, and one that the Parliament ought to disapprove of very strongly.

I want now to make one or two remarks about development which has been mentioned by Government supporters. What the honorable member for Scullin (Mr. Peters) said was perfectly true. When the Government borrows overseas it does not physically transfer currency from another country to Australia. The loan takes the form of imports. The remarks of the honorable member for Corangamite (Mr. Mackinnon) might have some bearing on the situation if these imports were restricted to essential equipment for developmental purposes, but they are not. The Government could bring into this country, in quantity as it has already done, cheap toys produced in Japan, and further affect an industry that has been built up by ex-servicemen. The Government could flood the country with all types of goods, including textiles, which can be manufactured in Australian factories by Austraiian workmen. If more loans are raised overseas unemployment in this country will be accentuated. If the loans were used to remove import restrictions as they exist to-day, further non-essential goods could be brought into this country and more men would be thrown out of work. This is a very dangerous piece of legislation and for that reason I support the Opposition in urging its rejection.

Question put -

That the bill be now read a second time.

The House divided. (Mr. Acting Deputy Speaker - Mr. G. J. Bowden.)

AYES: 51

NOES: 39

Majority 12

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Conditions of loans).

Mr CREAN:
Melbourne Ports

.- The principle of this bill is embodied in clauses 3 and 4, as was rightly pointed out by the honorable member for Balaclava (Mr. Joske). I notice that the Minister for Labour and National Service (Mr. Harold Holt), who introduced the measure is in the chamber, so he may be able to throw a little light on these provisions.

The CHAIRMAN:

– Order! There is too much noise in the chamber.

Mr CREAN:

– Clause 3 seeks to replace section 3 of the principal act, which has stood for 37 years. Basically, the clause replaces section 3 of the 1919 legislation inasmuch as it seeks to allow the Commonwealth Treasurer, in most important circumstances, to borrow on his own initiative without the consent of the GovernorGeneral. As the Opposition sees it, this clause may be regarded as seeking to give the Treasurer a dispensing power which abridges the power of Parliament in the control of finance and particularly so far as it affects the overseas borrowings of this community. Therefore, the clause is an important amendment of the principal act - so important that the Leader of the House, the Minister for Labour and National Service, who introduced the measure, should give us more explanation of it than he has already given us.

Conversation being audible,

Mr CREAN:

– I suggest, Mr. Chairman, that a little more courtesy be shown from the front benches on the Government side. I am asking the Minister for Labour and National Service, who introduced this bill, for a more full and more satisfactory explanation of the reasons of the two operative clauses of the bill. At the moment I am dealing with clause 3. It is true that the bill is a Treasury matter but, the Treasurer (Sir Arthur Fadden) not then being here, it was introduced by the Minister for Labour and National Service, and I am directing my remarks to him. 1 repeat them, because 1 do not think that he heard them. Basically, clause 3 seeks to replace, in substance, section 3 of the principal act of 1919, except for the important subclause (2.) which reads -

An authority under the last preceding sub-section may, instead of determining any mailer referred to in paragraph (b) or (c) of that sub-section, authorize the Treasurer to determine that matter, and, in that case, the Treasurer is empowered to determine that matter.

The authority therein mentioned derives either from the Commonwealth Inscribed Stock Act 1911-1946, a very vague and general act, or from other vague and general acts which authorize the issue of treasurybills. The clause seeks to authorize the Treasurer -

  1. to borrow the moneys in such amounts as the Governor-General determines.
  2. to borrow the moneys in such manner, at such prices, and on such terms and conditions, as the Governor-General determines; and
  3. to issue such securities, and in such form, as the Governor-General determines.

But sub-clause (2.) seeks to authorize the Treasurer to do those things on his own authority, without the approval of the Governor-General. I suggest that the committee is entitled to a fuller explanation of this provision than it has so far been given.

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– How much more detail does the honorable gentleman want by way of explanation?

Mr CREAN:

– Much more detail than has been given, certainly much more than the flimsy two or three minutes of explanation given last week. Here we have the whole experience of 37 years abrogated in this measure, and no adequate explanation given for the proposal. I suggest that in effect this clause seeks to dispense, to a certain extent, the power that the Parliament has over an important aspect of finance, namely overseas borrowing. I propose in a moment to amplify that statement in the discussion on clause 4. I suggest that a more satisfactory explanation of the provision should either be given here and now, or that such an explanation be given when the measure is before another place.

Mr HAROLD HOLT:
Minister for Labour and National Service and Minister for Immigration · HIGGINS, VICTORIA · LP

– I thought the story had been set out clearly enough in the second-reading speech I gave on this matter. What, of course, is involved in this measure is the desire to make more flexible the bargaining capacity of the Commonwealth Treasurer, or his representative, in loan negotiations. I thought 1 had pointed out sufficiently that past practice has been for negotiating limits to be prescribed. These negotiating limits are contained in an official document which, normally, has to be produced to the party to the loan. Once the loan has been negotiated it seems a very absurd position-

Mr Crean:

– Then you present this Parliament with a fait accompli.

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– It is clearly an undesirable position that, having been authorized to negotiate up to certain limits, and perhaps having negotiated a loan below the limits you are authorized to negotiate, you have to demonstrate your authority to the lender, and that authority reveals to the lender that you could have gone somewhat higher than you actually have gone.

Mr Ward:

– It is not of much use his knowing it then.

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– Ah, but there may be subsequent transactions, and these things are perhaps not forgotten in the future. As was pointed out earlier, it still is necessary to have the authority of the Australian Loan Council in respect of the terms and conditions of these transactions.

Mr Crean:

– You are not worried about the Australian Loan Council. What you are worried about are the loans that the Commonwealth negotiates for its own uses.

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– They still have to be approved by the Australian Loan Council as to terms and conditions, even if these are not revealed in the authority. That is my understanding of it.

