House of Representatives
22 October 1959

23rd Parliament · 1st Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1959

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

page 2173

SOCIAL SERVICES, TAXATION AND POSTAL CHARGES

Petition

Mr. MINOGUE presented a petition from certain citizens of Australia praying that urgent steps be taken to alleviate the difficulties created by the Government’s proposals in respect to social services, taxation and postal charges.

Petition received and read.

page 2173

QUESTION

SUMMIT TALKS

Dr EVATT:
HUNTER, NEW SOUTH WALES

– I remind the right honorable the Prime Minister that on Tuesday last he said that he was hopeful that he might be able to make a statement this week on the proposed summit talks. We are left really with only newspaper reports, which seem to be confused and yet, in some respects, are optimistic. I know that the Prime Minister has expressed a hopeful attitude towards this matter, but can he give the House any information either to-day or at a very early date so that we may be properly informed of the position?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– It is very difficult to be well informed about this matter because, as the right honorable gentleman realizes, I do not know what is in the mind of, for example, the President of France, who is one of those who must be consulted on this matter. All I can say is that, in the broad, I am very hopeful that the holding of a summit meeting has become more a matter of timing now than a matter of principle. Therefore, I have a considerable degree of confidence that a meeting will occur, and I do not expect that it will be very long delayed once it is agreed upon. We know the attitude of the Prime Minister of the United Kingdom towards it. We are in constant touch with him, and I have even ventured to offer a few views on one or two matters to the President of the United States. So far as I know, he has not yet publicly indicated his own point of view. I am among the optimists and, as I say, I think that the holding of a conference is rapidly becoming a matter of timing rather than a matter of principle.

page 2173

QUESTION

CANBERRA UNIVERSITY COLLEGE

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I address my question to the Prime Minister. Has any decision been made to amalgamate the Canberra University College with the Australian National University? If so, what considerations have prompted the Government to abandon the decision that there should be one educational institution free to devote itself wholly to research? If the staff of the Australian National University is now to assume an obligation for teaching the young people of Canberra, will it still be free to give seminars at all the universities of the States? If it is not the intention of the Government to amalgamate the Canberra University College with the Australian National University, does the Government intend to proceed with the plan for a new undergraduate level university of Canberra?

Mr MENZIES:
LP

– The problem of the future of the Canberra University College is, as yet, not finally determined. When it is finally determined I will make a full statement not only of the position, but also of the reasons that have produced it.

page 2173

QUESTION

BROADCASTING

Mr FAIRHALL:
PATERSON, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. In view of the poor reception from national radio stations in the upper Hunter districts of New South Wales, can he say when the new radiating system proposed for regional stations 2NC and 2NA is expected to come into service? In the possible event that the new system still does not produce satisfactory service, will the Minister give consideration to increasing the power of one or both of these stations to 50 kilowatts?

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

– I am aware of the fact that there has been a relatively slight hold-up in realizing the Australian Broadcasting Control Board’s plans for improving the reception in the area referred to by the honorable member. This hold-up has arisen from the fact that although the new radiating equipment has been erected, engineers from the Postmaster-General’s Department, on inspection, found that there were some structural defects which prevented them from taking over. Negotiations are proceeding with the contractor to remedy these defects, and my information is that the radiating system should be in operation, say, early in December.

Regarding the other part of the honorable member’s question, it is desired, first of all, to try out the effect of this new radiating system on reception in that area, and to that end the Australian Broadcasting Control Board proposes to send an engineer to make a thorough investigation of the reception after the new radiating system is in operation. Until that is done we cannot envisage the expenditure of more than £50,000 which would be involved in increasing the power of the station either on that site or on an alternative site to SO kilowatts. Because of the interest which the honorable member has in this matter, if he so desires, I shall ask the board to ask the engineer to contact him and discuss with him the results of his investigation.

page 2174

QUESTION

AIR MAIL

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES

– Can the

Postmaster-General say whether, in the new mail handling arrangements between Sydney and Melbourne and Melbourne and Adelaide, all letter mail will be carried by air? What are the new arrangements for handling the huge mail that was carried by rail over the years between the same cities, when parcel freight and the like have been satisfactorily handled by overnight transit? Is there any substance in the rumour that the bulk of the mail between these capital cities will be handed over to Ansett-A.N.A. road transport, including much of the mail which it is now claimed will be carried by air?

Mr DAVIDSON:
CP

– Regarding the last part of the honorable member’s question, it is not planned to send most of the mail by road transport. The policy of the department, which I have already announced, is that air transport will be used for mail wherever this provides a faster delivery. That is the yardstick by which the various services available will be measured. Wherever it is faster to transport mail by air, then air services will be used. In country areas where, perhaps on one or two days a week, there is an air service, that service will be used; but on the remaining days of the week when rail transport would provide a faster delivery, rail transport will be used. But between the capital cities, sufficient services are available to ensure that all the mail will be carried by air.

Mr E James Harrison:

– Including parcels?

Mr DAVIDSON:

– Only those items which go by the all-up airmail scheme, that is, mail in letter form. For other types of mail, if there is an airmail surcharge placed on them, they, too, will be carried by air. I am referring particularly to letter mail which, after 1st November, will not carry an airmail surcharge. I may add that for some weeks now the department has been in close conference with representatives of the airlines, for the purpose of ensuring that sufficient scheduled services will be available to meet all our requirements.

page 2174

QUESTION

UNITED KINGDOM MARKET FOR AUSTRALIAN FOODSTUFFS

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I direct my question to the Minister for Trade. The United Kingdom Minister for Agriculture, Mr. John Hare, said during his recent visit to Australia that improved economic buoyancy and higher living conditions in England would lead to a greater demand for Australian foodstuffs. Can the Minister for Trade say whether this demand was, in fact, increased, and whether there has been any increase in Australia’s exports of foodstuffs to the United Kingdom?

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

– It is true that the value of Australia’s trade with the United Kingdom is increasing, and I think that some of the factors mentioned by the British Minister for Agriculture have contributed to this increase. Last year the value of Australian exports to the United. Kingdom was £34,000,000 greater than for the previous year, notwithstanding a severe fall in the price of wool. The value of frozen beef exports to that country was £15,000,000 greater than in the preceding trading year. The value of wheat sold to the United Kingdom was £8,000,000 higher, of butter and cheese £12,000,000 higher, and of barley £1,000,000 higher. All of this is pretty satisfactory, but we are not resting on our oars.

This year, as >I have said before, £1,250,000 will be spent in the United Kingdom in publicizing Australian goods. About £400,000 of this has been voted by this Parliament. The remainder will be found by the Australian statutory marketing boards and Australian private exporters, and quite a substantial amount by British importers of Australian goods. Last month there was a high-level conference of all the chairmen of the Australian marketing boards, together with representatives of other exporting and importing interests and publicity experts, for the purpose of planning a campaign for the expenditure of this large amount of money.

page 2175

QUESTION

SHIPPING FREIGHTS

Mr KEARNEY:
CUNNINGHAM, NEW SOUTH WALES

– 1 address a question to the Minister for Trade. Is it a fact that during the operation of the Australian Commonwealth Line of Steamers a general reduction in overseas freight charges occurred, and that in the period between 1921 and 1927 the reduction was equal to about half the freight costs of beef, lamb, mutton and practically all other primary produce? Further, is it a fact that the president of the Graziers Federal Council of Australia, Mr. G. W. “Mcllroy, recently stated that the council could see no reason for an increase of freight rates? Is it also a fact that Mr. A. R. Johnston, secretary of the Australian Wool and Meat Producers Federation, stated to press representatives: “ We just can’t take another increase. The Australian meat trade . . . lamb in particular . . . would toe priced right out of the British market”? If these are facts, will the Minister say “what action he proposes to take, as Leader of the Australian Country Party, and also in discharge of his obligations as Minister for Trade, to prevent Australia’s overseas shipping freight bill being increased beyond the present exorbitant figure of about £240,000,000, by the suggested 13 per cent, or any other proportion, as foreshadowed by the overseas shipping combine, and thus to prevent any further large-scale advantage being taken of Australia’s need to develop overseas markets?

Mr McEWEN:
CP

– The honorable member for Cunningham must have found the notes of .the honorable member for Lalor who, I understand, intends to make a speech on this matter in a few minutes. My best recollection of what happened with regard to ship ping between Australia and the United Kingdom in the 1920’s - and of course 1 was not a member of this Parliament at that time - was that the Australian line lost £10,000,000 in quite a short period while engaging in this traffic, and that when the line was sold, so that some one else could have a .go at it, the buyer promptly went broke.

page 2175

QUESTION

SUGAR

Mr BANDIDT:
WIDE BAY, QUEENSLAND

– My question is addressed to the Minister for Trade. Has the Minister’s attention been drawn to statements made that further quantities of sugar in excess of the agreed amount should be harvested and stored, and that new markets should be sought overseas? These proposals have been made in the Queensland Legislative Assembly. Does the Minister consider that the proposals have any value in relation to the problem of excess production of cane?

Mr McEWEN:
CP

– lt is inevitable that sugar producers in Queensland, who have enjoyed the advantage of two splendid seasons, and who last year and this year, I understand, have produced cane in excess of the amount that can be taken under existing arrangements, should be concerned, and that There ‘should be a political suggestion that this cane ought to be taken and crushed. As I understand the position, the suggestion to which the honorable member has referred, which has been voiced in the Queensland Parliament, was made by those who were Ministers of the preceding State Labour Government, who .themselves introduced the legislation that restricts not only the production of cane, but also the cutting and delivery of cane to the mills. I do not say that in a critical way, because there is no bulk commodity in world trade which has a “better record of general price and market stability than has sugar. That record is the outcome of international trade arrangements and, in the countries concerned, of domestic arrangements, broadly designed to equate the production of sugar to die world demand for it, sothat there shall be a prospect of price stability. Australian sugar producers benefit enormously under this agreement, whichenables them to export nearly 650,000 tons of sugar in addition to supplying the domestic .market. I should -think it would be nothing but a retrograde step to break the arrangements that have been so successful.

page 2176

QUESTION

WYNYARD AIRPORT

Mr DAVIES:
BRADDON, TASMANIA

– My question is to the Minister representing the Minister for Civil Aviation. In view of the importance and the growth of the Wynyard airport, which ranks as tenth or eleventh in the handling of passenger traffic in Australia, will the Minister consider the installation of night landing facilities there?

Mr TOWNLEY:
Minister for Defence · DENISON, TASMANIA · LP

– I shall convey the honorable member’s question to my colleague in another place, and see that he gets an answer.

page 2176

QUESTION

WHEAT

Mr FORBES:
BARKER, SOUTH AUSTRALIA

– Is the Minister for Trade aware of the proposal by a privately sponsored Canadian-American committee that the two countries pool their wheat surpluses in a programme for overseas disposal of excess grains to under-developed nations? Can he say how far this proposal has gone, and whether the scheme is to be undertaken within the framework of the arrangements made by him with the United States recently while he was visiting that country, and with other wheat-producing countries, for consultations on the general problem of the disposal of surpluses?

Mr McEWEN:
CP

– I have just heard that there is a proposal, reputedly made by private interests in Canada and the United States, for the disposal of wheat surpluses. It has to be borne in mind that all the surplus wheat in the United States is the property of the United States Government, and all the wheat that is surplus in Canada is the property of a Canadian Government instrumentality. So, quite clearly, any decision in regard to those surpluses must be made by the governments of those two countries. The United States and Canada were quite recently parties to a major conference convened by the President of the United States under the heading “ Using Food for Peace “. From that has emerged a highlevel wheat utilization committee upon which Australia, among the other countries concerned, is represented. That committee is vigorously devoting its attention to devising the very best and most feasible methods of getting wheat to those countries that need it while at the same time preserving reasonable commercial access. 1 am sure that the Governments of Canada and the United States will be interested in new proposals, but there cannot be much that is new coming forward in the light of the great attention that has been given to this matter at a high level in recent months.

page 2176

QUESTION

TELEVISION

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– My question, which I address to the Postmaster-General, concerns the granting of television licences for country districts. In view of the fact that people best able to speak for country interests reside in the rural areas to be served by the proposed television stations, will the honorable gentleman direct the Australian Broadcasting Control Board to conduct hearings in country areas so that local government bodies, chambers of commerce, sporting associations, trade unions and other public organizations may be given opportunities to present evidence with the minimum of inconvenience and expense? Finally, does not the honorable gentleman agree that the holding of the whole of the inquiries in Melbourne, remote from the rural centres of Australia, is a negation of the principle of decentralization?

Mr DAVIDSON:
CP

– This is a matter that I have dealt with on at least two occasions in this chamber recently. On one occasion the honorable member for Paterson asked me a question, to which I replied; and T also dealt with the subject during the debate on the Estimates. The honorable member for Macquarie asks me whether I consider that it is a mistake to hold the hearings in Melbourne, and whether the holding of hearings there would be a departure from the principle of decentralization. My reply is: No, I do not think it is a mistake. As I have said on other occasions, I accept responsibility for the decision to have the hearings in Melbourne, because the proposal was referred to me by the board before a decision was made. One of the prime objectives of the board is to ensure that these extended hearings, covering about 45 applications, are dealt with as rapidly as possible. The board will be able to function much more effectively and rapidly from a central point, such as Melbourne.

In addition, I know that the applicants, who are aware that the hearings are to be held in Melbourne, are in the main quite satisfied with those arrangements and have not complained. Therefore, it is not my intention to give any direction to the board to alter its decision.

page 2177

QUESTION

TICK CONTROL

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– I ask the Minister for Primary Industry whether his attention has been directed to the fact that considerable concern exists in the northern dairying districts of New South Wales over the apparent abandonment by the New South Wales Government of the tick control campaign. In view of the fact that the Commonwealth has generously, particularly in the last few years, assisted to develop this campaign, and in view of the probable great economic loss through red-water fever destroying the dairy herds of the north, can the Minister inform the House of the present position as between the Commonwealth Government and the New South Wales Government? Has he been informed officially of the attitude of the New South Wales Government in this matter and of what it proposes to do to protect the common interest which it, together with this Government, represents?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– I have read many statements concerning the tick problem in relation to the dairying industry. The Commonwealth has included in its Budget an amount of £500,000 for the eradication of ticks so that the dairying industry will not be further detrimentally affected. A review published by the Division of Agricultural Economics recently indicates that in its opinion the dairying and beef industries are losing about £10,000,000 annually as a result of tick infestation. The New South Wales Government is, of course, expected to maintain its contribution towards the eradication of ticks, but the amount that has been provided does no more than hold the position. Conferences have been held and will continue to be held to consider this important matter. The Commonwealth Scientific and Industrial Research Organization is looking into it, and I will consult with the Minister representing this organization.

It is hoped that in the near future a more progressive approach to this problem will be made, so that the industry will not be further affected. Of course, the whole position is affected by the attitude adopted in Queensland and, I might say, by the attitude of cattle owners. When assistance is sought for tick eradication, cattle owners often object. They prefer to live in a tick-infested area, they say, because their cattle are immune; but this is detrimental to efforts to eradicate ticks. After all, every one must help in an eradication programme. In addition, ticks in Queensland spread to cattle just over the border in New South Wales. However, conferences are proceeding and I hope to have more to say on this subject in the future.

page 2177

QUESTION

ECHUCA BALL-BEARING FACTORY

Mr CLAREY:
BENDIGO, VICTORIA

– I preface my question to the Minister for Supply by reminding him that in a question last week I asked whether he was prepared to make a considered statement on the sale of the Echuca ball-bearing factory. He replied that he would give consideration to my request. I now ask him whether he is in a position to make that statement.

Mr HULME:
Minister for Supply · PETRIE, QUEENSLAND · LP

– I have considered the matter raised by the honorable member, and I see no great virtue in making a statement to the House for the purposes of a debate. 1 would point out, Sir, that this factory was established during the war period to fill a gap in essential defence production. It has been maintained by the Government at quite a considerable loss over the intervening years, and recently it was indicated to us that a large overseas manufacturer would probably commence business in the manufacture of ball bearings in this country.

Dr Evatt:

– But not in that city.

Mr HULME:

– I ask the right honorable gentleman to wait for a moment. The Government believed that if it could dispose of the Echuca factory to an overseas company which would maintain the factory at Echuca and so continue to employ people in Echuca, that would be in the best interests of the industry and of the people of Echuca. This is in fact what the Government has done, and we believe that that is the correct approach to the matter.

Dr EVATT:

– I wish to ask a supplementary question. Will the Minister for Supply make a short elaborating statement in order that the matter may be debated at a suitable time, mot at the will of the Minister but at the will of honorable members anywhere in the House? The importance of this matter has been emphasized by what the Minister has said; and the honorable member for Bendigo who asked the original question really wants an opportunity for discussion. Why cannot any member of the House have an opportunity to discuss such an important question?

Mr HULME:

– I think that the pertinent facts in relation to this matter have just been presented to the House by me, and I do not feel that any other particular matters are involved. However, I think that the forms of the House will permit a debate if the Opposition calls for it. I have made a public statement through the press in relation to the sale of this factory.

page 2178

QUESTION

BRITISH IMMIGRANTS

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– I address a question to the Minister for Immigration. Some time ago, the Association of Apex Clubs in Australia indicated that it had a plan for sponsoring groups of migrants from the United Kingdom. Can the Minister give the House any information as to the stage which that plan has reached? Also, is the1. Department of Immigration co-operating fully with the association in this regard?