Mr CREAN:
Melbourne Ports

.- The Minister said in his second-reading speech -

There is no doubt that borrowings in a foreign currency may be made pursuant to the Financial Agreement and that the Loan Council may authorize loans to be raised in foreign currency. However, where the Commonwealth has borrowed moneys for its own ase, or for the use of itself and the States, the borrowing has invariably had the authority of statute, in addition to that of the Financial Agreement.

It seems to us that what the Government is attempting to do in this bill is to by-pass the need for future statutory .authority.

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– That is not my understanding of the intention of the measure.

Clause agreed to.

Clause 4 (Currency in which moneys may be borrowed).

Mr CREAN:
Melbourne Ports

.- This clause is similar to clause 3 in intention, and again I quote the words of the Minister for Labour and National Service (Mr. Harold Holt) in his second-reading speech, with respect to this provision. These were virtually the last words in the Minister’s speech. They were -

Accordingly, it is proposed to insert in the Loan Securities Act a provision to the effect that, whenever a borrowing is authorized by Parliament, the borrowing may be made in any currency authorized by the Governor-General.

It seems here again that the Parliament is being asked to give the Government authority in general terms, which it already has in general terms under the Commonwealth Inscribed Stock Act 1911- 1946. Under that act the Government has authority in general terms to make borrowings. The Minister has said that there were some doubts as to whether that act entitled the Government to borrow in overseas currencies. The Minister cited a New Zealand case in which some doubt had been thrown on this type of provision when it had been suggested that the relevant New Zealand law, which was in terms similar to the Australian legislation, might not authorize borrowing in other than New Zealand currency. By the addition to the principal act of the provision in clause 4 the Government now seeks to give itself the power to indulge in foreign borrowings, arising out of only a general borrowing power under the Commonwealth Inscribed Stock Act, or an act relating to the issue of treasury-bills. It seems to us that it is a much more fundamental thing to borrow in your own currency than to borrow in a foreign currency, and if at any time you should desire to borrow in a foreign currency, as the Government has done in the case of loans from Switzerland. Canada and the International Bank for Reconstruction and Development, every one of these transactions ought to be accompanied by appropriate legislation passed by this Parliament, which at least allows the Parliament as such-

Mr HAROLD HOLT:
HIGGINS, VICTORIA · LP

– Before the borrowing? The honorable member must think that it is a pretty static market.

Mr CREAN:

– That has been one of the difficulties. The Government has presented us with a fait accompli on other occasions. The Canadian loan was a splendid example of that, because in that case the country was sold down the drain when the Government borrowed on adverse terms, and this Parliament was not given an opportunity to do other than ratify a bad bargain. We on this side of the chamber have very definite views about overseas borrowing. We say that as far as possible this country ought to do without overseas borrowing, and that when overseas borrowing is inescapable at least the Parliament should be given the opportunity to debate the proposal. The reason for such a transaction ought to be given to us. In this bill the Government is virtually asking for a blank cheque which it may fill in to suit itself once the Parliament has gone into recess. The Treasurer may act in any way he pleases under this measure, because the proposed new section 6a, which will be inserted in the principal act by the passage of clause 4, will authorize the Treasurer to borrow the moneys, “ in whole or in part in currency other than Australian currency “. The provision does not specify whether the borrowing shall be in francs, dollars, roubles, piastres, lire, or any other currency. At least, it must be conceded that so far the only departures have been loans from the International Bank, of which, I admit, Australia is a subscribing member. We have had two loans, I think, from Switzerland, and oneloan from Canada. In every instance, it is true, the Government has had to bring legislation before the Parliament subsequently. I do not know whether, if this bill is passed, the Government will even have to bring in subsequent legislation to authorize overseas loans. I agree that it has been brought along as a fait accompli, but the Minister should have been a little more frank in the presentation of thecase.

Mr HAROLD HOLT:
Minister for Labour and National Service and Minister for Immigration · HIGGINS, VICTORIA · LP

– I think the position was indicated clearly enough in my second-reading speech. I pointed out that this clause was designed to clear up a doubt which had developed. We did not believe that there was any doubt, and have acted as if there was no doubt. But some doubt has been cast on the position by the New Zealand act and it was felt desirable, as another provision was to be considered by the House, that the whole issue should be put beyond all reasonable doubt.

I cannot help feeling that the attitude of honorable gentlemen opposite in relation to overseas borrowings is very unrealistic. They seem to feel that Australia is doing somebody a service by accepting loans which others are apparently eager to thrust upon us. That has not been Australia’s experience. Overseas borrowings are not easy to procure. The notion that we should keep the lender at bay until we have obtained the approval of the Parliament, which may not be meeting for the three or four months during which the loan is being negotiated, is, of course, entirely unrealistic. I suggest that the general question of the desirability or otherwise of overseas borrowings should not be discussed at this stage. If honorable gentlemen opposite had any conception of the difficulty of raising money overseas on terms which are reasonable to Australia they would be less disposed to cavil at the provisions of this bill. This is merely a formal provision to clear up some uncertainty which had developed.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time. [Quorum formed.]

page 1725

STATES GRANTS (SPECIAL FINANCIAL ASSISTANCE) BILL 1956

Second Reading

Debate resumed from 30th August (vide page 111), on motion by Sir Arthur Fadden -

That the bill be now read a second time.

Mr CLAREY:
Bendigo

.- This bill contains two provisions to which I shall direct attention. The first provision, which is found in clause 4, proposes that a sum of £173,000,000 shall be made available for financial assistance to the various States. The second provision proposes that an amount of £1,050,000 shall be made available to Victoria as special assistance, so the total payment will be £174,050,000.

Before 1 discuss the matters that I desire specifically to raise, I shall point out one or two facts in connexion with the amount that is to be granted to the States under the provisions of this bill. The amount due to the States in accordance with the formula laid down in the States Grants (Tax Reimbursement) Act is £153,600,000. An amount of £20,450,000, which includes the special grant to Victoria, is added to that sum.

During the last financial year, £157,000,000 was made available. That amount consisted of £141,652,000 under the formula, and an additional amount of £15,348,000. The additional amount under this legislation is £19,400,000. An extra amount of £1,050,000 is granted to Victoria, apparently because of difficulties that are being experienced in the dried vine fruits industry and also because of an adverse position that arises in that State as a consequence of the original formula laid down in the 1946-48 act.

I think, it is advisable at this stage to point out that the question of financial assistance to the States has proved to be one of extreme difficulty from the time that federation was first mooted. In the conventions which preceded the adoption of the Constitution and the creation of the Commonwealth of Australia, the subject was thoroughly discussed, and delegates found difficulty in reaching agreement. Eventually, the Constitution was so drafted to provide that, for the first ten years of federation, 75 per cent, of customs revenue should be made available to finance State activities. When one takes into consideration that at that stage of Australia’s development the great bulk of money for the financing of the enterprises of the States came from customs revenue and that customs, by the Constitution, was transferred to the Commonwealth, one can understand the apprehension felt by the States about the source of their revenues.

After the constitutional provision expired in 1911, the States were financed by a per capita grant of 25s., and from time to time since then, various Commonwealth parliaments and governments have endeavoured to find a method whereby financial assistance to the States could be made on an equitable basis, in order to give the States a sufficient share of Commonwealth revenue to enable them properly to carry out the functions entrusted to them.

The present system of financial assistance is prescribed by a formula in the States Grants (Tax Reimbursement) Act 1946- 1948. The introduction of uniform taxation took away from the States the taxing powers that gave them the great bulk of their revenue and left them with only minor taxing powers. As a consequence, and also as a result of discussions which took place, the tax reimbursement legislation was passed to provide a formula according to which the amounts to be granted to the States each year were to be determined. The act provided that, in the first two years of its operation, the sum of £40,000,000 should be apportioned among the States. It provided that, for the year 1949, and thereafter for a period of ten years, the sum of £45,000,000 was to be set aside and adjusted year by year, in accordance with the population of the States and the average wage paid to employees in each State. That system has operated since 1946. We have now reached a stage at which, in the interests of Australia, we must ask ourselves whether this is a satisfactory method of providing the financial assistance which the States require. I venture to suggest that, in view of the many events that have occurred since 1946, the resentment which is felt by the State Premiers concerning the assistance that is given, and the wrangling that takes place at the Premiers’ conferences on this question, most people will agree that the time has arrived for the system to be reviewed with a view to putting a new system in its place.

The Opposition will support this bill, but at the same time, we on this side of the chamber make it clear that we regard the amounts to be made available to the States as totally inadequate and not calculated to keep them solvent. From information which has been made available by State authorities, it is clear that unless a new method of providing financial assistance for the States is devised, some States will proceed rapidly towards bankruptcy. From the taxation stand-point, the Commonwealth is master of the finances of Australia and, for that reason, master of the finances available to the States. The important sources of revenue - income tax and customs and excise - are within the control of the Commonwealth. By means of income tax and the imposition of customs duty and excise, the Commonwealth takes the cream of the funds available for governmental purposes. The States are left with the minor taxation fields, such as stamp duty, registration of motor vehicles, entertainment tax and land tax, which do not yield sufficient revenue to enable them to carry on all of their activities.

The serious position into which the States are drifting is indicated, I think, by statements that were made at the conference of Commonwealth and State Ministers in June last when the whole question of financial assistance was discussed. Five of the State Premiers indicated that their States would have substantial deficits for the financial year which ended on 30th June last, the total being likely to amount to the enormous sum of £15,950,000. They indicated clearly to the Treasurer (Sir Arthur Fadden) and the other representatives of the Commonwealth that unless the amount of assistance was increased substantially in 1956- 57, the deficits of the States could reach the alarming total of £27,550,000. I point out that the amounts that are to be made available will not, by any means, be sufficient to place the States on a sound financial basis during the current financial year. The figures which I am about to give will indicate to honorable members the degree of assistance that the States are to receive this year.

New South Wales will receive, including the special financial assistance granted under this bill. £4.260.000 more than it received last year. Victoria with its additional special grant of £1,050,000, will receive £6,342.000 more; Queensland will receive £2,737.000 more. South Australia, £1,677.000 more. Western Australia. £1,327,000 more, and Tasmania. £707.000 more. I should indicate that South Australia and Western Australia and Tasmania also will receive assistance from the Commonwealth Grants Commission, so that the total amount that they will receive by way of financial assistance for their activities will be more than the figures I have just given. The startling fact emerges, on the figures given by the Premier of New South Wales, that that State is likely to face a deficit of £9,250,000 this year; yet it is to receive only £4,260,000 more than it received last year. Although the Premier of Victoria has asserted that his State will have a deficit of £8,300,000, it is to receive only £6,342,000 more. Although the Premier of South Australia is of the opinion that his State will have a deficit of £5,000,000, it is to receive only £1,677,000 more.

The question that arises is what causes these State difficulties, and why do the States need greater assistance? It seems to me that the present Commonwealth Government has not taken into consideration the very great changes which have occurred in Australia during the last ten or eleven years. Among the reasons advanced by the States for their difficulties are the increased debt charges with which all of the States are faced. For instance, New South Wales last year had an extra debt burden, in interest and sinking fund charges, of £2,250,000 over the amounts paid previously. It is expected that there will be a further increase in 1956-57 of the same amount. A similar position exists in Victoria. Victoria claims that it has to bear an additional burden of £2,500,000. It complains bitterly that the interest rates have been raised from 34 per cent to 5 per cent. More bitterly still does it complain of the fact that, although the people of Australia have been taxed in order to provide capital funds to enable State developmental work to be done, when the States receive that money raised in taxes by the Commonwealth without any difficulty whatsoever, they are charged interest and have to meet sinking fund payments, which result in their having to impose further taxes upon their people and add to the alarming interest burden which the Australian people are being called upon to carry.