Mr DOWNER:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– We appreciate very much indeed the interest that the Association of Apex Clubs and similar societies are showing in this important matter of inducing people to come to Australia from the United Kingdom. I shall inquire as to the latest developments in relation thereto, and shall inform the honorable member as soon as I can.

page 2178

QUESTION

PARLIAMENT HOUSE

Acoustics of Chamber

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

– I address a question to you, Mr. Speaker. Requests are repeatedly made for members asking questions and Ministers answering them to speak up. It is extremely difficult for honorable members to hear at least half of the questions that are asked and the replies that are given. In fact, people in Adelaide who are listening to the radio broadcasts of the proceedings can hear replies to questions better than I can hear them myself in this chamber. Is it possible, Sir, to make some arrangement to amplify proceedings for the benefit of members seated in the chamber in order that they may know what is going on?

Mr SPEAKER:

– I think that the answer is quite clear. If Ministers would use the microphones on the table when answering questions, the rest of the House would be greatly assisted.

page 2178

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr MURRAY:
HERBERT, QUEENSLAND

– I desire to ask the Minister for Primary Industry a question. Has the Minister received from the Queensland Government a report making recommendations for the future of the Clare soldier settlement scheme on the Burdekin River? If so, can the Minister indicate when the report will be considered by the Government?

Mr ADERMANN:
CP

– I understand that the report is on the way, but I have not as yet seen it. As soon as it reaches me, I shall convey the import of it to the honorable member.

page 2178

QUESTION

UNEMPLOYMENT BENEFIT

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– My question is addressed to the Minister for Labour andNational Service. I ask the Minister: Is it a fact that figures released by the Department of Labour and National Service indicate that the number of persons in receipt of unemployment benefit has been reduced because the Department of Social Services refuses to pay benefit to unemployed persons who do not satisfy officers of that department that they are genuinely seeking employment? Will the Minister inform me what rules must be complied with by unemployable persons and especially those who have been out of work for more than two years, in order to qualify for relief? Will the Minister confer with his colleague, the Minister for Social Services, in order to see whether a little more humanitarianism can be shown in dealing with the unemployed, and especially those persons who are classified as being “ poor referral prospects “ and unsuitable for reference to an employer, with a view to restoring the unemployment benefit to them so that they shall not have to resort to thieving or scavenging from garbage receptacles?

Mr McMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– The answer to the first question asked by the honorable gentleman is, “ Definitely not “. As to the second question, I think it is generally known that my colleague, the Minister for Social Services, is a very humane person and that he administers his department with a degree of kindness that has not been surpassed, lt is a matter for great regret and, I think, a matter for criticism, that the honorable gentleman from Shortland should use such emotional and, I think, extravagant language. If the honorable gentleman has a letter concerning a particular case which he cares to refer to me and to the Minister for Social Services it will, of course, receive the most careful consideration.

page 2179

QUESTION

SALISBURY RESEARCH ESTABLISHMENT

Mr WIGHT:
LILLEY, QUEENSLAND

– Will the Minister for Supply inform the House whether the weapons research establishment at Salisbury is having difficulty in recruiting physicists, mathematicians and technicians? If so, will the Minister say whether the shortage is causing or is likely to cause the department to fall behind in its programme?

Mr HULME:
LP

– There has been some difficulty in recruiting suitable staff for our trials programme. By degrees, the problem has been overcome, partly by the employment of people from other countries. We do not expect that, in the near future, there will be any real delay.

page 2179

QUESTION

AUSTRALIAN NATIONAL UNIVERSITY

Mr BRYANT:
WILLS, VICTORIA

– No doubt the Prime Minister will agree, with reference to any proposals to amalgamate the Canberra University College with the Australian National University, that the Australian National University is of considerable moment to the nation and to this Parliament. Will the right honorable gentleman make arrangements for the subject to be debated in this House, perhaps under item No. 16 on the notice-paper which refers to the annual report of the Australian National- University, so that honorable members on both sides of the House may turn their attention to the question and, perhaps, bring forward some ideas which would be of benefit to the Government?

Mr MENZIES:
LP

– I can only repeat what I have said previously. The matter has had long examination, lt is getting near the point of decision, and when the decision is made it will be announced, and I will certainly be prepared to state with some fulness the reasons for it.

Mr Bryant:

– Can we not offer a point of view before you make a decision?

Mr MENZIES:

– No. There has been enough argument inside the Cabinet, without hearing more outside.

page 2179

QUESTION

PHENOTHIAZINE

Mr ANDERSON:
HUME, NEW SOUTH WALES

– My question is addressed to the Minister for Trade. In view of the high cost of the drug phenothiazine and its importance as a drench to the sheep industry, will the Government give favorable consideration to the Tariff Board’s recommendation to reduce customs duty on imported phenothiazine?

Mr McEWEN:
CP

– The Tariff Board did report that the duty on phenothiazine should be reduced. The Government has accepted the recommendation and the duty on this drug was reduced by the tabling of a document on 8th October. That document, I understand, may be debated this afternoon.

page 2179

QUESTION

TELEVISION PROGRAMMES

Mr BIRD:
BATMAN, VICTORIA

– I ask the PostmasterGeneral whether it is a fact that the advisory committee on children’s television programmes, in its last report to the Australian Broadcasting Control Board, emphasized that the licensees of television stations should be reminded of their obligation to provide certain standards for children’s programmes? Does the Minister know whether the attention of commercial television stations has been directed to section 15 of the programme standards that were set down by the Australian Broadcasting Control Board, which recommends the kind of television programmes that are considered to be suitable for youthful audiences?

Mr DAVIDSON:
CP

– After the Australian Broadcasting Control Board drew up a set of programme standards for the general guidance of both broadcasting and television licensees, these standards were discussed with representatives of the broadcasting stations, including the Australian Federation of Commercial Broadcasting Stations, and with television licensees, who adopted the standards which are now supervised by the board through a monitoring system. It is true that a special committee has been set up to deal with children’s programmes, and that committee has submitted certain reports. On any occasion when it has been necessary for the attention of licensees to be drawn particularly to any phase of the report, this has teen done. My information from the Australian Broadcasting Control Board is that licensees do make a sincere effort to meet the board’s requirements and to comply with any recommendations that are made by the various committees.

Incidentally, I have been asked whether the children’s committee could extend its operations to some of the other capital cities in which television has been established, and I have replied that whilst we do not want a multiplicity of special committees, we are prepared to consider representations from areas other than those in which the committee now operates.

page 2180

QUESTION

DEFENCE SERVICES

Mr SWARTZ:

– I direct my question to the Minister for Defence. Will a statement be made in the House before the end of the present sitting period regarding proposals for a re-organization of the Australian defence services? Can the Minister indicate when the bill to implement the proposal to amend superannuation payments for the defence services will be introduced?

Mr TOWNLEY:
LP

– The first part of the honorable member’s question relates to a re-organization of the forces. As this is a matter of policy, a statement on the subject is one for the Prime Minister to make. No doubt he will pay attention to it. Superannuation for the defence forces is a matter for my colleague, the Treasurer, and I am sure that he will deal with it.

page 2180

QUESTION

TAXATION

Mr CAIRNS:
YARRA, VICTORIA

– My question to the Prime Minister relates to uniform taxation. Is it a fact that in answer to a question asked of him yesterday by the honorable member for Batman, and also in conversations with the Premiers, the Prime Minister has adopted the attitude that the transfer of taxing powers to the States is feasible and realistic and depends only upon the States agreeing to accept such powers? Is it not a fact that this is a most unrealistic attitude to adopt? Would the Prime Minister, not agree that if the States decided to ask that taxing powers be returned to them he would immediately object because the essential question is not who collects the taxes, but how much is left to the various State governments and the Commonwealth Government in the end?

Mr MENZIES:
LP

– All that I can tell the honorable member in answer to the arguments that he has just advanced is that if he gives himself the trouble to read the full printed, verbatim report of the conference with the Premiers in March of this year he will there find expressed, with my usual lucidity, every view that I have on this matter, and he will also find carefully expressed, with their usual lucidity, the views of six Premiers. I can add nothing to the arguments that then occurred.

page 2180

QUESTION

TELEVISION

Mr TURNBULL:
MALLEE, VICTORIA

– I preface my question to the Postmaster-General by stating that all the questions that have been answered by him recently regarding television appear to have referred to commercial stations. Will the PostmasterGeneral ask for the co-operation of the Government in launching a bold decentralization policy by establishing a national television station in an appropriate rural area in each State?

Mr DAVIDSON:
CP

– In my replies to the several questions that were addressed to me yesterday, I did refer to the Government’s policy regarding national stations. The honorable member for Farrer asked me whether the Government would provide a national station as well as a commercial station in country areas and I stated then, and I repeat now, that there has been no change in the Government’s general policy to establish national stations side by side, metaphorically speaking, with commercial stations so that in television, as in broadcasting, a dual service will be available. Following the inquiry of the royal commission on broadcasting, the Government committed itself to a policy of providing a dual service.

I inform the honorable member for Mallee that when the board has made its report, which is now pending, regarding commercial television stations, the Government will give further consideration at the same time to the provision of a national service.

Mr Turnbull:

– In rural areas?

Mr DAVIDSON:

– In rural areas.

page 2181

SHIPPING FREIGHTS

Mr SPEAKER (Hon John McLeay:
BOOTHBY, SOUTH AUSTRALIA

I have received a letter from the honorable member for Lalor (Mr. Pollard) proposing that a definite matter of urgent public importance be submitted to the House for discussion, namely -

The continuing failure of the Government to control freight rates on Australian exports and imports.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places) -

Mr POLLARD:
Lalor

.- The Opposition’s motive in initiating this discussion is to direct the attention of the Government and the people to the fact that after the 1914-18 war it was claimed, conceded and recognized that Australia had attained the status of a nation. From that period onwards our national status has increased substantially. However, despite our achievements and our ever-increasing progress in what might be called an Asian area, which has a population, in round figures, of 1,500,000,000 people, it is strange that although our shipping routes extend into every corner of the world we do not own one solitary ship that is engaged in the conveyance of our exports and imports.

I understand that approximately 130 ships are owned and operated by an association of overseas shipping companies which is known as the conference lines. Not one of those ships is owned by Australia or by Australians. We are a maritime nation. Our country has 12,000 miles of coastline and a population of 10,000,000 people. For the four years ended in 1958, according to the figures that have been compiled by the Australian Stevedoring Industry Authority, our inward and outward freights amounted to 25,000,000 tons annually. The drain on our resources for the payment of freight on our imports alone amounted to £113,000,000, and on our exports to £90,000,000. As a maritime nation, therefore, we are committed to an annual payment to outside interests of, in round figures, £203,000,000.

Mr Thompson:

– A balance of payments factor.

Mr POLLARD:

– Yes, a balance of payments factor. This Government remains apathetic, inactive and impotent in marked contrast with the previous Labour Administration which had to meet all the embarrassments and difficulties of the war period and post-war era. That Government saw to it that, in regard to our coastal shipping problem, the ships which carried products from port to port on the Australian coast were owned by the nation and operated in the interests of the people who utilized them. That Government built a nationally owned line, and when it left office it had from 40 to 46 ships. They were retained by this Administration, but it placed some shackles on them. In spite of those shackles, according to the report to the Parliament of the Australian Coastal Shipping Commission, in this financial year, allowing for depreciation of £1,258,503, the line showed a profit of £2,091,201 and set aside for payment to the Treasury an amount of £985,507.

This line made the people of Australia independent of profiteering and exploitation by any private source overseas. But after the ten years that this Government has been in office it has not to its credit one solitary achievement in respect to the prevention of exploitation of the Australian people by overseas shipping lines.

What is the set-up? We find that arrangements for shipping freight from Australia are in the hands of an organization known as the Australian Overseas Transport Association comprised of representatives of 22 shipping lines, fourteen representing Britishowned shipping companies and eight European continental shipping lines. In addition, there is representation of the shippers - the exporters, as such - who might buy wool1 or meat and export it. There is also representation of primary producers’ organizations. Periodically this organization meets to discuss freight arrangements and also to revise them. Of course, the powerful factor in the organization is the shipowners who own ships overseas. We have no control over them and they can mark their own ticket and receive, in effect, anything they like to ask.

The other day the Minister for Trade (Mr. McEwen) was asked what the freight increases were in recent years after negotiations between the two factors represented on the Australian Overseas Transport Association. In 1949 the increase on exports was 10 per cent.; in 1951, 15 per cent.; in 1953, 7i per cent.; in 1955, 7i per cent.; in 1957, 14 per cent, and in 1958, on certain refrigerated cargo such as lamb it was 2 per cent., on fruit 8 per cent., on frozen beef 23 per cent., and on chilled beef 31 per cent. Now these interests are at it again. I understand that these gentlemen of the A.O.T.A. are now meeting iri Sydney, and the end result of their deliberations will be something similar to that of 1957.

At that- time, in a debate in this House the Minister for Trade said, “ We will intervene at certain stages as representatives of the Government”. He said that again recently. He intervened, and then proudly announced to the people’ who pay the freights, “ I have achieved a reduction in the 16 per cent, increase claimed by the shipowners. I have been successful in negotiating a reduction of 2 per cent.” How wonderful! Does the Minister think that the overseas shipowners’ representatives on the A.O.T.A. are fools?

Mr McEwen:

– That is completely untrue. I was not involved in the 1957 negotiations.

Mr POLLARD:

– Well, the Government was.

Mr McEwen:

– No, the Government was not involved; you are wrong.

Mr POLLARD:

– Very well. Let us look at the years 1953 and 1955; the actual dates do not matter very much.

Mr McEwen:

– Of course they matter.

Mr POLLARD:

– It is no good the Minister evading the issue. In 1953 and in 1955 it was announced that the Government had succeeded in reducing the demand by 2 per cent. Does the Minister think that the overseas shipowners are so foolish or innocent that when they demanded an increase of 16 per cent, they did not leave a margin for negotiation? Of course they did. He knows, as a primary producer, that when he endeavours to sell his produce he invariably asks more than he thinks he will get in order to leave room to mark his price down a little. That is what is happening in these freight negotiations.

In reply to a question in this House recently the Minister indicated that in the eventual circumstances of an agreement not being reached between the two discordant factors in this organization, he might, if requested, intervene as he had done on previous occasions. These are the facts. We stand powerless as a nation in the grip of this most powerful monopoly. Despite the fact that the exporters of this country, the shippers and the primary producers, have representation on this organization, it is inevitable’ that eventually they will become the victims of the powerful shipowners in this organization. These people own the ships, and the organization is set up.

It has one virtue at least: The arrangement that at certain times in certain seasons at- certain ports ships- will be available to lift fruit, refrigerated cargo and other products of Australia. That is an advantage and it is commonsense to have an arrangement of that sort. But it is utterly neglectful and disgraceful that the Government should- take no action to break this ring. If the Government so wished, although this might not necessarily receive the consent of the Australian Labour Party, it could encourage the Australian ownership of ships engaged on overseas runs, which are now catered for by powerful overseas companies. As far as the Labour movement is concerned, we believe resort should be had to the eventual building up of an overseas line nationally owned by this country. Look at the strange state of affairs in which we find ourselves. In order to obtain the benefits of ship placements at certain times in certain ports, Which is important, we have become a party to this agreement. At this particular period in our history, when all over the world ships are lying idle because the number built is in excess of the world’s demand, and when people outside the conference line are cutting freight rates, we find this conference line takes advantage of the fact of its combination and its arrangement with the exporters - the shippers and the primary producers - and with the consent of the Government seeks to increase its freight rates on Australian products.

By way of an illustration of what can happen, let me digress for a moment to say that in 1954 the charter freight rates foi wheat were in the vicinity of 2s. 3d. a bushel. In 1955, they were 6s. 2d. and in 1956, 6s. 6d. a bushel. There are three bushels to a bag of wheat so that the cost was near enough to £1 a bag to export Australian wheat. Now the charter freight rates for shipping wheat overseas are 2s. a bushel and this conference line, with the power that it has and in the absence of competition from Australian-owned overseas ships, is able to ask something in the nature of another 15 per cent, increase. I do not know the exact amount it is asking but it seems to be pretty close to that figure. That increase bears no relation to the competitive state of world shipping, and, what is more, it bears no real relation to the cost of operating these shipping lines.

In the past, when these rates have been fixed, and these arrangements entered into, the Australian Overseas Transport Association has operated according to what is known as a formula. It is very interesting, because I understand the formula is such that the rate fixed allows the shipowner a profit of 12 per cent.; but it also provides for depreciation to allow him to replace his vessels. So, over the many years in which this formula has been operating - ten years under the present Government - the Australian people have been paying not only for the handling and maintenance of the ships, but also, in effect, the cost of the ships themselves. Yet, we do not own a solitary one of those ships! Surely, the time is ripe for us to show a national spirit, and to do something similar, gradually if you will, to what was done with regard to our coastal shipping. I know the difficulties, but we have our own shipyards, which have completed a programme to give us ample shipping on our coasts.

Mr DEPUTY SPEAKER (Mr Bowden:
GIPPSLAND, VICTORIA

– Order! The honorable member’s time has expired.

Mr McEWEN:
Minister for Trade · Murray · CP

– I say, on the occasion of this debate on shipping freights, as I have said on other occasions, that this is a serious matter and one that I think is quite proper to be debated, from time to time, by the Parliament. I will never resent any attempt to raise this question for debate in the Parliament, although I will not, of course, expect agreement between us.