Then there is the matter of expansion of State services required as the result of Commonwealth policy and legislation. I select just one matter which is of great importance and has been the subject of discussion in this House on more than one occasion, namely, immigration. The Government’s policy certainly results in people being brought to Australia, but when they arrive the problem of meeting all their social and other requirements falls upon the States, in the building and maintenance of hospitals, schools, enlargement of educational staff, and the one hundred and one other things associated with the education of immigrants, as well as of native-born Australians. Those are adding enormously to the burdens of State exchequers. In Victoria, additional State school teachers are costing over £1,000,000 a year. One can readily see that, as population increases, the burden upon the States of providing schools and obtaining, training and paying teachers, becomes ever-increasing.

In addition, there is the problem of transport, which comes solely within the province of the States. Every State has suffered severe deficits from the operation of its railways. Although the States have imposed higher fares and freights, they are unable to make the railways pay. In New South Wales alone it is estimated that there will be a deficit on the operations of the railways of over £6,000,000 this year. A similar position obtains in Victoria. Nevertheless, the railways have to be operated, and they are providing transport for immigrants as well as old Australians. In some States the proportion of immigrants to the total population is higher than in others. For instance, 32 per cent, of the immigrants to Australia are settling in Victoria. The State has to bear the burden of providing all the additional social services that are required. In addition, the States have to face - the problem of continuously rising costs, very often as the result of action taken by the Commonwealth. Because of rising costs, the States have to impose further burdens upon their people in the form of electricity and water charges, bus and tram fares, and the like.

During the last ten years many alterations in wages and working conditions have had a severe effect upon State finances. One can point, for instance, to the effect of granting long service leave. That imposed a new charge upon the States and upon enterprise generally during the last ten or eleven years, but although the formula takes account of average wages, it does not take account of such changes in conditions of employment which cost a good deal of money. A similar position applies in respect of annual leave. At the time legislation granting this concession was passed in 1946 and 1948, there was provision for one week’s annual leave; now two weeks are provided. Sick leave entitlements have also been increased. Those elements are not shown in the figures for average wages which are published in each State. Increased superannuation payments, higher interest rates, and quickened tempo of development, indicate that the necessity for a review of the basis upon which financial assistance is granted to the States is certainly due, if not overdue.

The other matter which I desire to raise is the position of the States in regard to the money which is raised in taxes by the Commonwealth and is given to the States for developmental work. I think the budget which we debated a few weeks ago showed that in this connexion it is proposed to raise in taxes about £100,000,000. When this money is raised and paid to the States for this purpose, the States have to enter into bonds and pay the current rate of interest, whatever it may be - I think it is 5 per cent, at present - and over a period of years they repay that money, plus interest, fo the Commonwealth, although it is raised in taxes and the Commonwealth has not to go upon the loan market either here or abroad to obtain it. After the Commonwealth has taxed the people to obtain this money for capital works, the States in turn have to tax their people in order to find the necessary money to meet interest and sinking fund charges for 50 or 60 years. I suggest that in such circumstances the charge made for the money is not interest but usury in the worst sense of the term, because the people, having made the money available in current revenue, find that they are further taxed by the States and have to pay interest upon this money. I suggest that there should be a departure from the principles that have been followed by the Government so far. No interest should be charged upon moneys loaned by the Commonwealth to the States. I think it fight and proper that the States should pay the money back to the Commonwealth, but not for the purpose of payment into the Consolidated Revenue Fund. The money should be loaned to the States on the understanding that 3 per cent., 4 per cent., or 5 per cent, will be repaid to the Commonwealth annually, and that the money so repaid will be used to create a revolving fund from which the States could be assisted in the future. In that way, money that we have been lending to the States from the proceeds of taxation levied during the last five or six years would, in the course of time, create a revolving fund and the States could be certain that money would be available to them for developmental purposes. The establishment of such a revolving fund would enable us to overcome many of the present difficulties of raising money for developmental works, would give to the States a guarantee that moneys would “be available for that purpose and, I think, would relieve considerably the pressure that is being imposed on financial institutions now.

Victoria has to pay, this year, an additional £2,500,000 in interest charges. One of the matters to which we, as a Parliament, must give consideration is the enormous burden that the payment of interest charges is imposing on the Australian people. I read recently that no less than 10 per cent, of the revenue of the States and the Commonwealth is being used to pay interest charges. With each new loan, the interest bill increases. Interest is being paid overseas and in Australia, and high interest rates continue. So, the community must be taxed at a high rate.

Mr Drummond:

– Has the honorable member worked out interest charges as a percentage of the national income?

Mr CLAREY:

– I have read that, at present, about 10 per cent, of the receipts of the Commonwealth are being used to pay interest charges. On every occasion when we cause either the States or the Commonwealth to pay more in interest charges, we add to the burden of taxation and make more difficult the conduct of the financial affairs of both the States and the Commonwealth.

Because there is still a great deal to be done in the way of water conservation, the construction, repair and maintenance of road’s and railways, and the general development of the country, it is probable that we shall have to borrow more heavily in the future than we have borrowed in the past. As our population increases, the necessity for more intense development will become apparent. Therefore, from the standpoint of the community, and also from the standpoint of the States, which will be required to do the greater part of the developmental work, it is essential that a policy of low interest rates be applied. Otherwise, we shall be overwhelmed by interest payments.

This measure is most unsatisfactory to the States. It will not make available to them the money that they should receive. I have no doubt that the Treasurer (Sir Arthur Fadden) considered that he was being very generous when he increased the total grant to the States from £157,000,000 to £174,000,000. But the States are faced with budget deficits. They are encountering the greatest difficulty in keeping their roads in order. They are finding it almost impossible to construct new roads and to strengthen and repair existing roads. A great deal of their revenue is being used for patching up and repairing schools. They are finding it difficult to make the necessary alterations to their railway systems and to provide the hospital services that are required. The extra money that has been granted to them is not sufficient to enable them to discharge their obligations.

The Opposition believes that the Government should have given greater consideration to the problems with which the States are faced. If the States have budget deficits, as has been suggested, to the extent of £8,300,000 in Victoria and £9,250,000 in New South Wales, that will add to the debt of the community, because the only way in which the States will be able to get out of their difficulties will be by funding their debts. In that event, sooner or later they will be forced into a policy of retrenchment, which will have grave effects on the economic life of Australia. From every stand-point it is desirable to give more generous assistance to the States. If we do not do so, the economy of Australia will be adversely affected. It is obvious that if the States cannot balance their budgets, that will be a bad thing for the country. It will have an effect upon every section of the community. Therefore, in the interest of Australia, we must see to it that the States have an opportunity to balance their budgets.

Mr Turnbull:

– Hand them back their taxing powers.

Mr CLAREY:

– The honorable member for Mallee (Mr. Turnbull) mentions taxes. I do not desire to make lengthy quotations from reports of the proceedings of

Premiers conferences, because I think that would bore honorable members. However, if the honorable member for Mallee desires to have full information about the extent to which the States have increased taxes and made retrenchments, as well as about their difficulties in relation to roads, hospitals and schools, I suggest that he read the report of the last Premiers Conference. If he does so, he will be as wise a man as 1 am.

Mr Turnbull:

– That was not my point. That is just a red herring.

Mr CLAREY:

– In conclusion, let me summarize the Opposition’s suggestions. We think it is necessary to review the existing legislation in connexion with financial assistance to the States. The legislation dates from 1946, and I suppose that during the last ten years there has been a bigger expansion of the activities of the State governments than at any other time since federation. We are living in a rapidly changing world, and the States now are required to undertake tasks in fields which, many years ago, would have been regarded as fields in which the States should not interfere. I believe that the tax reimbursement formula is out of date and that it should be brought up to date. There should be a much more generous approach to the problems of the States, and for that purpose a review of the current legislation is necessary. 1 have referred to the establishment of a revolving fund. I believe that if such a fund were established, it would bring about conditions of stability in the field of financial assistance to the States and the problems of obtaining the money necessary for capital development would not press so hard upon the Commonwealth as they have done during the last five or six years. The States will provide their own money in this revolving fund, and as a consequence will be able to look forward with some assurance to a ready availability of money for developmental works.

Those are the Opposition’s views. We believe that if the Government does as we su ggest it will be doing something statesmanlike for Australia and will help greatly to. overcome the difficulties of the States.

Mr HULME:
Petrie

.- At this late hour I do not intend to try to refute many of the comments made by the honorable member for Bendigo (Mr. Clarey), but I shall direct attention to some of his remarks and draw conclusions other than those he has arrived at from the facts as I see them. I think I should mention at the outset two matters which I had not intended to deal with until I heard the honorable member’s remarks. The first concerns the cost to the States of education needs arising from the immigration programme. I remind honorable members that when I spoke only a few days ago in the debate on the Estimates about the education costs arising out of the immigration programme, I pointed out that 75 per cent, of the increased cost of education results from Australia’s natural increase of population and only 25 per cent, from the children of immigrants who have come to Australia since World War II. Having made that point, I think the honorable member for Bendigo will appreciate that the impression he endeavoured to create is entirely wrong. I remind him also that 75 per cent, of the immigrants have been added to the work force, compared with only 25 per cent, of the natural increase. I suggest that the contribution made by immigrants in the field of education as well as in the field of industry more than balances the increased costs of services rendered in the isolated cases mentioned by the Opposition.

The honorable member for Bendigo also mentioned the problems of the States in relation to roads. I think it is a good idea for us to remind ourselves of what the present Government has done to assist the States to overcome their road problems. In the financial year 1949-50 the Commonwealth contributed £9,267.000 to the States in Commonwealth aid roads funds for road works. In the financial year 1955-56 the Commonwealth’s contribution was no less than £26,500.000, and in the current financial year it will be £31 .500,000. This represents an increase of more than three times since 1949-50. I suppose any honorable member could say that this is not sufficient and will not cover the cost of new roads and repairs to existing roads, and could prove his case. I think it is recognized by all honorable members that it is impossible for the Commonwealth to provide in any one year, or even over a period of five years, sufficient money for the

States to undertake all the necessary road works in addition to other essential works. So I am sure no one will be lead astray by the remarks of the honorable member for Bendigo or will criticize the Commonwealth for what it has not done to assist the States, but rather will commend it for what it has done. I think that if we compare the funds provided by the Labour Government in its last year in office and those provided by this Government, it will be seen that the present Government merits the people’s commendation. The amount provided by the Commonwealth under Part 4 of the Estimates in payments to or for the States in 1949-50 was £101,000,000. In the current financial year it will be £244,000,000. In 1949-50 the Commonwealth provided a total of £120,000,000 for the States, and it will provide a total of no less than £274,000,000 in the current financial year. I suggest that if we have regard to those figures we shall perhaps agree that there is little substance in the comment made by the honorable member for Bendigo except on the general basis, which I have mentioned, that it is impossible to find all the money required by governments, private industry, and local authorities at the present time.