The approach to this problem by the honorable member for Lalor (Mr. Pollard) is the typical approach of a socialist. Indeed, it is the approach of a fascist, if I may say so. In proposing this matter for discussion, the honorable member, with the support of his party, complains of the continuing failure of the Government to control freight rates - to control the charge by some person for the use of his property. We have to induce confidence in Australia among people in other parts of the world. This country cannot stand completely on its own feet. It is a trading nation. It believes in the comity of world nations, and we must not have it believed in other parts of the world that we in this Parliament will take it upon ourselves to decide unilaterally what some one who is performing a service for our people shall receive by way of payment.

The honorable member for Lalor put forward the incredible proposition that there should not be incorporated in the freight charges an amount to cover depreciation of the vessels used. Dash it all, our entire taxation system contemplates that the owner of property may set aside a depreciation allowance to cover equipment that wears out, but the spokesman in this House for the Labour Party would not allow a depreciation allowance for the shipowners who send their vessels to carry our produce to the far ends of the world. If that is the view of the Labour Party, then the rest of the world will say, “ God help us if Labour ever comes to power “. I think that probably this remark of the honorable member for Lalor was a slip of the tongue. Probably the proposal of this matter for discussion is merely an incident in the political life of the Labour

Party, and I feel that its members have not given any businesslike consideration to the matter at all.

Ours is a country engirdled by the sea. We depend upon shipping services. We would desire, no doubt, to conduct our own overseas shipping services. I have little doubt that in the fullness of time we will do so. But at the present time we cannot do everything, and our resources are strained to the utmost to maintain the tempo of development that we have set for ourselves. It is not, however, merely a question of availability of resources. It is a question whether we would be better off if we were to build in this country, and man from this country, the ships that are to carry our produce to other parts of the world.

It is true that we have an Australian shipping service, partly owned by the Government, and partly owned by private interests, but that shipping service requires complete protection. It requires the protection of an embargo on competition by other world shipping services in our coastal traffic. The Labour Party knows this. The Labour Party subscribes to it. The Labour Party knows that when we build a ship in this country the taxpayer, through the Government, provides, in almost all cases, a 33$ per cent, bounty. On my figures, we would need about 150 ships to cover our overseas trade. The proposition of the Labour Party seems to be that we should build them ourselves. Is that the proposition?

Mr Uren:

– Of course it iS

Mr McEWEN:

– “Of course it is”, I hear from the back bench. We should build them ourselves and pay from £50,000,000 to £80,000,000 in a subsidy on their construction. And then man them with what labour? With Lascars or with Australians? We would man them, of course, with Australians, working under Australian conditions.

Mr Pollard:

– Would not that be awful!

Mr McEWEN:

– Of course, it would be completely proper to do so. I must appeal to you, Mr. Deputy Speaker, for protection against the continual interjections of the honorable member for Lalor. He is browbeating me.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Lalor has already spoken in the debate. He will remain silent.

Mr McEWEN:

– It is quite clear, from a comparison of costs in Australian coastal services with international shipping costs, that we could not compete in the international field. Indeed, when it was recently proposed that a vessel of the Australian National Line should take one cargo of wheat to Japan, the Minister for Shipping and Transport (Senator Paltridge) pointed out that it would cost £24,000 more to do so - at a price that would reimburse the line for its costs - than if the cargo were carried at the prevailing world charter freight rates. There is a fair basis of comparison for us. With the continuous flow of shipping in and out of Australian ports, to and from destinations further away than Japan, to suggest that we should saddle ourselves with a burden of £24,000, or up to £40,000, more for each journey, merely to have the satisfaction of seeing our cargoes carried by an Australian line, seems to me a starkly uneconomic proposal.

Let us get down to earth and talk about the realities of the situation. Australia depends to-day as it historically has done, except for a short period in the ‘twenties, completely upon foreign-owned shipping services. For a period in the ‘twenties we operated a small fleet of international trading vessels, with disastrous financial results. We depend upon foreign-owned ships to carry our cargoes - cargoes that are owned not by the Australian Government but by those who trade in Australian products. Is it not the most normal thing that the people who own the goods that are to be carried should want to negotiate with those who are to do the carrying in order to decide what payment shall be made? That is the normal approach, and, indeed, legislation to make negotiation possible and convenient was passed by a Labour Government in this place in 1931. I think that that legislation was introduced by the Scullin Government. The Bruce-Page Government had conducted the negotiations and framed the measure, but it was passed during the term of the succeeding Labour government. My memory may be at fault on this, but the fact remains that the legislation to permit these negotiations came about in the manner I have described, and that as a result of it there was established the Australian Overseas Transport Association. It was set up with the approval of the Labour Party and the non-Labour parties at the time, and it has operated ever since.

Now, it is true that in 1953 and in 1955 the overseas shipping companies said that in view of increased costs they would have to increase freights. There was nothing novel in that. Wages and costs were going up for everything not only in Australia, but all over the world. The Australian owners of the products that were to be carried went into negotiations and then came to the Government about the matter. I represented the Government on that occasion. They invited me to aid them in their negotiations as an honest broker and bargainer. I did so and, where an increase of 10 per cent, had been proposed, we settled for an increase of Ti per cent. That was not out of line with the increases that were occurring in the cost of goods and services all round the world at that time.

But, since then, the people who actually pay the freight, and the people who indirectly bear the freight - those who produce the wool, the fat lambs, the apples and so on, but do not themselves export and do not pay the freight, but undoubtedly bear the freight - have joined together in saying, “ We should prefer to do this business direct with the shipowners, and not have the Australian Government joined directly or informally as a party “. They discussed this with me. They said that they would like to strengthen the organizational arrangements to enable them to make sure that every one who pays freight, or indirectly bears freight charges, has a voice and a vote. So arrangements were then made with me, with the concurrence of the Government, for the strengthening of what is known as the Federal Exporters Overseas Transport Committee, which is the actual negotiating body.

To-day, we find that the Graziers’ Federal Council is represented on that body, with three votes; the Australian Wool and Meat Producers Association has votes on the body, and so has the Australian Manufacturers’ Export Council. All statutory marketing boards other than the Australian Wheat Board, which does not have its wheat carried by the conference lines, but works on open charter rates, the Council of Wool Buyers, the meat exporters, the apple and pear shippers, and so on are represented by people who are formally chosen from their own organizations, and at this very minute in Sydney, they are in conference, of their own volition, to discuss the periodic review of freight rates.

The proposition put to the Parliament by our socialistic friends on the other side is that the decisions of the people who own the products shipped should count for nothing, and that the politicians should step in and make the decision. I say quite bluntly that that is not the policy of this Government. I say quite bluntly that that is not the desire of the Australian people. The Labour Party has been sitting for ten years on the Opposition benches in this place because the socialists do not comprehend the desires of the Australian people, because they do not understand the businesslike approach of people who devote their labour and their capital to producing goods - something about which the Labour Party can talk, but about which it does not really know much.

The policy of this Government is that when private individuals want to deal with their own products without the benefit of government interference, unless there are powerful and compelling reasons of public interest that dictate otherwise, we will leave the decision to the owners of the products. In this circumstance, while it, of course, could be said that it is against Australia’s economic interest that freights should be higher, that would be in exactly the same category as saying that it is against Australia’s economic interest that other charges, such as wages, should be higher; but there are compelling reasons why these charges and costs do go up in the expanding circumstances of world trade and in our national circumstances to-day.

All the Labour Party is doing in this debate is to expose once more the fact that it is dying to get its hands on the private business of individuals and shoulder out the owners, shoulder out the investors, and shoulder out the workers in these industries, and have the socialist Labour people decide their fate as they did for a period while they were in office, until the people got the opportunity to vote them out of office and so regain freedom for private enterprise so that this country has enjoyed the most remarkable period of all-round prosperity and expansion that it has ever seen. That prosperity is the result of an appropriate combination of government encouragement and the provision of government assistance when it is sought, but basically it is due to the policy of allowing people who know best about their own affairs to engage in handling their own affairs.

Mr WHITLAM:
Werriwa

.- The Minister for Trade (Mr. McEwen) first sought to counter the Opposition’s case by raising a side issue. He said that the case flows merely from socialist ideology. Now, Sir, this debate does not concern any contest between public and private enterprise. It concerns the contest between producers and middlemen. It is not a question of taking over or easing out some private enterprise which is already performing the job. It is a case of providing some measure of control over the middleman. And, because it is a contest between producers and middlemen, no member of the Australian Country Party is willing to speak in this debate other than the Minister for Trade himself, just as no other member of the Australian Country Party spoke on the last occasion on which the Labour Party brought this matter before the Parliament.

This Government was elected by the producers of Australia - the producers of agricultural, pastoral and industrial products; but it leaves all those producers to the mercy of the middlemen. These middlemen are in league with the buyers in Europe, because all those shipping companies are owned in Europe or in the United Kingdom. In addition, they are in league with our competitors in industrial products. That is why we find, for instance, the extraordinary situation that it costs much more to transport a motor car or any other manufactured article from Australia to South-East Asia in one of their ships than it costs to transport similar goods twice the distance from the United Kingdom or Europe to South-East Asia.

The Minister then sought to counter the Opposition’s case by misrepresenting it. He said that the honorable member for Lalor (Mr. Pollard) had suggested that there should be no provision for depreciation of the overseas ships in the Australian trade. The honorable member for Lalor said nothing of the sort. He said that there was more than ample provision for depreciation in the formula hitherto applied. The Tait committee’s report which, significantly, the Minister did not mention to-day, and which he suppressed until after the last debate in this House on this subject, pointed out that in 1954-55 the average annual profit on operations of ships of the conference lines between Australia and the United Kingdom and Europe was 16 per cent, of the replacement costs of the ships. In six years all the ships used on the route could be replaced out of the profits on operations on this route alone.

The Minister then referred to the bigger costs which would be involved, so he says - and he does not authenticate the figures in any respect - by operating a national line ourselves. We have never said that all Australia’s imports and exports should be carried in Australian-owned ships; but we say that at least we ought to participate in the field. It is principally because publicly owned ships have participated in the coastal trade in Australia that coastal trade rates have been kept down. The other factor, of course, is that our coastal shipping lines have land and air competition. The Tait committee pointed out that if it had not been for the Australian Shipping Board, now the Australian National Line, as well as the competition from land and air, freights on the Australian coast would have risen much more than they have. It is the very absence of any competition between Australia and Europe in the means or ownership of transport, that has caused this rise in freights every two years.

There are other countries which compete on just as good crew conditions and just as expensive shipbuilding conditions as Australia. Australia is the only country in the southern hemisphere which does not look after its trade properly in this regard. Argentina and New Zealand own ships, which trade with Europe. South Africa has made a governmental arrangement with shipowners on the fixation of freight rates. But this Government refuses to provide a corrective, either by competing with the shipowners or by making a governmental agreement with them. Australian shippers must therefore negotiate from a position of weakness.

A Commonwealth shipping line could assist our trade as much as and more cheaply than the tariffs and bounties which the Minister constantly advocates. He knows the position of our shipbuilding industry. The last report from the Tariff Board on this subject was presented to him in 1954. He sat on it for ten months. That report revealed that our shipyards were operating at one-third capacity. It estimated that by employing 3,000 people in addition to the 5,000 then employed, the output of our shipyards could be trebled. It pointed out that the private shipping companies were being allowed to order their ships overseas instead of buying them from Australian shipyards. At this very moment four ships are on order overseas for private shipping companies at a time when the shipbuilding yards at Maryborough and Sydney have been forced to give up building.

We in Australia can build any ship required for our foreign trade. We could build a larger ship than any that has ever traded on the Australian run and we could build ships for particular purposes, such as refrigerated ships. That can be done with the existing capacity of our yards, yet we refuse to do it. On 30th June last, the Minister for Trade received another report from the Tariff Board on the shipbuilding industry, but as yet he has not released it. The Tait committee has covered this whole matter of freight rates. It concluded that they were based on what the traffic would bear.

The Minister said that he had intervened in 1953 and 1955 between the shippers and the shipowners on the question.

Mr McEwen:

– By invitation.

Mr WHITLAM:

– That is so, and the acting secretary of his department at that time made it plain to the Tait Committee that the department was acting as an intermediary and not as a principal. He said that the shipowners made information available to the department relating to costs, but refused to give the department information relating to profits. This is the essential information that is required. Two weeks ago, the Leader of the Opposition (Dr. Evatt) asked the Minister a question about their profits, and the Minister has now given the information from the published balance-sheets of the companies. The Peninsular and Oriental Steam Navigation Company is by far the largest operator in these conference lines. It owns four of the other shipping companies - the Orient Steam Navigation Company Limited, the Peninsular and Oriental Branch Service, the British India and the Federal Steam Navigation Company Limited. The P. and O. company capitalized its reserves in 1955 to bring them from £9,900,000 to £16,800,000, and again in 1956 to bring them to £30,600,000. The P. and O. company now has nominally more than three times its former capital of four years ago, but it has all been achieved by the capitalization of existing reserves. Last year, the company’s profit on a capital of £30,600,000 was £5,300,000. The previous year the profitwas £8,700,000, and the year before, £5,000,000. Those profits were earned on the company’s world-wide operations. We do not know how profitable its operations were on the Australian run.

The Minister takes refuge in the fact that this is purely a matter between the shippers and the shipowners - that is, a commercial transaction about which the Australian Government should do nothing and can do nothing. The Government does not take that attitude with regard to import controls and exchange controls. The national interest is no more involved in those matters than it is involved in shipping rates. The Tait Committee estimated that, in 1954-55, the annual profit in operating an average ship between the United Kingdom or Europe and Australia was £176,800, which represents 16 per cent, of the replacement cost of the ship and 31 per cent, of its original cost. By contrast the committee pointed out that in August, 1955, the South African Government had made an agreement with the shipowners which provided, if converted into Australian terms, that instead of the annual profit on the operations of such a ship being £176,800 it would have been only £159,900. If we had a courageous government which would stand up to these shipowners and their various conferences, we would get a better deal for our country. That is something the Menzies Government has failed to do. Where shipping interests conflict with Australia’s interests, this Government decides in favour of the former.

In answer to a question by the Leader of the Opposition, on 1st May, 1957, the Minister for Trade said -

The Government would appear to have little authority in respect of freight originating on the other side of the world, but in respect of freight originating in Australia I have no doubt that the Government does possess authority.

Mr DEPUTY SPEAKER:

-Order! The honorable member’s time has expired.

Mr HOWSON:
Fawkner

.- The honorable member for Lalor (Mr. Pollard) in his speech said that freight rates charged by overseas companies are gradually increasing. The fact is that apart from a small increase with respect to meat exports, which are only a small proportion of our total exports, there have been no freight increases for two and one-half years, and there is no indication that there shall be any at the present time. Nothing has been said that could lead one to believe that freight rates will be increased, and therefore the Opposition is somewhat premature in raising this matter at this stage.

Let us look at the way freight rates have changed in the last 30 years compared with the movement in prices generally. The Opposition favours control of freight rates. But it would not have us control commodity prices and returns to the farmer. A glance at wool prices over the last 30 years shows that they have increased five-fold. Freight rates for overseas shipping companies have in the same time increased three-fold. In fact, the burden of shipping rates in proportion to the total costs of farmers has been steadily decreasing for the past 30 years. As far as the burden of shipping freights is concerned I think that we may well use Mr. Macmillan’s successful slogan - “ The farmers have never had it so good “.

Should the Government intervene in arrangements which, in their own interests, should be left to the farmers? The Australian Overseas Transport Association was initiated, as the Minister for Trade (Mr. McEwen) said, by one government and brought into being by a Labour government. In fact, all parties in this House have agreed that the A.O.T.A. is the best means of getting proper negotiation on shipping rates. At the request of the exporters - the graziers - the Federal Exporters Overseas Transport Committee was set up in 1957. That is a committee on which all interested bodies are represented. Before any negotiations on freight rates are undertaken they must have the approval of the F.E.O.T.C. and the Overseas Shipping Representatives Association. The Government can only intervene when it is requested to do so. When it was so requested in 1953 and 1955, it helped to prevent an increase in freight rates. Since then, the shipper representatives have asked to be allowed to carry out their own negotiations and they have successfully prevented any freight increases.

Since 1957 we have had a situation in which all the cards have been on the table, all the costs have been known and a formula has been agreed upon between all the parties. The people who are negotiating these rates know, therefore, what the costs are and what is a fair and reasonable basis on which to fix freight rates. If the costs are known and if the formula is right, surely the freight rates must be fair and reasonable. If we look at the other situation and consider what happened in South Africa, as mentioned by the honorable member for Werriwa (Mr. Whitlam), we find that, when the South African Government negotiated an agreement, freights increased by 25 per cent, over-night without any warning, because there had not been a long period of negotiation such as we have had in the last few years. We have, in fact, been better off.

The third point that has been made is that the shipping companies have made inordinately large profits as a result of this so-called monopoly. Let us see what would have been revealed if the honorable member for Werriwa had taken his figures a little further. The profits of the shipping companies engaged on the Australian run have, over the last few years, returned 5 per cent, on shareholders’ funds compared with a return of 15 per cent, in normal secondary industries in the United Kingdom and 11 per cent, in normal secondary industries in Australia. Again, we find that the profits of the Peninsular and Oriental companies were £5,000,000 on shareholders’ funds of more than £100,000,000.

The profits were so small that a shareholders meeting was called only last year to consider an alteration in the policy of the company to try to get profits which would compare reasonably with profits earned by other enterprises in either the United Kingdom or Australia. Far from reducing the profits, I should have liked to see them a little higher than they were over the last few years. More investors would then have been attracted to shipping and we might have had more modern methods and fewer obsolete ships on the run between the United Kingdom and Australia.

What is the alternative? Under the present system, we have a good service with ships always available when they are required, no cargoes rotting on the wharfs and no important wool shipments missing overseas sales. In fact, every exporting country uses this conference system. The Opposition has said that we should use Australian National Line ships. But, as has been pointed out already, the extra cost would be £35,000 for a round voyage between Australia and the United Kingdom. This would add £10,000,000 a year which is at least 10 per cent, of our overseas costs. In addition, the conference lines would probably raise freights rather than lower them because they would say that, if the Australian National Line’s costs are 10 per cent, more, they should not be expected to operate for less. This is just what happened in the 1920’s and led to the formation of the A.O.T.A.

The honorable member for Lalor said that we should charter ships. Experience has shown that charter rates would have cost us more over a period of 30 years, or over any other long term, than any other method of shipping goods. The results of chartering can never be forecast. The disadvantage of chartering is that, when crops are in glut and large quantities of goods have to be shipped, the prices to the farmers are low but, with a shortage of ships because of the extra cargoes to be transported, charter rates are higher than ever. The charter system hurts most when the people who need ships can least afford to pay for them.

The points raised by the Opposition are ridiculous in the extreme. The present system has been proved over a long period to work in the best interests of Australia. Ships are available when they are required. Freight rates have been negotiated on a fair and reasonable basis without the necessity for control and the costs are completely open to examination by every person concerned. The result is that the rates have been agreed on fairly and reasonably. The F.E.O.T.C., which represents the people who need ships, is eminently placed to secure a reasonable agreement, and it has done so over the last two or three years. Surely it is wise for us to leave this matter in the hands of the F.E.O.T.C. knowing that, having succeeded in the past, it will succeed in the future and will continue to work in the best interests of Australia.

Mr DEPUTY SPEAKER:

– Order! The honorable member’s time has expired.

Mr BARNARD:
Bass

.- The honorable member for Fawkner (Mr. Howson) commenced his speech by suggesting that overseas shipping freight rates had not been increased in the last two years. The honorable member for Lalor (Mr. Pollard) made perfectly clear that the last increase occurred in 1958. That information was supplied to the honorable member for Werriwa (Mr. Whitlam) by the Minister for Trade (Mr. McEwen) only yesterday. For the information of the honorable member for Fawkner, I repeat that in 1958 freight rates were increased substantially for a certain range of goods. For example, freight on lamb was increased by 2 per cent., on fruit by 8 per cent., on frozen beef by 23 per cent, and on chilled beef by 31 per cent.

The second point of the honorable member for Fawkner was that the freight increases that had been granted to overseas shipping interests; in recent years were reasonable and justified. In the concluding portion of the report of the Committee of Inquiry under the Stevedoring Industry Act 1954, the opinion is expressed that the shipowners engaged in this trade, viewed as a group, in effect had a monopoly of the trade and the conditions were conducive to basing the freight rates on what the traffic would bear. The freight rates are based on what the traffic will bear and are certainly not an equitable charge for the goods that are carried to and from this country.

The Opposition is not opposed to freight increases by overseas shipping companies, if they are justified. We agree that these companies are entitled to a fair and reasonable return for the money that they have invested. But I point out at once that throughout the Australian community widespread criticism has arisen of what will obviously prove to be substantial increases in overseas shipping freights during the next three or four days. The Minister for Trade said that in his opinion this matter should be left to those who represent the overseas shipping interests on the one hand and the primary producing interests of this country on the other hand. However, as I said only a few moments :ago, criticism of proposed freight increases has arisen from all sections of the Australian community, including representatives of primary industries. I shall refer to one or two of those criticisms in a few moments,

As the honorable member for Lalor pointed out, in only three of the last ten years has there not been a substantial increase in freight rates charged by the overseas shipping interests for goods carried to and from Australia. We say at once that those freight increases have had highly detrimental effects on both goods produced in this country and goods imported into Australia. The prices of those goods have been greatly inflated as a result of the high freights charged by overseas shipping interests. But the Government has remained completely inactive. To-day, the Minister for Trade made precisely the same speech as he made in 1957 in respect of overseas shipping freights. He has repeated again on this occasion all the arguments that he advanced then. But the fact remains that the overseas shipping combines have held this country to ransom in respect of freight charges.

Therefore, it may be as well to ask: Who comprise the Australia/ United KingdomContinent Shipping Conference? As I understand the position, it is composed of 21 shipping companies, both British and Continental. It may be said that the freight charges are fixed by an independent tribunal, but we know that the committee which examines proposals for increased freights is representative in the main of the overseas shipping interests. Despite what has already been said in this debate by honorable members on the Government side of the House, there has been widespread criticism of the methods adopted by the overseas shipping companies in determining freight charges. In order to remove any doubt which there may be about the extent to which overseas shipping freights are affecting our export and import trade, let me quote figures which appear in a document in relation to Australia’s overseas trade which was issued by the Commonwealth Statistician in September, 1959. This document shows that, in the financial year 1958-59, our imports totalled £796,700,000 and our exports £813,300,000. The freight charge on imports in that year was £115,000,000. I think we can take it that the freight charges on exports would be at least as much. This gives a total of approximately £230,000,000 in freight charges on goods imported and exported in the year 1958-59. A 10 per cent, increase in freight charges would add a further £11,500,000 to our freight costs on imports alone. An increase of 15 per cent., therefore, would cost us approximately another £17,000,000 a year in freight charges on imports.

I say without hesitation, Mr. Deputy Speaker, that the submission of this proposal for discussion on this occasion is well warranted, because the Government has been completely inactive and has refused to face up to a virtual monopoly by overseas interests. The honorable member for Lalor has made the point that we should establish a Commonwealth overseas shipping line. That suggestion also is well justified. The proposal has been advocated in this Parliament for many years by the Australian Labour Party. Government supporters have stated from time to time, in answer to the arguments advanced by Opposition members, that a previous overseas shipping line failed. I want to point out, for the benefit of the Minister for Labour and National Service (Mr. McMahon), who is now at the table, that the former overseas shipping line did not fail. It was merely disbanded by the government of the day - a tory government which had no interest in the welfare of the primary producers or of those who engage in export and import activities in this country. It is a farce and a disgrace that any government to-day tolerates a state of affairs in which an island continent such as our own is left without any merchant navy except the coastal shipping fleet. I believe that all honorable members will agree that what has been achieved by the Australian Coastal Shipping Commission in the field of coastal shipping could be achieved by it in the overseas field if it were allowed to engage in overseas trade. Developments in relation to freight charges on the Australian coast indicate that, if we engaged actively in overseas trade, we should be in a position to reduce the freight charges imposed in that trade.

A few minutes ago, the honorable member for Werriwa mentioned the profits made by the Peninsular and Oriental group. [ believe that, in two years, that group of companies achieved a profit of more than £30,000,000. This is in direct contradiction of what has been said by the honorable member for Fawkner.

I believe that the Opposition has made out a sufficiently good case, not only in this debate, but also in previous debates, to indicate beyond doubt that a Commonwealthowned overseas shipping line is essential to the welfare of this country. That is the view not only of Opposition members of the Parliament. Indeed, it has been expressed by people who normally support this Government - for example, those who represent the interests of graziers - as is indicated in an article in the Sydney “ Daily Telegraph “, to which I should like to refer.

Mr DEPUTY SPEAKER:

– Order! The honorable member’s time has expired.

Mr McMAHON:
Minister for Labour and National Service · Lowe · LP

– Mr. Deputy Speaker, the proposal before the House is without substance. It is a peculiarly political proposal based on the Opposition’s belief in control purely for the sake -of control, without any regard for the consequences. The Opposition has not thought out the real problem. The real problem is: Can we, by means of control, benefit the Australian producer and our overseas financial reserves?

The matter submitted for discussion is in these terms -

The continuing failure of the Government to control freight rates on Australian exports and imports.

I suggest to you, Mr. Deputy Speaker, that the real questions which we should be debating in this House are, first, whether or not there has been any avoidable loss to the Australian producer as a result of exploitation by overseas shipping interests; and, secondly, whether we, as a government, can do something that will effectively reduce the cost to the producers by building up our own overseas shipping line, as the honorable member for Lalor (Mr. Pollard) suggested.

May I take the second point first - whether it would in fact be practicable to build up an overseas shipping line in such a way as to benefit the Australian producer. I think the facts speak for themselves, Sir, when we consider the ingredients that go into freight costs. First, the cost of building the ships here would be 25 or 33 per cent, more than the cost of building them in the United Kingdom. Secondly, the cost of freighting goods in Australian ships around the Australian coast is considerably higher than the cost of freighting goods to overseas ports in overseas vessels, either those of the conference lines or chartered ships.

I can illustrate that in this way: The cost of shipping a ton of cargo from Fremantle to Darwin - a distance of 1,841 miles - in an Australian ship is now more than the cost of shipping a ton of cargo in an overseas vessel from Brisbane to Hamburg - a distance of 13,490 miles, or 7.3 times as far as from Fremantle to Darwin. There is a classic illustration of the fact that, at present, it is just not practicable for us to build up our own overseas shipping line and run it under Australian conditions. We cannot compete with overseas shipping in freight rates. Of course we should like to do it, if we could, but at present it is not practicable, solely because we suffer from what are known as comparative costs disadvantages, compared with other countries, in terms of both wages and construction costs.

The honorable member for Fawkner (Mr. Howson) has mentioned that the Australian producer has had a fairly good run. Despite the fact that the price of wool has increased fivefold over the last 30 years, freights have risen only about threefold. I conclude, despite the fact that we would like to have an Australian shipping line engaged in international trade, at the present moment this is just not practicable. The honorable member for Lalor, by interjection, is saying something about charters. The Australian Shipping Commission cannot compete in the charter trade unless there are very special circumstances such as the Suez crisis which temporarily bump freight rates above their normal level.

I return to the question of controls. After all, this is the substance of the debate before us. The Opposition has referred to the continual failure of the Government to control international freight rates. Can the Government, in fact, control those freight rates, Mr. Deputy Speaker? It cannot, for these reasons: First, the ships are owned overseas and are constructed overseas. As a Government and a people we cannot control those shipbuilding costs. The ships are manned by overseas crews, either from the United Kingdom or the Continent of Europe. We cannot control the wages and salaries paid to the officers and men on those ships.

To argue in this House that we can control the wages and the salaries of those crews and that we can control the cost of building ships in the United Kingdom or Continental yards, is a denial of the facts. lt is beyond our capacity to do so. Once the facts are pointed out I think that the Opposition’s case must fail. It is just not practicable for the Australian Government to control freight rates on Australian exports or imports.

We do what we can. I was glad, yesterday, to present to this House the annual report of the Australian Stevedoring Industry Authority. It showed that the time lost during last year amounted to slightly more than 345,000 man-hours which, at 1.1 per cent., was the lowest percentage of man-hours lost since records were first kept in 1947. In other words, during the time that this Government has been in office and, to a very small extent, since I have had the pleasure of being the Minister in some sense responsible, the turn-round of shipping in Australian ports has been better than it ever was when the Labour Party was in office and there was continual quarrelling by the Labour Government with the waterside workers and the coal-miners.

Very strong efforts have been made to increase efficiency by such means as palletization and radio pick-ups, with the consequence that last year, as the honorable member for Fawkner has pointed out, the conference lines did not increase their freights for either our exports or our imports. Of course, we are doing what we can to ensure efficiency on the Australian waterfront, and to ensure that that efficiency carries through so that the Australian producer will benefit from it. As my colleague, the Minister for Trade, has well said, there is no need to expect that freight rates will, of necessity, increase this year. I am hopeful that there will be some change in the formula. It is true that it can be open to criticism on the basis that the replacement costs or the investment allowances may be too high. It is perfectly true also that it may be open to criticism on the ground that the profit is, perhaps, too high. That is something that can be effectively debated by the producers’ representatives and the spokesmen for the conference lines.

I agree with my colleague, the Minister for Trade, that we have had fairly good results from last year’s agreement and that there is no solid basis for the criticism of the pegging of freights last year. Of course, it is in the interests of all to ensure that freight rates are kept to the minimum. There is such a thing as a diminishing return. There is such a thing as pricing yourself out of the market. I am certain that, if freight rates go too high the consumers overseas and the importers here will have a real deterrent imposed upon them in their buying from Australia or from overseas, respectively. The overseas shipping interests are well aware that they have very nearly reached the limit that the market can bear. This will be a deterrent to any move to increase freight rates at this juncture, so I am hopeful that freight rates will not be unnecessarily increased.

In this debate, the Opposition has not proved that any advantage would come to the Australian producer or the Australian importer if the policy of control and of near-socialism that it has advocated were adopted by this House. For that reason, I think the Opposition’s case is unworthy of support.

Mr DEPUTY SPEAKER:

– Order ! The Minister’s time has expired.

Mr KEARNEY:
Cunningham

– The remarks of the Minister for Labour and National Service (Mr. McMahon) were in concert with a statement made by the Minister for Trade (Mr. McEwen) earlier in this debate in decrying the suggestion by the Opposition that overseas shipping freights should and could be fixed in this country. In his closing words, the Minister for Labour and National Service refuted the suggestion that we had power to do that. The Minister for Trade also scouted the proposal. But the Opposition is very clear on that point. Trade and commerce with other countries is, in fact, the very first matter in respect of which this Parliament exercises power under the Constitution. We can fix freight rates on goods produced in this country and exported overseas. That contention has been supported by the Minister for Trade himself in response to a question asked by the Leader of the Opposition (Dr. Evatt), in this Parliament, on 1st May, 1957. On that occasion, the Minister said -

The Government would appear to have little authority in respect of freight originating on the other side of the world, but in respect of freight originating in Australia I have no doubt that the Government does possess authority.

There the Minister acknowledges the constitutional power of this Parliament, and, in effect, denies completely and utterly what was said by the Minister for Labour and National Service a few moments ago.

There is every need, therefore, for the setting up of a tribunal under a judge to receive evidence from all parties concerned in this matter - producers, manufacturers, primary producers and shipowners - in order to establish equitable freight rates. At present, freights are pegged haphazardly within an organization in which the overseas shipping interests are a supreme and dominating force. The profits accruing to the shipping lines from freight charges on the Australian trade have spiralled considerably.

It is not we of the Opposition alone who make these claims. The Government is condemned out of the mouths of its own friends. The Graziers Federal Council of

Australia has made a statement on this matter of which Australian Country Party members would have knowledge. When the Graziers Federal Council makes announcements on baser matters the Country Party takes notice of them, but when it makes statements on nobler subjects such as this, the Country Party ignores them. The council recently suggested that a royal commission was necessary in order to review overseas shipping freights. I support fully this suggestion. That statement has come from the bosom friends of the Australian Country Party, but we do not see the mouthpiece of the party and the mouthpiece of the Graziers Federal Council and of graziers’ interests generally rising in this House and enunciating the doctrine that has been laid down by those people who are concerned with the realities of the position.

The Minister for Trade, the best artful dodger that this Parliament probably has ever seen, to-day skirted around the very important question bearing on this matter that was asked of him by me. He has dodged around the allegations that have been made by the honorable member for Lalor. He does not give the facts. He does not come to grips with the problem for the very obvious reason that he is not in this Parliament to come to grips with problems of this kind. Rather is he in this Parliament as the mouthpiece of interests which wish to disguise the irrefutable facts, and the Government is able to get away with all manner of things, including its abject failure as a national government to assist the Australian primary producer and the Australian manufacturer in their efforts to build up Australia’s trade with overseas nations. After all is said and done, the transportation of our goods, whether they be primary products or manufactured articles, is of vital importance. Overseas transport is the lifeline of our economic existence. If we are to compete with other nations in the markets of the world, if we are to find a place in the sun for our primary and secondary production in competition with members of the European Common Market and various other trading agencies and blocs that have been set up overseas, we must be able to transport our poods to the markets of the world at a reasonable cost.

Overseas trade organizations are forcing us into a corner, and we shall be able to extricate ourselves only if we have a virile trade policy that will enable us to maintain our trading position, lt is only if we have a virile trade policy that we will be able to justify the millions of pounds that have been spent by this Government in its efforts to promote trade with other countries of the world. I agree that that money is being well spent, but why deny us the full fruits of our efforts by allowing outside organizations and shipping interests to intrude? They can skim the cream from our trade, and their intrusion is resulting in our cost structure becoming unbalanced. This, in turn, will affect the proper distribution overseas of our goods. This position must be terminated. The control of freights must be vested in this Parliament or in one of its agencies. That is why I have suggested that a tribunal should be set up to deal with this matter.

This morning, at question time, I directed the attention of the Minister for Trade to the statements made by two friends of this Government, but the Minister ignored the important points that were raised. Mr. G. W. Mcllroy, president of the Graziers Federal Council, is on record as having stated recently that the council could see no reason for an increase of freight rates. Mr. A. R. Johnston, secretary of the Australian Wool and Meat Producers’ Federation, an organization which is not connected with the Waterside Workers’ Federation or with the Australian Labour Party, and which has no political sympathy with us, has stated -

We just cannot take another increase. The Australian meat trade . . . lamb in particular . . would be priced right out of the British market.

The Minister for Trade cannot ignore statements by people such as Mr. Mcllroy and Mr. Johnston, who are very knowledgeable, and whose statements cannot -be refuted.