I shall now proceed to make some general comments on this measure. The honorable member for Bendigo has correctly pointed out that its purpose is to provide financial assistance additional to that provided under the formula prescribed in the States Grants (Tax Reimbursement) Act 1946-1948, under which the States are entitled to £153,600,000 in the current financial year. This bill provides for an additional grant of £20,450,000, which includes an additional special grant of £1,050,000 for Victoria. This compares with a special grant of £15,348,000 made last financial year. The first mention of special assistance of this type was contained in the 1950 budget speech of the present Treasurer (Sir Arthur Fadden). I point out that during the previous eight years there was no provision for such special assistance in the budgets of the Labour government. This special assistance was instituted by the present Government and, as I have said, was mentioned for the first time in the 1950 budget speech. I remind the House that when the Treasurer brought down that budget he mentioned that although the formula under which tax reimbursement grants were made to the States had been adjusted in 1948 it was not intended to alter it in 1950, because the special assistance was to be given for 1950-51 only. I direct the attention of the House specially to that comment. As we have seen since, special assistance was given to the States not only in 1950-51, but also in varying amounts in each financial year since under the administration of this Government. As the honorable member for Bendigo pointed out, the formula was first promulgated in 1946, and was altered in 1947 and again in 1948, but it has not been altered since.

In 1950 the Treasurer indicated that discussions between the Commonwealth and the States in relation to these financial problems would be held. There have been many such discussions since 1950, but we have not been able to solve many of the problems. However, I am not completely satisfied that the amount that is provided in this bill is an indication of a correct approach to the problem. Might I ask why the figure of £20,000,000 was decided upon? Without desiring to criticize the Treasurer (Sir Arthur Fadden), I must say that I have not found one reason in his speech for the provision of this amount of £20,000,000. The only reference to it which might be interpreted as a reason is the statement that when the Commonwealth representatives met the State Premiers in June last it was decided that the Commonwealth would make a total contribution of £173,000,000, but that the amount calculated by the application of the formula was only about £153,000,000, so that the Commonwealth, it was decided, should give an additional £20,000,000. Such meagre information is insufficient to justify this appropriation of £20,000,000 for the States.

The amount itself does not bear any fixed percentage relationship to the actual tax reimbursement. It is, I admit, distributed to the States generally on the same basis as the tax reimbursement under the formula, but it has not, over the years, borne a fixed percentage relationship to the tax reimbursement. In this particular year that is under consideration it represents about 13 per cent, of the total of the tax reimbursement, but the percentage has fluctuated between 1 1.5 per cent, in 1955-56 and 39 per cent, in 1951-52. I suggest that this is not a proper method of making moneys available to the States year by year. It would appear to me to be more in the nature of a haphazard payment than a payment based upon reason or upon the many considerations that are put forward by the States at Premiers conferences and at meetings of the Australian Loan Council. I hope that in the concluding stages of the debate on this bill the Treasurer will tell us why the Commonwealth believes it is justified in making this additional amount of £20,000,000 available to the States.

The honorable member for Bendigo (Mr. Clarey) suggested that the amounts provided for the States were totally unsatisfactory, that the Premiers would feel resentment, and that some of the States are heading for bankruptcy because of their treatment by the Commonwealth. I invite the honorable member’s attention to a situation that is disclosed by an analysis of the figures for Queensland, which, I believe, are similar to those for the other States. If we go back to 1947, we find that in that year the Commonwealth provided only 45 per cent, of the total revenues of the Queensland Government. In 1950, the Commonwealth provided 47 per cent., but in 1955, which is the last year for which I have figures, the Commonwealth provided 56 per cent, of the revenues of the State of Queensland. It appears to me that the Commonwealth has accepted more than its responsibility, but that the States themselves have not maintained a reasonable level for the portion of their revenues that is collected directly by them.

Mr Clarey:

– I think the honorable member will agree that their field of taxation is very limited.

Mr HULME:

– That may be suggested, but I remind the honorable member for Bendigo that when this Government came to office a Commonwealth entertainments tax was being imposed. We have since vacated the field of entertainments tax. I am reminded that a federal land tax was also in operation. In my recollection, there has always been a State land tax in Queensland, and I can assure the honorable member for Bendigo that the Queensland Government has not been as solicitous for the people of Queensland in regard to land tax as the Commonwealth Government has been. That tax has proved a pretty serious burden for many of the people of Queensland. We have vacated at least those two fields of taxation, which have become available to the States, and have in fact been entered by some of the other States for the purpose of raising some of their own revenue. If we were to examine the various avenues available to the States for raisingrevenue, I think we would find that the States have not availed themselves fully of their opportunities.

The Labour Government in Queensland has continually raised the howl, as has the Labour Opposition in this chamber, that this Government has continued to increase taxes. We have been subjected to demands for continued increases in taxes so that finance might be made available for not only our own services but also those of the States. Let us consider, for example, stamp duty on cheques. This stamp duty in Queensland still stands at 2d., as it did ten years ago. Does the honorable member for Bendigo deny that there is an avenue, small though it may be, of increasing State revenue? The opportunity has been availed pf by other State governments. I believe that other such opportunities are available, and I say quite definitely that in my humble opinion the State governments should try to raise a reasonable proportion of the revenues that they spend from time to time.

Mr Clarey:

– If the honorable member examines the position of the various States I think he will find that they are doing what he suggests, but that they are unable to bridge the gap.