We must create a national shipping line. The failure of the Australian Commonwealth Line of Steamers ‘has been sneered at, but two very important matters must bs borne in mind. In the 1920’s, when losses were being incurred by the Australian line, every shipping line in the world was losing money. That is the first point. The second and most devastating point that has been ignored deliberately by the Government is that the Australian line, by virtue of its competition with other shipping interests, saved the primary producers of this country millions of pounds in freight charges. It ill behoves any one to sneer at the losses that were incurred, if only for that reason. We must re-establish our own shipping line. We have the industries, man-power, brains and skill to do it. Even if it costs 25 per cent, or 33-Jr per cent, more to produce a vessel in Australia than in any other country, let us pay that increased amount as a subsidy to Australia’s national development.

The claim will be made that portion of the increased shipping costs are due to the behaviour of waterside workers which has resulted in a slow turn-round of ships. That statement is completely and utterly false. The 1958-59 report of the Australian Stevedoring Industry Authority states -

The turn around of interstate shipping at the six capital ports improved in 1958-59. Overseas vessels also spent less time in port.

Any delays on the waterfront are attributable to reasons other than industrial disputes, as will be seen by a perusal of the report. It is pointless to suggest that a section of Australian workers is contributing needlessly to cost increases.

Another important point is that the Australian National Line is restricted in its capacity to function and develop as it should. That restriction reflects the mental attitude of this Government towards every matter of national importance. The Government seems to restrict everything that has an Australian flavour. The shipping line should not ‘be restricted -in -any -shape or form, lt should have the right and the power to develop, and be free to compete with overseas organizations. It should not be inhibited in ‘its efforts ‘to function, and any “restrictions ‘that have been imposed to date should ‘be removed.

Mr DEPUTY SPEAKER:

– Order! The honorable member’s -time has -expired.

Mr BARNES:
Mcpherson

.- After having listened to the speech of the honorable member for Cunningham (Mr. Kearney) I have come to the conclusion that the last portion contains a splendid tribute to this Government. He has stated that the recent report of the Australian Stevedoring ‘Industry Authority has indicated a tremendous ‘improvement in the turn-round of ships. As -the honorable member for Fawkner (Mi1. Howson) has stated, there is yet no evidence that there will be an increase in overseas freight rates. If there is not, it will be due to the splendid efforts of this Government to bring peace to the waterfront.

We have heard a number of wild statements during this debate. I am a member of the Australian Country Party, which is most concerned with freight rates because, after all, costs are the most important factor that the primary producers whom we represent must consider. We have to compete on world .markets. We have in Australia a number of artificial costs. We of the Australian Country Party looked to the Opposition for some constructive suggestion by which we might strengthen our position, but all we have heard has been the same old socialist cry of monopoly control, and the suggestion that the national shipping line should carry our overseas freight. If that were done, every primary producer in the country would be at the mercy of inefficient, government-run transport. We have had too much of that. The suggestion has been made that the national line could do a good job. Let me remind honorable members that the pre-war freight rate from Sydney to Melbourne was £1 a ton. To-day, it is £7 10s. a ton. That is indicative of what would happen if we had a national shipping line to carry our produce overseas.

The honorable member for Werriwa (Mr. Whitlam) has suggested that we should adopt the Argentine plan of using our own ships to transport our produce to Europe. I point out to the honorable member that Argentina does not have as many ships as we have. They have 30 ships and we have 49 and, in addition, our tonnage is greater than theirs. Obviously, Argentina has to depend on outside charters. The agreement on freight rates has produced reasonable results over the years. As the Minister for Labour and National Service (Mr. McMahon) has pointed out, the freight on wool has risen three and one-half times and on general cargo three and one-quarter times since 1938. In Australia most of our trouble arises from the handling of ships. There are strikes, go-slow tactics and other factors which produce uncertainty. Ships arrive here to take a cargo of refrigerated meat but because a local strike is in pro- grass they have to spend hundreds of pounds in port dues while they are held up and sometimes leave without cargoes. All these matters come into the picture. 1 have some .figures here which afford a comparison of pre-war costs with those of to-day. The seaman earns eight times as much to-day as he earned in 1938. At the same time, he works a 40-hour week to-day whereas then he worked 56 hours a week; and despite larger gangs and better handling equipment, .stevedoring costs are eight times greater although handling rates are only half those of pre-war days. In the light of these added costs, I think we have done very well .in respect of these modern freight rises.

The whole crux of the position is whether we can bring peace to the waterfront. I believe that we -can. This Government -has done more to give the rank and file of the unions power over their leaders, and only by doing this has it been possible to keep the unions free from the control of Communist elements. We know that the Waterside Workers Federation has one of the most able Communists in Australia at its head. The primary producing industries have had to contend with these sorts of difficulties for many years. I shall mention a case to illustrate the typical irresponsibility of union leadership in Australia. I refer to the Krespi case. Krespi was a waterside worker who was dismissed by his foreman for being drunk on the job. When the foreman told him that he was dismissed he responded by assaulting him. He appealed against his dismissal, and the hearing of the appeal dragged on for many weeks. I shall read portion of the reserved judgment of Mr. Justice Ashburner in that case. “Before doing so I draw -the attention of honorable members to the fact that this dispute involved 3,850 men and the whole community tost 400,000 working hours. Concerning Krespi, the judge stated -

He was registered in April, 1955. In two and a .half years be was twice fined by the Union for misconduct: he was suspended for drinking on the job: and was given a final warning by the ‘Local Representative that if he got into any further trouble his registration would toe cancelled. He is a violent man who has more than one conviction for assault and a dishonest man on whose undertaking I could .place no reliance, In the circumstances there is no room for any clemency and the appeal is dismissed.

This dispute resulted in the loss of 400,000 working hours. That sort of thing is happening all over Australia. These stoppages contribute not only to the cost to the whole community but also to unemployment. Many waterside workers are being thrown out of work as a result of the installation of bulk handling systems. But they suffer most as a result of the irresponsible, go-slow tactics which are ruining their industry. By agreeing to strikes and stoppages these workers are playing right into the hands of Moscow. The coal-mining industry has been ruined by union leaders with Communist views. They have come here to smash our principal industries. The steel, transport and coal-mining industries have suffered to the extent of thousands of men being out of work. More and more waterside workers are being displaced as a result of bulk handling systems, loading on pallets and the use of other equipment. At Port Douglas, a small port north of Cairns, the watersiders demanded stainless steel water containers and all that sort of thing to improve their amenities. But the cost was so great that that port had to be closed.

Motion (by Mr. McMahon) agreed to -

That the business of the day be called on.

Sitting suspended from 12.45 to 2.15 p.m.

page 2196

DEATH OF THE HON. J. J. CAHILL, M.L.A

Mr MENZIES:
Prime Minister · Kooyong · LP

– Mr. Speaker, honorable members will be aware that, after an illness which it was hoped was purely minor and temporary, Mr. Cahill, the Premier of New South Wales, died this morning. I think none of us would wish this unhappy occasion to pass without reference to it being made in this House. Mr. Cahill was, of course, much too young to die; but he had for many years worked with great devotion and great energy for the causes that he believed in, and for the State over whose political fortunes he was called to preside.

During the time I have been Prime Minister I saw a great deal of Mr. Cahill. I will always be pleased to remember that I had the greatest respect for him, and that we lived, though on opposite sides of politics, on terms of close personal friend ship. I think he was a man of integrity and a man of devotion to the causes that he understood and which he did so much to lead. When one knows a man of that kind one inevitably expresses sadness at the news of his death.

It may perhaps be of some comfort to those he has left behind to know, as they will know when the record of these few minutes is produced, that though he was strongly attached to his party, and never unwilling to break a lance in the political lists, he died, nevertheless, holding the respect and, I think, the affection of everybody in this place. I make only those few remarks. It is difficult to say very much. I have been shocked by this news; so have we all.

Dr EVATT:
Leader of the Opposition · Hunter

– What the Prime Minister has said, Mr. Speaker, is very true. The shock of to-day’s news, following upon the early reports that Mr. Cahill’s illness would not be a long or very serious one, affects us all. Not only the members of the Labour movement, but all the people of New South Wales, and, I think, of Australia, will share our deep grief and extend loving sympathy to Mrs. Cahill and the bereaved family. I hope it will be some comfort to them to learn that the national Parliament has taken notice of this important and very tragic event.

Joe Cahill was one of the great figures of the modern Labour movement. In times of great difficulty and crisis he was steady and sure in his handling of public affairs, and in his general leadership of New South Wales. We remember that he came to the New South Wales Parliament as one of the leaders of that great organization, the Amalgamated Engineering Union. He served continuously in the Parliament from 1925 - a very long time - except for a short period at the very worst of the depression, when he was out of Parliament largely because of the disputes that took place at that time. What he has done since then, I think, has been in accordance with the greatest traditions of the Australian Labour movement. Legislation of national importance, of social importance and of industrial importance was introduced during his term of office, and with it his name will ever be associated. There were, for instance, the reforms in connexion with the industrial rights of women workers in New South Wales.

I think we are suffering too much from the surprise and shock of the news to try to estimate the value of Mr. Cahill’s services to New South Wales, to Australia, and to the Labour movement. Certainly the words that we choose to express our grief and sorrow at the loss of our great friend, a man of courage, character and great bravery, are quite inadequate. In making this tribute I try to speak, and I am sure I do, for all members of our Federal Parliamentary Labour Party, and for the other people concerned, particularly New South Wales people. I especially value, as I am sure the Labour movement will value, the words that have been expressed by the Prime Minister.

Mr McEWEN:
Minister for Trade · Murray · CP

– I. desire to associate the Australian Country Party with the expressions of regret and sadness that have been uttered at the death of Mr. Cahill, and with the expressions of sympathy to his family and the friends whom he leaves. Mr. Cahill has been a distinguished and important figure in the Australian scene in recent years. He served his party, and, I am sure, he made his contribution towards his State and his country. He leaves a record of achievement and of personal reputation that will endure and, I think, will be taken as a standard for others to observe.

Mr. Cahill has been known to us in the political scene as a fighter. In this vocation we admire a man who can fight and still retain the respect of those with whom he crosses swords. I am sure we would all be happy if this could be said of us. He was the leader of his State during a period of immense expansion and development, and I am sure he will be remembered for his contributions towards that development. My party joins fully in the expressions of regret and sympathy in these sad circumstances.

Mr E JAMES HARRISON:
Blaxland

– As one who served with the great Joe Cahill in the State Parliament, may I be permitted to say a word about the great sacrifice that he made, not only in his political activities, but also in further ing the industrial progress of the people of New South Wales. I was fortunate enough to serve with him, and I recognized many years ago his sterling qualities. He was ever ready, as has been so capably said to-day, to serve the interests of the party to which he was attached. But over and above that readiness there was a determination to serve, in a loyal and true fashion, the people of New South Wales and of Australia, and to further their welfare. He was a man of outstanding quality. He understood what was necessary for the nation as well as the State. He realized that every member of the community, whether rich or poor, had a part to play in the making of this great country. It is not only New South Wales that has suffered a devastating loss as the result of the tragic passing of this national leader. I describe him in this way because a national leader he has proved to be. He has demonstrated over many years his qualities of leadership, first of all as a Cabinet Minister and then during a record term as Premier of New South Wales. He gave a lead that called forth the best from the people of New South Wales. That New South Wales advanced as it did under the leadership that came from this great statesman is to Mr. Cahill’s everlasting credit.

The tremendous shock suffered by all of us is small in comparison with the shock suffered by Mr. Cahill’s loving family this day, and by those who were closely associated with him. I, as one who came here from the New South Wales Parliament, express not only on my own behalf, but also on behalf of my party and all my friends, what I know is running through the minds of the members of the New South Wales Parliament to-day - that they have lost a true and loving friend, that they have lost a great leader, that they have lost a great Australian. As has been said, if the words uttered here to-day bring some solace and some comfort to the loving wife and children of our departed friend, something will be achieved as a result of what was commenced so magnificently by the Prime Minister of this country when he rose to speak a few minutes ago.

Mr DALY:
Grayndler

-! wish to be associated with the sentiments expressed by all those who have spoken, and to extend to Mrs. Cahill and her family thy very deepest sympathy. I was associated with Mr “Cahill for a long time, and I feel not only that I have lost a very close friend, but also that the Labour movement and the people of New South Wales have lost a very great -man. So I -most sincerely endorse the sentiments expressed on >this occasion.

Mr COPE:
Watson

– I should also like to assoicate myself with what has been said to-day about Mr. Cahill. I thought Mr. Cahill to be one of the greatest gentlemen I have ever had the pleasure of meeting. I knew his family - his wife and his daughters and his sons - quite well, and I know that he was one of the best family men one could wish to find.

I was associated with Mr. Cahill mainly because his electorate, Cook’s River, lies within the Federal Division of Watson, which I represent in this House. I believe that not only has Australia lost a great son, but also that Mrs. Cahill and her family have lost a great husband and a great father.

page 2198

STATES GRANTS BILL 1959

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message):

Motion (by Mr. Harold Holt) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant financial assistance to the States.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Downer 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:
Treasurer · HigginsTreasurer · LP

– I move -

That the bill be now read a second time.

The House, Mr. Speaker, has just been listening to some very sincere tributes to a great Australian and expressions of regret at his passing. It is not inappropriate, perhaps, even in these melancholy circumstances, that the first major item of business which the House is called upon to deal with after those expressions of regret on the death of Mr. Cahill is one in which the late Premier of New South Wales played such a prominent part and in respect of which he made such a valuable contribution, because this measure deals with the unanimously agreed on terms arrived at earlier this year by the Australian Loan Council, of which all the Premiers are members.

I should like to place on record my own expression of regret, both as Chairman of the Loan Council and personally, at the death of Mr. Cahill, and to convey my sympathy to his family. We learned to value Mr. Cahill’s great experience, his judgment and his wisdom, and no one around the table at the recent meeting of the Loan Council played a more constructive part in our discussions than did Mr. Cahill. It gives me great pleasure to bring before the House legislation to authorize the new revenue grants arrangements which were agreed upon unanimously at the last Premiers’ Conference.

As honorable members know, there has been much controversy in the past regarding the allocation of financial resources as between the Commonwealth and the States. In an attempt to cut the Gordian knot, efforts were made in recent years to devise a satisfactory basis for reintroducing State income tax and thereby make the States responsible for raising the bulk of the moneys they spend. These efforts did not meet with success. In the meantime, other aspects of the arrangements for Commonwealth assistance, including the amount and distribution of that assistance among the States, were being questioned. Accordingly, in his election policy speech last October, the Prime Minister stated that it was proposed to convene a special Premiers’ Conference to discuss further the question of State income taxation and the whole problem of Commonwealth-State financial relations. That conference was held in March, and the discussions were continued at the annual Premiers’ Conference in June. Printed reports of the proceedings of those conferences are available to honorable members.

The discussions at the March conference covered systematically all the main aspects of Commonwealth-State financial relations. There was, in particular, further extensive discussion of the question of resumption of income taxing by the States but - and 1 say this regretfully - we came no closer to finding a practical solution to that intractable problem. Indeed, it appeared that the only feasible way of improving existing financial arrangements between the Commonwealth and the States would be to recast the system of revenue grants. The Premiers therefore agreed that the Commonwealth should examine this highly complex matter with the aim of putting precise proposals to them at the annual meeting in June.

We went into this problem in great detail and gave a lot of intensive thought to it. We also had the benefit of a number of very useful suggestions from the States, and I am glad to say that, at the June conference, the Commonwealth was able to place before the Premiers a scheme which, with only minor modifications, met with their unanimous and warm approval. This scheme is the subject of the present legislation.

Before discussing the bill in detail, I might refer to the main problems which the new arrangements are designed to solve. In the first place, it had become quite apparent that the formula in the States Grants (Tax Reimbursement) Act 1946- 1948 for determining the amount of the tax reimbursement grants each year was inadequate. As a result, annual wrangles have taken place with the States regarding the amount by which the formula grant should be supplemented each year. Our first concern, therefore, was to devise arrangements which, so far as could be foreseen, would make a reasonable contribution each year to the States’ financial resources and thereby enable them to discharge their important responsibilities without having to come, cap in hand, to the Commonwealth for additional assistance each year.

With these considerations in mind, the new arrangements provide not only for larger grants in 1959-60 than each State would otherwise have received by way of the old formula grants and the supple- mentary grants, but also for a more liberal formula for increasing the grants in subsequent years.

Secondly, it was clear that the existing distribution formula, under which the total grant has been distributed among the States in recent years on an adjusted population basis was no longer generally acceptable. This was, understandably, one of the most difficult problems to solve because it was necessary to arrive at a basis which would be appropriate not only for 1959-60, but also for subsequent years. This problem was met by agreeing upon the grant to each State for 1959-60, and by providing that each State’s grant for that year would be varied in subsequent years in proportion to the movement in its own population and by reference to the annual increase in average wages for Australia as a whole. In future, therefore, the total financial assistance grants will be an aggregation of six separately calculated grants. This constitutes a change from the existing arrangements under which a total grant for the six States combined is determined on the basis both of movements in the total population of the six States and increases in the level of average wages for Australia as a whole and then is distributed between the six States on an adjusted population basis.

Thirdly, it was necessary to determine the extent to which the basically weaker position of some States should be met outside the main revenue grant arrangements by the payment of special grants recommended by the Commonwealth Grants Commission. For many years, three States had been regular claimants before the commission, but last year two others, Victoria and Queensland, sought to enter this field. With five claimant States, the commission machinery as we have known it would have been patently unworkable, and it was clearly necessary to decide which States should have the right of access to the commission. Suggestions had also been made that the special grants recommended by the commission should be much more marginal in magnitude than they had been in recent years.

In discussing this matter with the Premiers, the Commonwealth made it clear, in the first instance, that it considered that the payment of special grants, upon the recommendation of the Commonwealth Grants Commission, should be continued. I am sure that all honorable members would wish to join me in paying tribute to the work which the commission has done over the years, and I am confident that it will continue to play a very important part in the future in safeguarding the position of the financially weaker members of the federation. So far as future arrangements are concerned, the Commonwealth suggested that the six States might be regarded as falling into three categories. The Commonwealth suggested that it was highly desirable that not more than two States, Western Australia and Tasmania, should be regular applicants for special grants. At the other extreme the two wealthiest States, New South Wales and Victoria, fall into an entirely different category and the Commonwealth suggested that those two States should not participate in any special grant arrangements. The States of Queensland and South Australia fall into an intermediate category. The Commonwealth considered that those two States should not be denied the right of access to the Commonwealth Grants Commission machinery but that the main revenue grants to those two States should be increased substantially and so enable them, in the normal course of events, to avoid applying for special grants. The conference adopted this approach and the Premiers concerned gave an undertaking that their States would not exercise the privilege of applying for special grants in future unless special or unexpected circumstances arose which endangered their budgetary position relative to that of other States.

I am sure all honorable members join with me in acknowledging the able and determined efforts of the Premier of South Australia in developing that State to the stage where it could appropriately assume the status of a non-claimant State. Sir Thomas Playford has just cause to feel proud of his achievements in this regard. I might add that the opportunity was taken to incorporate in the new revenue grants to Western Australia and Tasmania a large part of the special grants which they would otherwise have received, thus reducing the amount of the special grants to those States to marginal proportions.

Turning now to the details of the bill, it will be noted that the legislation provides for the repeal of the old tax reimbursement legislation and for the payment in the current financial year of financial assistance grants totalling £244,500,000. The amount payable last year under the tax reimbursement formula was £174,563,000 and to this was added a supplementary grant which brought the total of the tax reimbursement grants last year to £205,000,000. The new financial assistance grants proposed for 1959-60 are therefore £39,500,000 more than the tax reimbursement grants paid last year. To keep the matter in perspective, however, I hasten to point out that this increase of £39,500,000 will be offset to the extent of nearly £13,500,000 by a decline in the special grants which have now been recommended by the Commonwealth Grants Commission. The fall in the special grants reflects, of course, the fact that the financial assistance grants were designed to assist South Australia to avoid recourse to special grants and to reduce the dependence of Western Australia and Tasmania on special grants to marginal proportions. I might mention that legislation to give effect to the Commonwealth Grants Commission’s recommendations will be introduced shortly.

In effect, therefore, the present legislation, together with the special grants legislation, would authorize a net increase in general revenue grants to the States this year of about £26,000,000. In recent years, the amount paid to the States by way of tax reimbursement grants and special grants recommended by the Commonwealth Grants Commission has shown an average annual increase of about £17,000,000. It will be seen therefore, that the new arrangements will involve a substantial increase in the revenue grants to the States. Although, in the present circumstances, this increase of £26,000,000 is a heavy burden on the Commonwealth Budget, the Government considers that such an increase is necessary if the new arrangements with the States are to begin on a sound basis.

With the concurrence of honorable members I will have incorporated in “ Hansard “ the following table, which compares the financial assistance grants and special grants which would be payable in 1959-60 with the tax reimbursement and special grants paid last year: -

In future years, the financial assistance grant payable to each State is to be determined by increasing its grant for 1959-60 in accordance with a formula based on movements in population in that State and increases in the level of average wages per person employed for Australia as a whole. For purposes of the new formula, it was decided to adopt a suggestion by Tasmania that instead of using the actual increase in average wages each year an increase of 10 per cent, greater than the actual increase in average wages should be used - thus introducing what has been called a “ betterment factor “. This betterment factor will result in a somewhat greater increase in the grants in future years and it should place the States in a better position to improve the standard and range of the services they provide.

As to the distribution of the grants among the States in 1959-60, the Commonwealth put forward the view at the Premiers’ Conference that no large changes in the previous distribution of the total of the Commonwealth’s revenue assistance to the States appeared to be warranted. The Commonwealth proposed initially that the financial assistance grants for 1959-60 should amount to £242,500,000 and that this amount might be distributed among the States in 1959-60, on a basis which, for the most part, did not differ significantly from the actual distribution of the tax reimbursement and special grants in 1958-59. The Premier of New South Wales, however, pointed out that on a per capita basis, the grant to his State in 1959-60 would then be only 4s. 8d. greater than the grant to Victoria as compared with a differential of 14s. 4d. under the previous arrangements. The Premier of South Australia suggested that the proposed distribution would leave South Australia at least £1,000,000 a year worse off than it would be if it still had recourse to the Grants Commission. In this connexion, he pointed out that the 1958-59 grants - from which the proposed distribution was derived - did not include an adjusting payment of approximately £1,000,000 in respect of 1958-59 which, under the Grants Commission procedures, South Australia might reasonably expect to receive in due course. The Commonwealth met these representations by increasing the proposed grants to New South Wales and South Australia by £1,000,000 in each case, thus increasing the total financial assistance grants for 1959-60 to £244,500,000.

As I have mentioned, the grant to each State in each subsequent year will be calculated by varying its grant for the previous year in proportion to the annual movement in its own population and by increasing the result by 1.1 times the annual percentage increase, if any, in average wages for Australia as a whole. Thus, whereas the tax reimbursement legislation provided for the determination by one formula of a total amount to be paid to all States and then for the distribution by a second formula of that amount amongst the States, the total of the financial assistance grants in any year under the new arrangements will be an aggregation of six separately determined grants. In contrast with the old arrangements, the grant to each State will increase each year in direct proportion to the annual increase in its own population.

I should mention at this point the possibility that, when the next census is taken, some revision of the estimates of State populations for preceding years may be found necessary. While inter-census estimates of the Australian population as a whole can be made with a high degree of precision, the difficulties in recording interstate migration prevent the same degree of accuracy being achieved in estimates of the State-by-State distribution of that population. If the next census, which is to be taken in 1961, were to indicate that there had been appreciable discrepancies in the estimates of State populations for 1959 and 1960, it might be necessary, for pur-‘ poses of calculating the grants for 1961-62, to revise the population estimates for 1959 and 1960, and thus enable the grants for that year to be determined on the basis of a consistent series of population figures. As this particular problem was not discussed at the Premiers’ Conference and as it cannot be foreseen at this stage whether any adjustments to the population estimates consequent on the census would be large enough to affect significantly the grant to any State in 1961-62 we have not attempted to make any provision for this contingency in the legislation.

Honorable members will note that no provision is made in the bill for deduction of any arrears of State income taxation from the amounts payable to the States in any year under the new arrangements. The arrears of State taxation that are now collected are very small as it is almost two decades since the States levied their own income taxes. In any case, the general revenue grants which the Commonwealth makes to the States have long since lost their relation to the income tax proceeds the States collected in the period before uniform taxation was introduced. I might add that, as these grants can no longer be regarded as being in the nature of a tax reimbursement or a form of compensation to the States for their vacation of the income tax field, it is proposed in future to refer to these payments as financial assistance grants rather than tax reimbursement grants.

The new grant arrangements proposed in this bill are based on the assumption that the States and their authorities will continue to meet pay-roll tax and that the distribution of taxing powers as between the Commonwealth and the States will remain unaltered. In the event of any change or proposed change in respect of such matters as these, having a major effect on the finances of the States, the arrangements would be reviewed by the Commonwealth. The arrangements, will, in any case, be subject to review at any time after the lapse of six years from 1st July, 1959, should the Commonwealth or any State government so desire.

All statistical calculations under the bill are to be performed by the Commonwealth Statistician, who shall, where practicable, confer with the official statisticians of the States. As under the tax reimbursement arrangements, he will be required to perform his calculations of the grants payable in any year before 31st December of that year. The figures of population and average wages which he shall take into account within the formula are defined in the same way as under the previous arrangements except for two small technical changes. The proportion accorded to females in the determination of average wages per person employed has been increased slightly, consistent with the trends in wages of male and female employees in recent years, and members of the defence forces serving overseas are excluded from the population figures.

In conclusion, let me repeat that, in granting an increase of £26,000,000 in the revenue grants to the States in 1959-60 as compared with the amounts paid in 1958-59, the Commonwealth has placed a heavy burden on its own Budget. However, it has been prepared to do this in a determined endeavour to produce a new system of grants to the States which would bring a real and lasting improvement in CommonwealthState affairs. The large increase in the grants for 1959-60 under the new arrangements represents a very generous contribution to the resources of the States. Furthermore, in future years, these grants should increase at a rate fully in keeping with the demands which national expansion will impose on the finances of the States. As I have mentioned, these arrangements have the unanimous support of the States and the arrangements themselves were worked out in an atmosphere of mutual understanding and co-operation that augurs well for Commonwealth-State relations in the future.

Firmly believing that these new proposals constitute a sound and definite improvement in our financial arrangements with the States, I commend the bill to honorable members.

Debate (on motion by Mr. Barnard) adjourned.

page 2203

STATES GRANTS (SPECIAL ASSISTANCE) BILL 1959

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Harold Holt) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant financial assistance to the States of South Australia, Western Australia and Tasmania.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Downer 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:
Treasurer · Higgins · LP

– I move -

That the bill be now read a second time.

The purpose of this measure is to authorize the payment during 1959-60 of special grants totalling £7,299,000 to the States of South Australia, Western Australia and Tasmania. These grants have been recommended by the Commonwealth Grants Commission in its twenty-sixth report, which has already been tabled. The bill also authorizes the payment of advances to the States of Western Australia and Tasmania in the early months of 1960-61, pending the authorization by Parliament of the special grants for that year. A similar provision was included in last year’s legislation.

Before considering the Grants Commission’s recommendations for 1959-60, it is necessary to say a few words about the decisions reached at the Premiers’ Confer ence in June, 1959, as these have an important bearing on the future role of the commission. Under the arrangements agreed upon at that conference, Western Australia and Tasmania will be the only States which will continue to apply regularly for special grants. South Australia, which for a period of 30 years was a regular claimant under the Grants Commission arrangements, has now emerged to the status of a non-claimant State. It was agreed that, while South Australia and Queensland should not be denied some right of access to the Grants Commission, these two States should exercise this privilege only in special or unexpected circumstances which endangered their budgetary position relative to that of other States. The new revenue grant arrangements were also designed to bring about a substantial reduction in the size of special grants, thus making these grants more marginal in nature. With this in mind, the new financial assistance grants agreed upon for Western Australia and Tasmania were very much higher than the amounts which those States had been receiving by way of tax reimbursement grants.

Honorable members will recall that last year the States of Victoria and Queensland were seeking additional Commonwealth assistance by way of special grants. This development threatened the whole system of special grants which was designed originally to assist the financially weaker members of the federation, which were handicapped by basic difficulties. Under the new arrangements, the circumstances under which States may seek special grants have been clarified and the Grants Commission will be able to discharge its important responsibilities in the knowledge that all members of the federation are agreed as to the place which special grants should occupy in the system of Commonwealth and State financial relations.

In accordance with the arrangements decided upon at the June Premiers’ Conference, the Government of South Australia has withdrawn the application which it had previously made for a special grant in respect of 1959-60. It was agreed at the conference, however, that the commission should be asked to advise whether any adjustment should be made to the special grants which had been paid to South Australia in respect of 1957-58 and 1958-59. The amount included in the present bill as the special grant to South Australia is a final adjustment to the special grant paid to that State in respect of 1957-58. It is hoped that the commission will be able to make a further recommendation later in the current financial year concerning the adjustment to South Australia’s special grant for 1958-59.

In arriving at its recommendations for 1959-60 the commission has continued to follow the general principle of financial need as enunciated in its third report. According to this principle the special grants are designed to enable the claimant States to function at a standard not appreciably below that of the non-claimant States, provided they make comparable efforts in raising revenue and controlling expenditure. The application of this principle requires a detailed comparison of the budgets of the claimant States with those of the non- claimant States, taking particular account of differences in levels of expenditure and in efforts to raise revenue.

Under the procedures at present adopted by the commission the special grants recommended each year are composed of two parts. One part is based upon the commission’s estimate of a claimant State’s financial needs for the year in which the grant is to be paid. This part is regarded by the commission as an advance payment subject to final adjustment two years later when the commission has completed the examination of the audited budget results of the States for that year. The other part of the grant represents a final adjustment of the special grant paid two years earlier.

The special grants recommended for payment in 1959-60 and those paid in 1958-59 are compared in the following table, which, with the concurrence of honorable members, I shall incorporate in “ Hansard “:-

In total, the special grants now recommended for payment in 1959-60 are £13,451,000 less than the grants paid to the claimant States last year. Leaving South Australia aside, the special grants recommended for Western Australia and Tasmania show a reduction of £8,600,000 on the special grants paid to these States in 1958-59. Further details relating to these grants are given in the commission’s report. Although the claimant States will receive considerably smaller amounts by way of special grants in 1959-60 than in 1958-59, their total revenue grants, after taking into account the new financial assistance grants, will be substantially greater than the total of the tax reimbursement and special grants received in 1958-59.

The special grants recommended by the Commonwealth Grants Commission have been authorized by Parliament on each occasion in the past and the Government considers that the commission’s recommendations should be adopted again this year.

I commend the bill to honorable members.

Debate (on motion by Mr. Barnard) adjourned.

page 2204

RAYON YARN BOUNTY BILL (No. 2) 1959

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Osborne) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Rayon Yarn Bounty Act 1954-1956 as amended by the Rayon Yarn Bounty Act 1959.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Osborne and Mr. Downer do prepare and bring in a bill to carry out the foregoing resolution.

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

Second Reading

Mr OSBORNE:
Minister for Air · Evans · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Rayon Yarn Bounty Act 1954-1959 to extend the operation of the bounty to sales of continuous filament acetate rayon yarn up to 30th June, 1962. The original act followed a recommendation of the Tariff Board and authorized payments of bounty on rayon yarn produced and sold for delivery in Australia in the three years from 1st November, 1954, to 31st October, 1957. The rate of bounty was prescribed as 6d. per lb. of yarn with a maximum amount payable in any one year of £100,000. A profit limitation was also provided of 10 per cent, per annum on the capital employed in the production and sale of the rayon yarn.

Following on a further report by the Tariff Board on the industry in November 1955, the act was amended to extend the operation of the bounty to sales of rayon yarn up to 30th June, 1959. At this time provision was also made, in the Cellulose Acetate Flake Bounty Act 1956, for the payment of bounty of lOd. per lb. on cellulose acetate flake produced in Australia for use in the manufacture of cellulose acetate rayon yarn. The maximum amount of such bounty that can be paid is £142,000 per annum.

In May last, the Rayon Yarn Bounty Act was amended, pending consideration of a further Tariff Board report, to permit of the extension of the bounty, by proclamation, to cover sales of rayon yarn up to 31st December, 1959. The relative proclamation has been gazetted. The Tariff Board report on artificial silk yarns, other than staple fibre yarns, of 4th May, 1959, was tabled earlier this session. When submitting relative tariff proposals, I announced that the Government had accepted the board’s recommendation for the extension of the rayon yarn bounty to sales of yarn up to 30th June, 1962.

Courtaulds (Australia) Limited has been the only applicant for bounty. The company manufactures the yarn at Tomago in New South Wales from cellulose acetate flake proposed by C.S.R. Chemicals Proprietary Limited, also in New South Wales. Courtaulds (Australia) Limited has been eligible for bounty payments in respect of yarn sold during the year ended 31st October, 1955, of £39,159; during the year ended 31st October, 1956, of £56,364; during the year ended 31st October, 1957, of £73,929; during the year ended 31st October, 1958, of £63,895; and during the nine months ended 31st July, 1959, of £54,552.

Bounty payments have been made to C.S.R. Chemicals Proprietary Limited on sales of cellulose acetate to Courtaulds (Australia) Limited in the year ended 30th June, 1956, of £99,489; in the year ended 30th June, 1957, of £113,258; in the year ended 30th June, 1958, of £100,981; and in the year ended 30th June, 1959, of £124,286.

The question of further assistance to the industry will be again examined by the Tariff Board before the expiry of the bounty. I commend the bill to honorable members. It merely extends the period of bounty without any change in the rate of bounty of 6d. per lb. of yarn sold, or in the provisions relating to payment.

Debate (on motion by Mr. Calwell) adjourned.

page 2205

LOAN (SHORT-TERM BORROWINGS) BILL 1959

Motion (by Mr. Harold Holt) agreed to -

That leave be given to bring in a bill for an act to authorize the borrowing of money by the

Commonwealth for short periods and the expending of the money so borrowed.

Bill presented, and read a first time.

Second Reading

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– by leave - I move -

That the bill be now read a second time.

Honorable members will recall that, in my recent Budget speech, I announced the intention of the Government to issue a new form of Commonwealth security, to be called seasonal treasury-notes, with the object of reducing the large seasonal fluctuations which occur each year in the liquid assets of the banks and the public. This bill seeks authority from the Parliament for the proposed borrowings.

There are several causes which combine to produce the marked changes that occur from one season of the year to another in both public and bank holdings of liquid assets. One is to be found in temporary borrowings by the Commonwealth from the central bank to finance Government spending during those months of the financial year when revenue lags behind expenditure. Another arises from the seasonal flow of export proceeds; and a third is related to the advances to growers which are financed through the Rural Credits Department of the Commonwealth Bank in anticipation of the sale of wheat and other commodities. Normally the combined result of these transactions is a rise in liquidity to a peak during the March quarter of each year, followed by a sharp fall in the ensuing three months.