Mr HULME:

– I cannot agree with the honorable member’s contention. I shall mention another factor in a few moments that has an important bearing on the situation that the States have allowed to develop. While I am dealing with this particular bill, however, I wish to comment that we have reached a cross-roads in relation to this problem. It is time that the Commonwealth considered amending the formula that has been used. If we decide, as a Commonwealth government, that we will continue to provide 50 per cent, or 60 per cent, of State revenues, then I believe that the formula should be adjusted to make an appropriate provision in that regard. We should not continue with this haphazard approach to the problem, following a formula to a degree, but then giving an additional amount year by year that represents 5 per cent., 10 per cent, or more of the tax reimbursement. 1 remind the House, as I did earlier, that when the Labour government was in office it did not give any special assistance in this direction. We can regard it as reasonably certain that if the Australian Labour party came to power again in the federal sphere it would not make special grants of this kind, and the finances of the States would be in a much more chaotic condition than they are under the present scheme. I believe, therefore, that the formula should be amended so that the government of the Commonwealth, whether it be Liberal, Australian Country party or Labour, will know where it stands.

I move now to another aspect of the matter, which I believe is closely bound up with the question of making money available to the States. Although I cannot give the figures for last year, I may inform the House that for the three previous years the loss on the railways in Queensland was £8,700,000. ls it the responsibility of the Commonwealth to cover such losses on the State railways throughout Australia? Surely the honorable member for Bendigo would not submit that, irrespective of maladministration by State governments, of whatever political colour, the Commonwealth is always under an obligation to provide the money to cover those losses.

Mr Clarey:

– I think that the Commonwealth should take the railways over.

Mr HULME:

– The honorable member for Bendigo can always slide out of a situation by producing a suggestion which is ridiculous. I suggest that if the Commonwealth took over the railways, their position might be worse, particularly under a Labour administration, than it is under some State administrations at the present time. But I submit to this House that the State governments are themselves responsible for a good deal of the difficulties with which they are faced in relation to their finances at the present time.

Let us look at the situation which existed last year, as mentioned by the honorable member for Bendigo, when the States had a total deficit of £15,000,000 or £16,000,000.

Mr Daly:

– Cheer up!

Mr HULME:

– The honorable member for Grayndler (Mr. Daly) should tell us how he lost the position of party whip. I asked the Prime Minister (Mr. Menzies) a question this afternoon in relation to the funding of these deficits. Since I asked that question, 1 have ascertained that the New South Wales Government and the Queensland Government have funded their deposits from their own trust accounts. It might be of interest to the honorable member for Bendigo and other members of the Opposition to be told that some State governments have had very substantial balances under their care to which they have been adding, year by year, and which they have shown no inclination to spend. In 1955 the Queensland Government had funds totalling no less than £26,000,000 and when it creates a deficit, it is possible out of its trust fund to cover the deficit - to fund it in that way. In Victoria the deficit is being funded out of this year’s loan allocation.

In addressing my question to the Prime Minister this afternoon, I also raised the question of whether there had been an attempt to obtain a guarantee from the States in relation to this deficit financing, or budgeting. I believe it may be necessary for the Commonwealth, in relation to adopting an improved formula for assisting the States finances, to expect the States to balance their budgets year by year. I do not want to go into many of the details that bring about these details, because they are just as well known to every other member of the House as to myself. I believe that this Government has done its best, in planning its budget, to assist in restricting the inflationary spiral, but many of the State governments have actually made our task much more difficult. There is nothing that is more inflationary than deficit budgeting by the State governments, and I think that nearly all of them have been responsible for it in the financial year ended 30th June last. The States should give the guarantee to which I have referred. If they are not prepared to give it, the Commonwealth must hold the gun at their heads and indicate to them that their next year’s contribution will be reduced as a result of their attitude. I think that the States must show themselves to be more responsible in the future than they have been in the past.

In any discussion of Commonwealth and State financial arrangements, the subject of uniform taxation is always raised. The honorable member for Mallee (Mr. Turnbull) mentioned it a little while ago by way of interjection. I do not desire to express any views in regard to it in this debate. I have done so on other occasions in the House.’ I prefer, on this occasion, to concentrate my remarks on the subjects that 1 have raised, and I should like to summarize them in this way: Firstly, the Treasurer should give a more detailed explanation to the House for the reason for making this payment of £20,450,000 to the States. As I said before, I think that the explanation, so far, must be regarded as unsatisfactory to a Parliament which is asked to appropriate the money. Secondly, I think that consideration should be given to whether the States are accepting reasonable obligations and responsibility in relation to their own revenue. At this stage, the Commonwealth should determine approximately the percentage of State revenues that it will contribute and the States should be made responsible for the balance. Thirdly, I think that the Government should review the formula under which we are operating at the present time. In addition, we should consider the restrictions that I mentioned a few moments ago, particularly in regard to the deficits which were incurred last year and which may be incurred next year, and in future years by State governments. If they are not prepared to stand up to their responsibilities and balance their budgets, the Commonwealth should consider inserting a provision in this legislation whereby the Commonwealth could take from the States part of the amounts that they were due to receive in the following year, so that deficit financing would not occur as an unfortunate boost to inflation in the community.

Debate (on motion by Mr. Duthie) adjourned.

page 1734

ADJOURNMENT

Motion (by Mr. Davidson) proposed -

That the House do now adjourn.

Mr WARD:
East Sydney

.- Mr. Speaker-

Motion (by Mr. Davidson) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 52

NOES: 30

Majority . . . . 22

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 10.53 p.m.

page 1734

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Aircraft Production

Mr Bryant:

t asked the Minister for Defence Production, upon notice -

  1. Have any efforts beenmade to sell to overseas countries Canberra and Sabre aircraft produced by the Government aircraft factory?
  2. Has the New Zealand Government approached the Commonwealth Government with a view to the purchase of these types of aircraft?
  3. If so, what progress has been made with the negotiations, and when will the programme commence?
  4. If there has been no approach from New Zealand, will the Government attempt to obtain overseas orders for these aircraft in order to help preserve the aircraft manufacturing industry and prevent unemployment and the permanent loss to the industry of skilled tradesmen?
Mr Beale:
LP

– The answers to the honorable member’s questions are as follows: -

  1. Action has been taken to interest overseas countries in the purchase of Australian-made aircraft generally.
  2. No.
  3. See 2.
  4. Yes.

St. Mary’s Filling Factory

Mr Barnard:

d asked the Minister for De fence Production, upon notice -

  1. What is the anticipated date of completion of the St. Mary’s filling factory?
  2. What has been the cost to date of the construction of the factory?
  3. What is the estimated final cost?
  4. What was the original estimated cost?
  5. What was the original estimated date of completion?
Mr Beale:
LP

– The answers to the honorable member’s questions are as follows: -

  1. December, 1957.
  2. £10,716,000 as at 1 7th October, 1956.
  3. On 23rd July. 1956, the architects, Messrs. Stephenson and Turner, advised that the final cost would be approximately £23,000,000.
  4. £23,200,000.
  5. December, 1957.

Imports of Small Arms

Mr Luchetti:
MACQUARIE, NEW SOUTH WALES

i asked the Minister for Customs and Excise, upon notice -

  1. What was the (a) total number, (b) value and (c) country of origin of (i) rifles and (ii) small arms imported into Australia in each of the yean from 1950 51 to 1955-56, inclusive?
  2. Were any of the weapons for military purposes: if so, what was the number and value?
Mr Osborne:
LP

– The answer to the honorable member’s questions is as follows: - 1 and 2. Statistics of imports of military weapons are classified under the heading “ Military (Army, Navy and Air Force) Equipment and Stores imported by the Forces “ and it is thereforenot possible to give separate details of importations of military rifles and small arms. However, I have set out in the attached schedule details of the importations of guns, rifles and small arms for the years asked. These importations have been made from eleven different countries, and the details of the quantities imported from each would occupy excessivespace. I will be glad to supply them to the honorable member if he so wishes. The principal countries of export of these articles are the United Kingdom, Belgium, France, Italy and Spain.

Wall and Floor Tiles

Mr L R JOHNSON:
HUGHES, NEW SOUTH WALES · ALP

son asked the Minister acting for the Minister for Trade, upon notice -

  1. Have quotas for imported wall and floor tiles been reduced by two-thirds in the last twelve months?
  2. Is this quota reduction a direct resultof representation by a local manufacturer who markets tiles at a price approximately 30 per cent. higher than that for imported tiles?
  3. Is the quality of locally made tiles considered to be inferior to that of imported tiles, with a consequential higher laying cost?
  4. Does the reduced quota have the effectof protecting an industry which the Tariff Board described as wholly uneconomic?
  5. Are building costs inflated as a result of the reduced import quota of tiles and the subsequent increased use of local products?
Mr McMahon:
LP

– The answers to the honorable member’s questions are as follows: -

  1. Yes. The additional restrictions which became effective on 1st July this year had the effect of reducing quotas for wall and floor tiles to about one-third of the level operating at 1st July, 1955.
  2. No. The decision to reduce the scale of licensing of tiles was made solely with the object of conserving overseas exchange. In determining the level of quotas, however, the output of the several Australian tile manufacturers was taken into account.
  3. I am not personally aware of any difference in quality between locally made and imported tiles. I am informed, however, that opinion is divided on this question.
  4. As in all cases where local production is taken into account in determining the scale of licensing of a particular class of goods the Australian tile manufacturing industry is afforded a degree of protection through the operation of import licensing. This, however, is incidental to the purpose for which the controls were imposed and the protective effect is of a temporary nature only.
  5. I am not aware of an increase in building costs as a result of the reduction in import quotas for tiles. I understand that the list prices of Australian tiles are slightly higher in some States than the list prices of imported tiles, but I would be surprised if the quantity of tiles used in individual buildings at the higher prices is sufficient to justify a claim that costs are being inflated.

Beverly Hills Post Office

Mr Costa:

a asked the Postmaster-General, upon notice -

  1. When is it expected that postal business will commence in the new post office being erected at Beverly Hills, New South Wales?
  2. What will be the grade of the post office?
Mr Davidson:
CP

– The answers to the honorable member’s questions are as follows: -

  1. The new post office building at Beverly Hills is nearing completion and it is expected that the office will be opened for business towards the middle of December.

    1. The office will be classified, initially, as. Grade 3.

War Service Homes in Tasmania*

Mr Barnard:

d asked the Minister representing the Minister for National Development, upon notice -

  1. What was the number of war service homes built and occupied under the group system in. Tasmania during the year 1955-56?
  2. How many group homes are now under construction in the Hobart and Launceston areas, respectively?
  3. How many homes will be completed in each of these areas during the year 1956-57?
  4. How many will be completed in the whole of the State?
  5. What is the total number of applicants to the War Service Homes Division awaiting (a) group home assistance and (b) permission to build privately?
Mr Roberton:
CP

– The Minister for National Development has supplied the following answers to the honorable member’s questions: -

  1. The number of group homes built and occupied in Tasmania during the year 1955-56 was 47.
  2. There are seven group homes under construction in Hobart and nil in Launceston at present.
  3. Tt is expected that sixteen group homes and 65 individual homes will be completed in Hobart and four group homes and 17 individual homes in Launceston during 1956-57.
  4. It is estimated that 26 group homes and 121 individual homes will be completed in Tasmania during 1956-57.
  5. The number of building applications awaiting group homes at present is 215 and the number awaiting individual homes is 110. It should be noted, however, that experience from the inception of the act in 1919 shows that over 50 per cent, of building applicants withdraw in Tasmania when their turn is reached.

Cite as: Australia, House of Representatives, Debates, 23 October 1956, viewed 22 October 2017, <http://historichansard.net/hofreps/1956/19561023_reps_22_hor13/>.

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