A few figures will serve to illustrate the changes which occur in holdings of liquid assets and Government securities by the major trading banks. Between June, 1958, and March, 1959, there was an increase in these holdings of £164,000,000, and this was followed by a decrease of £93,000,000 between March and June. In the previous year, the increase between June and March was £119,000,000 and, even though substantial releases from the special account were made during the June quarter, there was a decrease in that quarter of £124,000,000.

These wide variations in liquidity present uncertainties to the banking system in its management of funds, cause disturbances in the flow of funds in the capital market and, in this and other ways, tend to impede the efficient operation of credit policy. For some years, measures such as calls to, or releases from, special account have helped to reduce the magnitude of the seasonal swings in bank liquidity, but these measuresare employed primarily to serve general credit policy objectives and to smooth out: long-term rather than purely seasonal variations. In any case, special account action does not directly affect any increase in public, as distinct from bank, liquidity which has already occurred.

We believe that action to reduce the seasonal up-swing and subsequent decline in liquidity would make a useful contribution to the working of our financial system. After examining various alternatives, we came to the conclusion that the most suitable form of action would be the public issue of very short term Commonwealth securities which would be made available during the period when liquidity was rising seasonally, and be redeemed within the same financial year as liquidity diminished.

Subscriptions to the new securities will withdraw funds temporarily from the public and hence from the banking system. Although subscriptions by the trading banks would have little significant effect on their liquidity or, directly, on the liquidity of the public, we do not propose to prohibit entirely subscriptions by the banks. At the same time, we do not intend that the banks should have unrestricted access to the securities. The amount of notes available to the trading banks will be kept within limits which are reasonable having regard to the amounts subscribed by the public. To the extent that the notes are taken up by the public, these will be largely financed by withdrawals from bank deposits, and the funds available to the banks for shortterm investments will, of course, be reduced.

The seasonal treasury-notes which are to be issued will be freely negotiable bearer securities. As with Commonwealth bonds already on issue, there will be facilities for lodging the notes for safe custody with a trading bank or savings bank. However, to suit the convenience of subscribers who would prefer to have their investments in the form of inscribed stock, investors will have a choice of either seasonal treasurynotes or seasonal inscribed stock. These will1 be issued on the same general terms and conditions and will be freely interchangeable, and’ in my following remarks my references to seasonal treasury-notes will apply equally to seasonal inscribed stock.

Under clause 8 of the bill-, the overall amount of seasonal- treasury-notes to be issued in any one year will be determined by the Governor-General in Council. Clause 11 empowers the Treasurer to determine, within this overall limit, the amount and the- prices, terms and other conditions of each individual issue. However, this discretion is limited by sub-clause 12 (b), which provides that all such seasonal securities must mature before the end of the financial year in which they are issued. It is proposed that issues of seasonal treasury-notes will have a currency of approximately three months. Should’ it prove desirable in the future te issue seasonal! treasury-notes with ai currency other than three months, the bill will provide the necessary authority, subject, of course, to’ the requirement that the notes must mature in the same year in which they are issued. However, as I shall mention later, the terms and conditions of the notes are subject to consultation with the Australian Loan Council, and the present Loan Council approval is such that the 1959-60 issue of seasonal treasurynotes is to be on a three-month basis, with all securities maturing before the end of June, 1960.

Issues of the notes will be made this year on a fortnightly basis. Applications will be called for on dates to be announced. Allotments will be made a few days afterwards, and cash subscriptions will be payable in full on the date of issue, on the basis of the allotment decided by the Treasurer.

The notes will be issued at a discount and will be repayable at par on maturity. They will not bear any separate interest as such, but any earnings from holdings of the notes will be taxable, whether these earnings are by virtue of an initial subscription to the notes being held to maturity, or by virtue of purchases and sales on the market. I shall shortly introduce separate legislation which will include provision to make these earnings fully taxable, but eligible for the 2s. in the £1 taxation rebate applicable to interest on Commonwealth securities under section 160ab- of the Income Tax and Social Services Contribution Assessment Act.

Under clause 11 of the bill, the Treasurer will be empowered to fix maximum and minimum subscriptions to the notes. Clause 5 also empowers him, at his discretion, to limit or reject subscriptions from any subscriber or class of subscriber. It is intended that, at least initially, the minimum subscription will be £5,000, and that additional amounts may be subscribed in multiples of £1,000. The minimum subscription has been set at a level designed to avoid disturbance- of established channels for small savings and to make the scheme manageable. The amount of £5,000 is actually the same as the maximum permissible holdings of special bonds, which are, of course, primarily designed to cater for the requirements of small investors. Within the present pattern of interest rates, special bonds carry rates of interest ranging, from 4 to 5 per cent., which are considerably greater than the yield at which the seasonal treasury-notes are likely to be offered. The rate offered on the notes might normally be expected to be closer to the rate which other marketable Commonwealth securities would yield with approximately the same period to run before maturity.

Holders of the new notes will be entitled to repayment of their investment at par on maturity. In addition, although it is not intended to apply for listing of the securities on the stock exchange, it is expected that a> ready market will develop for the notes, amd! that holders wishing to encash their investments before maturity will be able to do so fairly easily through that market. Moreover, the Commonwealth Bank will, until further notice, stand ready to purchase the notes on a re-discount basis, the precise terms and conditions of which will be determined from time to time. Investments in the notes will therefore have the facility of being readily cashable at any time.

As borrowings by the Commonwealth in accordance with the provisions of this bill will be for purposes other than defence, the issue of seasonal treasury-notes is subject to the provisions of the Financial Agreement between the Commonwealth and the States. As I have said, the securities will all mature within the financial year in which they are issued. They will accordingly come within the category of Commonwealth borrowings for temporary purposes, which are covered by the provisions of clause 6 of the Financial Agreement. Under this clause, the terms and conditions of the notes will be subject to any maximum limits decided upon by the Loan Council from time to time with regard to interest, brokerage, discount and other charges. The Commonwealth therefore took the opportunity at the last meeting of the Loan Council to discuss this borrowing proposal with the States, and received an appropriate approval in principle. The precise terms of the first issue of the notes will depend on market conditions then ruling and, as chairman of the Loan Council, I shall again consult with the State Premiers before finally giving my approval to the actual terms and conditions. These terms and conditions, together with the opening date of the first issue, will be announced as soon as possible after the passage of this legislation.

The proceeds of the borrowing will be credited to Loan Fund, and clause 6 of the bill defines how these proceeds may be used. They will be available to the Commonwealth only, and will thus not form part of amounts borrowed on behalf of the States to finance their approved works and housing programmes. Subscriptions to the notes will reduce the amount of temporary finance which the Commonwealth would otherwise have to obtain by the issue of treasury-bills to the central bank.

Borrowings under this bill will, by placing the Loan Fund in credit, enable the Loan (Temporary Revenue Deficits) Act 1953 to operate with a smaller issue of treasurybills than would otherwise be necessary. One of the provisions of that act authorizes the Treasurer to expend moneys in the Loan Fund for the purposes of any appropriation out of the Consolidated Revenue Fund, whenever the receipts of the Consolidated Revenue Fund are insufficient to meet expenditure from that fund. Any amounts so expended from Loan Fund must be reimbursed by the Consolidated Revenue Fund before the end of the financial year. Moneys borrowed under the present bill will be used primarily to meet temporary revenue deficits of the type I have just mentioned, or to redeem seasonal treasurynotes issued earlier in the year; but clause 6 of the bill will make it possible for the proceeds of the seasonal borrowings also to be applied in appropriate circumstances to the redempton of treasury-bills.

Repayment of the notes on maturity will be met mainly from the moneys which, under the Loan (Temporary Revenue Deficits) Act, are repayable from the Consolidated Revenue Fund to the Loan Fund before the end of the financial year. However, repayments of the notes may also be financed from the proceeds of new issues of the notes or from the issue of treasurybills.

These arrangements may appear somewhat complex, but their effect on the Government’s finances will merely be to substitute temporary borrowings from the public for borrowings from the central bank, during the periods when revenue is lagging, and to repay these borrowings as the lag in revenue is overtaken. At the end of each financial year, there will be no seasonal treasury-notes outstanding, and the amount of treasury-bills outstanding will be precisely the same as if there had been no issue of seasonal treasury-notes. The effect which the new notes will have on the Government’s finances will thus be entirely of a seasonal nature, and will be limited to the financial year in which they are issued.

I may add that no change is contemplated in the present arrangements for the issue of treasury-bills, whether these are issued on behalf of the Commonwealth or of a State government. The interest rate on these treasury-bills, and the so-called “ internal “ treasury-bills in which part of the Commonwealth’s Trust Fund balances is invested, has remained at 1 per cent, since 1952.

As I have said, the securities will be issued in the form of both bearer securities and inscribed stock, and it is desired that facilities provided for other Commonwealth securities under the Commonwealth Inscribed Stock Act should be available to subscribers to seasonal inscribed stock. Clause 17 therefore incorporates the relevant sections of the Commonwealth Inscribed Stock Act, .which lay down the machinery for inscription and transfer of stock, and the various legal provisions relating to inscribed stock.

Certain sections of the Treasury Bills Act 1914-1940 contain legal provisions relating to treasury bonds, mainly in relation to forging, copying and defacing bonds and, as it is necessary to have similar restrictions on the misuse of seasonal treasury-notes, these provisions are incorporated in the present bill by means of clause 18.

Under clause 23 there will be a power of regulation available. Regulations will soon be promulgated to cover the form of the securities to be issued and various other matters relating to issues of, and dealings in, seasonal treasury-notes and seasonal inscribed stock. Where practicable, the regulations under the Commonwealth Inscribed Stock Act will be made to apply as they stand to seasonal treasury-notes and seasonal inscribed stock. Some inscribed stock regulations will be applied to the seasonal securities with minor modifications made necessary, for example, because of the new names being given to the securities; but in a few cases where the nature of the new securities makes the inscribed stock regulations inappropriate, new regulations will be issued under the authority of this bill. These will nevertheless have the same general features as the inscribed stock regulations themselves.

I believe that the new seasonal treasurynotes will facilitate the smooth working of our monetary system. At the same time they will serve as a convenient short-term, gilt-edged security for members of the public, both individuals and institutions, and I hope that a wide range of investors will subscribe to them.

I commend the bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 2209

NATIONALITY AND CITIZENSHIP BILL 1959

Motion (by Mr. Downer) agreed to -

That leave be given to bring in a bill for an act to amend the Nationality and Citizenship Act 1948-1958.

Bill presented, and read a first time.

Second Reading

Mr DOWNER:
Minister for Immigration · Angas · LP

– by leave - I move -

That the bill be now read a second time.

This is a group of amendments to the Nationality and Citizenship Act springing from the operation of the law during the past year. It is essentially a machinery measure, containing no great changes in policy. At first glance, honorable members may find the bill a little difficult to comprehend, but after elucidation I hope they will agree that it seeks to attain its purposes in the most convenient form.

Briefly, the bill is designed to do six things. First, Singapore, by reason of its recently enhanced constitutional status, is added to the list of countries in section 7 of the parent act whose citizens are British subjects or Commonwealth citizens. Secondly, we remove an obstacle in the way of some Australians living abroad to having the births of their children registered at Australian consulates, and so enable these children to become Australian citizens by descent. Thirdly, the Government in its desire to increase the volume of naturalizations, proposes to eliminate the statutory waiting period of six months after a person, fully qualified, applies for a certificate of naturalization. Fourthly, the bill abolishes the present practice of keeping duplicate copies of all certificates of registration and naturalization. This will effect economies in administration, as will become increasingly evident with the steady progression in the numbers of those acquiring Australian citizenship. Fifthly, we remove the unqualified right of the public to inspect the indexes of persons naturalized. Instead we propose that any person may apply for restricted information, but this will be much more comprehensive in cases of naturalized subjects seeking information about themselves, or if the information is needed for legal proceedings. Finally, we seek to give greater accuracy to the annual statistical return, which I am required to place before Parliament, of the numbers of those who become Australian citizens every year.

I shall now say something about each of these proposals in turn. Clause 3 concerns the accession of Singapore as a separate member of the British Commonwealth of Nations. I need hardly remind the House that this famous island, whose territorial integrity Australian troops fought so valiantly to preserve in the Second World War, and with whom we have so many happier associations, ceased on 3rd June, 1959, to be a colony of the United Kingdom by an act of the British Parliament. By the same act, the new State was included in the list of Commonwealth countries whose citizens are British subjects under the law of the United Kingdom. The enactment of corresponding legislation by each Commonwealth nation is expected to follow, in accordance with the practice whereby every Commonwealth country recognizes the nationals of other members as being linked together by the common national status of British subject or Commonwealth citizen. In Australia, the Government has already acted by regulation, but we prefer to embody this in clause 3 of the bill so as to give Singapore the same legislative conformity as we have accorded to other Commonwealth nations. If the House agrees to this, the regulation, made earlier only for the sake of swift recognition, will, of course, lapse.

The next objective of the bill is to enable all Australians living abroad to register the births of their children at Australian consulates, and so clothe their offspring with the status of Australian citizens by descent. At the present time, section 1 1 (2) of the principal act prohibits the registration of a child’s birth when all the following circumstances exist: - The Australian father is not ordinarily resident in Australia at the time of the birth; the birth takes place in a British Commonwealth country; and the child becomes at birth a citizen of the country of birth, and therefore a British subject under our law. This last-named impediment is fairly widespread, as the laws of all Commonwealth countries, except India and Ceylon, confer citizenship upon persons born in their territory.

This provision is unsatisfactory for two reasons. First, it is often extremely difficult to say whether or not the Australian father is ordinarily resident in Australia. Often, cases arise where Australians have for years been working in Commonwealth countries, for example in Malaya and Singapore, without actually maintaining a home here, but also without abandoning all intention of returning here when their employment ends. It then becomes impossible to decide with certainty, and with assured justice to the parties, whether the father is, in the language, of the statute, “ ordinarily resident in Australia “, and our consulates are continually being faced with such insoluble questions.

The second cause for dissatisfaction with section 11 (2) of the act is that it creates anomalies, arising from the fact that Australians settled in foreign countries can readily secure Australian citizenship for their children born in those countries, whereas if they should have children born to them in a British country the children may be debarred from registration. It is not always adequate consolation to the parents, in the latter cases, that their children have become citizens of another Commonwealth country, and British subjects but not Australians. Clause 4 (1) therefore proposes to repeal section 1 1 (2) of the principal act so that all Australians, whether resident in British or in foreign countries, may register the births of their children at our consulates and so secure Australian citizenship for them.

Our third proposal in this bill relates to naturalization. Honorable members may recall that section 15 (5) of the principal act declares that except in special circumstances a certificate of naturalization shall not be granted until six months after the date of application. This has meant, in practice, that many applications have been held in suspense for long weeks following completion of the department’s inquiries and other action. It is true, of course, that large numbers of settlers desiring to be naturalized apply before the completion of the five-year period. But many do not, as is shown by the 165,000 adults in Australia to-day who are qualified by residence for this privilege, but who have made no move towards acquiring it. As the law now stands, they would still be compelled to wait six months after applying for naturalization, even though some might have lived in Australia for eight, twelve, or twenty years. Such a restriction is no longer tenable, however justifiable it might have been in the different circumstances of earlier times. Clause 5 of the bill, therefore, deletes section 15 (5). If this is acceptable to the House, certificates of naturalization can in future be granted within only a few weeks after applications are received.

I now turn to what I hope honorable members will agree will prove an economical administrative reform. This is the abolition of the practice of keeping a duplicate copy of every certificate of registration and naturalization. Doubtless the system has been efficacious, but it began when naturalizations amounted to merely a few hundreds a year. In the last two years, with people becoming naturalized at the rate of 48,000 a year, the clerical effort of making these duplicates has been considerable. It will obviously become greater as the spate of naturalizations swells. There is also the problem of storage space. Looking to the future, these are circumstances which call for new methods, and we therefore propose in place of large duplicates a system of small index cards containing essential particulars of each certificate issued.

This will involve amendments to sections 42, 46 and 47 of the principal act. Section 42 (a) as it now stands obliges me to see that duplicates are kept. Section 46 (3) declares that a certificate may be proved in legal proceedings by producing an officially certified copy. So long as this remains the law my department will continue to receive requests for certified copies which can only be issued if duplicates are made of all certificates at the time of issue. Section 47 (2) refers to the notation of duplicate certificates when originals are amended.

Accordingly, clause 6 (a) of the bill in effect repeals paragraph (a) of section 42. Clause 8 repeals section 46 (3). Clause 9 proposes the insertion of a new section, 46a., which, as the House will see, is lengthy, but, I hope, nonetheless clear in its intent. In place of a certified copy of a duplicate certificate, there is substituted a document termed an evidentiary certificate. This will be available to a person requiring evidence of his own naturalization or that of another. It will be compiled from the small index cards kept by my department, and will supply all information necessary.

Clause 10 in effect deletes from section 47 (2) the reference to notations on copies of certificates.

The fifth object of this bill is to take away the unrestricted right of any individual to inspect the indexes and make copies of certificates of persons naturalized. I hope no one will misinterpret this as an attempted infringement of the liberty of the subject. The Government’s desire is, in fact, the opposite - to protect our many thousands of naturalized Australians who have found sanctuary and success here from the prying eyes of those who might wish to harm their relatives still resident in countries under totalitarian rule. I think honorable members will appreciate this point without my having to labour it. The enactment of this amendment, embodied in clause 9 in the proposed new section 46a, will help safeguard the freedom of many of our new citizens and will, I am sure, be very acceptable to them.

But whilst we are seeking to withdraw an individual’s right to inspect indexes, the bill provides in clause 9 a right for any one to secure an evidentiary certificate relating to any person’s acquisition of Australian citizenship, stating names, date of acquisition, and former nationality. In other words, the public will still be able to acquire basic information about those naturalized, but not addresses or other information which could be used injuriously. Furthermore, clause 9 provides, in proposed section 46a (5), that ampler information can be made available when the person seeking the certificate is the person of whose citizenship evidence is desired, or when legal proceedings are involved, or when other special circumstances exist.

The last amendment in this bill concerns the nature of the annual statistical return which I am required by section 42 (d) of the principal act to present to Parliament. We seek to sharpen its accuracy. At present, as honorable members know, the Minister must make a return of certificates of registration and naturalization which have been granted. The weakness here is that certificates of naturalization do not confer citizenship upon persons over sixteen years of age solely by being granted. The applicant must also take the oath of allegiance to the Sovereign. It often happens that certificates properly granted do not become effective because the applicants fail to take the oath. Sometimes they do not turn up for the ceremony; occasionally they leave the country for an undetermined time; there is always the inevitable contingency of death. Clause 6 (b), if approved, should correct this inaccuracy by providing that the return must indicate, not the number of certificates granted, but the number of persons who have become Australian citizens during the year.

Mr. Deputy Speaker, I regret having taken longer than is the rule in trying to explain a comparatively small measure, but I have done so deliberately in order that honorable members may realize as nearly as possible the Government’s intentions in these respects. I trust the House will agree with me that these amendments should strengthen our nationality law. If adopted, they will certainly fulfil the national desire of Australians living abroad, hasten the process of naturalization, introduce administrative economies, safeguard the position of migrants from iron curtain countries, and give more exactitude to naturalization statistics. I hope, therefore, that honorable members will sanction their passage.

Debate (on motion by Mr. Haylen) adjourned.

page 2212

NATIONAL HEALTH BILL 1959

Motion (by Dr. Donald Cameron) agreed to -

That leave be given to bring in a bill for an act to amend the National Health Act 1953- 1958.

page 2212

THERAPEUTIC SUBSTANCES BILL 1959

Motion (by Dr. Donald Cameron) agreed to -

That leave be given to bring in a bill for an act to amend the Therapeutic Substances Act 1953.

page 2212

QUESTION

SUPPLY. (GRIEVANCE DAY.)

Mr SPEAKER (Hon John McLeay:

Order! As it is now past the time provided for Grievance Day, Order of the Day No. I will not be called on. The Committee of Supply will be set down for the next sitting.

page 2212

TARIFF PROPOSALS 1959

Customs Tariff Amendment (No. 4)

In Committee of Ways and Means: Consideration resumed from 13th May (vide page 2116, vol. H. of R. 23), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933- 1959 be amended as set out in the Schedule to these Proposals . . . (vide page 2113, vol. H. of I’. 23).

Customs Tariff Amendment (No. 6)

Consideration resumed from 13th May (vide page 2116, vol. H. of R. 23), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933- 1959 be amended as set out in the Schedule to these Proposals . . . (vide page 2115, vol. H. of R. 23).

Customs Tariff Amendment (No. 7)

Consideration resumed from 11th August (vide page 88), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933- 1959, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of May . . (vide page 85).

Customs Tariff Amendment (No. 8)

Consideration resumed from 8th October (vide page 1952), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933- 1959, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1950).

Excise Tariff Amendment (No. 3)

Consideration resumed from 1st September (vide page 731), on motion by Mr. Osborne -

That the Schedule to the Excise Tariff 1921- 1959, as proposed to be amended by Excise Tariff Proposals introduced into the House of Representatives on the thirteenth day of May . . . (vide page 731).

Excise Tariff Amendment (No. 4)

Consideration resumed from 8th October (vide page 1952), on motion by Mr. Osborne -

  1. That the Schedule to the Excise Tariff 1921- 1959, as proposed to be amended by Excise Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1950).

Motions - by leave - taken together.

Mr OSBORNE:
Minister for Air · Evans · LP

– The matters before the committee are tariff changes brought into effect by four Customs Tariff Proposals and two Excise Tariff Proposals tabled in this committee between 13th May last and 8th October. These proposals are now being debated in the Committee of Ways and Means prior to enactment by the Parliament.

The first two of the Customs Tariff Proposals, Nos. 4 and 6, were tabled on 13th May and dealt with silk piece goods, bathing hats and caps, towels and towelling, pattern makers’ chisels and wool tops. The next alteration was Customs Tariff Proposals No. 7, tabled as part of the Budget, on 11th August, which dealt with petroleum products. Honorable members will recall that the significant change involved was a reduction of id. per gallon in the customs duty on petrol. A complementary drafting amendment to the Excise Tariff was introduced on 8th October, described as Excise Tariff Proposals No. 4.

The last of the Customs Tariff Proposals, No. 8, now before the committee, was tabled on 8th October, and dealt with cotton sheeting, fluorescent lamps, phenothiazine, man-made fibre yarns and clothes pegs.

The only remaining proposal before the committee is Excise Tariff Proposal No. 3, to reduce the excise duty on coal by 3d. per ton. As honorable members will recall, long service leave for coal-miners is financed, in part, from this source.

All Tariff Board reports associated with these changes have been tabled in this chamber.

Mr POLLARD:
Lalor

.- As stated by the Minister, the majority of these proposals have been before the committee for consideration for a considerable time, and ample opportunity has been afforded honorable members, except in relation to the last proposal, to consider their merits. It is quite apparent that the proposals are, in the main, in line with the recommendations of the Tariff Board. In the opinion of the Australian public, the Tariff Board has long rendered a special service to this country.

I should like to make only a brief comment on some of the present proposals.

I should like to refer, first, to Customs Tariff Proposals Nos. 4 and 6, dealing with silk piece goods, bathing hats and caps, towels and towelling, pattern makers’ chisels and wool tops. It is obvious that in these instances the tariff proposals, particularly in regard to piece goods and clothing, arise from the fact that, because of the Japanese Trade Agreement, local manufacturers have been hard put to compete with Japanese products, and so some additional protection is to be accorded to them.

Now we come to Customs Tariff Amendment (No. 7), which concerns a reduction of id. per gallon on the customs duty on petrol. I admit that it is some time since we had the Tariff Board’s report on this proposal, and all I am prepared to say about it at the moment is that the revelations contained in the board’s report regarding the petrol-refining instrumentalities do not redound to the credit of the refining industry in this country. It is obvious that the industry was rather reticent about revealing the full story of its actual financial position, and I think that it was as a result of reservations in its mind that the Tariff Board did not recommend a greater reduction than that already recommended. It is true that the reduction of id. per gallon is to be passed on to the public, as well it might be. The honorable member for Fawkner (Mr. Howson) interjects something about the coal industry. I am dealing, not with the coal industry, but with the ramifications of the petrol-refining industry and of the oil companies which conduct it. It is obvious that further consideration at a later date will probably result in a recommendation for a greater reduction in the duty on petrol, and the community is entitled to the benefit of that reduction.

Oil refineries in Australia are very intimately connected with the petroleum interests in various parts of the world which also either own or control the tankers that bring petroleum products to Australia. They are in the position at one end of the trans-action to recoup a loss made at the other end of the transaction. However, the Opposition offers no objection to this particular proposal.

Then we have the last proposal - Customs Tariff Amendment (No. 8), tabled on 8th October and concerned with cotton sheeting, fluorescent lamps, phenothiazine, man-made fibre yarns and clothes pegs-. I desire to say a few words about phenothiazine, which is a chemical preparation that farmers administer to sheep. I have done a little of that myself. The availability of that product is of very great importance to the primary industries. I note in the Tariff Board’s report the justification given for the reduction of the duty on this particular product, and I also note that agood deal of the manufacturing work in connexion with that product is carried on in Australia. However, we are apparently still dependent on external sources for the basic, materials from- which the product is prepared, and it is all to the good that the board has seen fit to recommend that, this preparation become available to primary producers- much more cheaply than would otherwise be the case.

It is a notorious fact that as science discovers ways and means of increasing the stock-carrying capacity of land the need for preparations for destroying internal parasites in sheep becomes greater. It is to Be hoped that the people who make this preparation will be able, as time goes on, to make it even more effective than at present. Chemical’ research work performed by the Commonwealth Scientific and Industrial Research Organization in particular, and by State departments of agriculture and by private enterprise, have made available a vast range of products which- are substantially helping the Australian primary producer. f may be straying a little from the subject matter’ before the committee, but f just mention that the Commonwealth Serum Laboratories- have prepared a substance which is used to inoculate’ ewes. Lambs are now being prepared for the fat lamb market free of the scourge known as pulpy kidney, which results from grazing on lush pastures.

I proceed now to the proposal to reduce excise duty on coal by 3d. a ton. The Opposition offers no objection to that proposal. After allowing for that reduction, sufficient remains to finance long service leave for coal-miners. With those few remarks I intimate that the Opposition does not oppose the measure.

Mr FORBES:
Barker

.- 1 take this opportunity to refer briefly to a matter that was mentioned by the honorable member for Lalor (Mr. Pollard) - the reduction of duty on phenothiazine. This matter is worthy of comment for two reasons. These days we rarely see a Tariff Board report tabled in the Parliament in which a reduction instead of an increase is recommended. From many points of view it is extremely refreshing to find that the board has interpreted its responsibilities in such a way in this case as to propose a reduction in duty. But even more important, I believe, is the reason which the Tariff Board gives principally for the reduction of the duty on phenothiazine. In its report the board said-

The Board was conscious that in assessing the level of assistance for the industry it could not overlook the importance of not adding unnecessarily to the cost of Australia’s most important export industry’.

That is, the wool industry -

In its previous report the- Board stated- that, prices of phenothiazine were capable of reduction. It is’ still of this opinion. Further, it. considers that the level of- existing- duties is no. longer required and should be reduced.

In- other words, the board- specifically said that in its- determination of the level of tariff assistance it has an obligation to ensure that costs fo’ the export industry are kept down. Unfortunately, the’ board makes comments of that sort all too rarely in its annual’ reports. It was an obvious comment to make in this case because this was a product that was used exclusively in a primary industry. I do not think that the board takes into account often enough the effect on primary industry of the tariff levels fixed by this Parliament on the recommendation of the board for many products that are not as directly related to the primary industries but’ nevertheless bear most importantly on their costs.

It is important that the Tariff Board should review existing tariffs. That is not done often enough. Recently I asked the Minister for Trade (Mr. McEwen) a series of questions from which I elicited the information that the change in structure of the Tariff Board, undertaken a year or so ago in order to speed up its work, had in fact resulted in a speeding up of its work arid a reduction iri the back-log of demands for tariff hearing’s. But the Minister also said that the board had not yet reached the stage where it could on reference readily undertake the work of reviewing tariff levels already fixed. I believe it is vital that we reach that point as quickly as possible, because, after all, many of the tariffs granted to industries are given explicitly by the board under the argument of assisting infant industries. In other words, you assist an industry in its early stages to overcome the difficulties that are associated with establishing itself in the community. But it was never intended under the infant industries argument that an industry, after being established, should require the same assistance for the rest of time. That, in effect, is what has happened in many Australian industries, not through any desire on the part of the Tariff Board to leave that situation as it is but because the board has not had the time or the opportunity to review tariffs that were fixed on industries when they were first being set up.

Export industries pay a good deal of attention to this matter for the very good reason that the tariff virtually is a governmentcreated subsidy for Australian manufacturers. I am not quarrelling with that. I approve entirely of the policy of diversification of industrial development that is going on in this country. I think tariff protection is an inseparable part of that development programme, but we must bear in mind the effect of the steps that must be taken in the light of our development on our export industries with regard to costs.

The primary industries are helpless in the face of demands for a guaranteed return, not only through the Tariff Board, but also through freight rates, awards of arbitration courts and industrial tribunals, and so on. The argument put forward by a manufacturer when he goes to the Tariff Board is that he is entitled to a guaranteed return if he can operate efficiently. It has been said before in this Parliament that when an industry goes to the Tariff Board it expects as its right a guaranteed return on its capital of 10 per cent, or 12 per cent. Industries use that argument, and the Tariff Board has largely accepted it. The same applies to the overseas shipping companies when they seek an increase in freight rates. The same applies in a different way to the wageearner when he goes to the Arbitration Court. The same applies to public servants when they go to tribunals seeking in creases in salaries. The only section of the community that does not control its rate of remuneration in one way or another is the primary-producing section. It seems to me ironical that the cost-price squeeze that is going on slowly but surely in the primary industries should be caused partly by the demand of another section of the community for a guaranteed return. The manufacturers ensure for themselves a guaranteed return for their effort, for the use of their capital and so on. But this makes it impossible for many people engaged in primary production to obtain for themselves a guaranteed return.

I am delighted to see that the Tariff Board in this instance - a small start but nevertheless a significant one - has realized the effect that its deliberations have on primary industries. I hope that it will try to speed up its work so that reviews such as that undertaken with phenothiazine can be made in many other industries and the same reductions, where they are found to be warranted, applied with the consequent effect on the cost of goods produced for export.

Questions resolved in the affirmative.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Ordered -

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

page 2215

CUSTOMS TARIFF BILL (No. 3) 1959

Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 2215

CUSTOMS TARIFF BILL (No. 4) 1959

Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 2215

CUSTOMS TARIFF BILL (No. 5) 1959

Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 2215

EXCISE TARIFF BILL (No. 2) 1959

Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 2216

EXCISE TARIFF BILL (No. 3) 1959

Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 2216

PRINTING COMMITTEE

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– As chairman, I present the third report of the Printing Committee.

Report read by the Clerk, and - by leave - adopted.

page 2216

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1959

In Committee of Ways and Means: Consideration resumed from 24th September (vide page 1372), on motion by Mr. Menzies -

– (1.) That, in this Resolution . . . (vide page 1368).

Mr CREAN:
Melbourne Ports

Mr. Temporary Chairman, at this stage, I wish to indicate on behalf of the Opposition that we do not propose to oppose this motion, but we do propose to ask the House to decline to give a second reading to the bill which will be founded on the resolution arising out of this motion. We are taking this course because of the operation of paragraph 6 of this motion, which deals with the flat-rate reduction of income tax. That paragraph reads -

That a person liable to pay income tax and social services contribution ascertained by reference to paragraph four or five of this Resolution be entitled in his assessment to a rebate of an amount equal to one-twentieth of the amount of income tax and social services contribution which he would, but for this paragraph, be liable to pay under the preceding provisions of this Resolution, before deducting any other rebate or any credit to which he is entitled.

We regard this method of implementing tax reductions as unjust, and therefore, as I have said, when the bill reaches the second-reading stage, we propose to move an amendment to the motion for the second reading of the bill.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. McMahon and Mr. Harold Holt do prepare and bring in a bill to carry out the foregoing resolution.

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

Second Reading

Motion (by Mr. McMahon) proposed -

That the bill be now read a second time.

Mr CREAN:
Melbourne Ports

Mr. Deputy Speaker, on behalf of the Opposition, I move -

That all words after “ That “ be omitted with a view to inserting the following words in place thereof: - “ this House declines to give a second reading to the bill as, although it provides for a five per cent, reduction of taxation, it does so on an inequitable flat rate basis which fails to extend an adequate share of the reduction to the lower income groups”.

Mr Pollard:

– I second the amendment.

Mr CREAN:

– In moving this amendment, the Opposition repeats objections that were raised during the Budget debate when it was pointed out that this flat rate reduction of taxation gives very little benefit to the majority of the community most deserving of relief from taxation. Such benefit as it does bestow is shared by a very small section of the community. I propose to illustrate the effect of this type of reduction at a later stage by reference to the statistics published by the Commissioner of Taxation in his latest report, the 37th report.

I think it ought to be said at the outset that this bill sets the rate of income tax applicable for the next twelve months to individuals and to companies on the residue of their income after all allowances under the act have been availed of. Last night we debated the principles of assessment whereby individuals and companies determine their assessable income. To-day we are discussing, as I have indicated, rates of tax, both for individuals and companies.

In a very real sense, it is impossible to sever the question of rates from the principles of assessment because, I repeat, the rates are applied to the residue of income after the various deductions allowable under the provisions of the act have been made. Individuals can claim for a dependent wife and children, for medical expenses, for educational expenses, and for life assurance. Items of that kind are first deducted from the income and this schedule of rates applies to the residue. Similarly, the rates are applied to company income after all expenses necessarily incurred in earning the gross income, such as allowances for depreciation, have been deducted. I suggest that the question of rates cannot be isolated from the principles of assessment because the kind of deductions that are allowed in the first place, matched alongside the gross revenue needs of the Government, ultimately determines the rate of tax to be applied.

Fundamental, at the moment, are two changes which I think need to be noted. In attempting to assess the proper weight of income tax in the community and in attempting to decide whether that weight is justly distributed among the various sections of the community, allowance has to be made for the kind of deductions to which people are entitled because of their family circumstances. Of course, inflation is a very important factor in making a just assessment of that weight. Secondly, income tax, or direct tax as we call it, is only one part of the tax structure in Australia.

Last night, somebody in the Australian Country Party suggested that when the proposed committee on taxation is set up it might have to determine the proportion of direct taxation to indirect taxation in the community. Speaking for this side of the House, I doubt whether that should be a role of the committee. I suggest that the weight and distribution of taxation between sections of the community is fundamentally a matter for this Parliament and for this Parliament alone. We do not want people outside the Parliament to tell us what proportion of our total revenues should be raised by this sort of tax and what proportion should be raised by that sort of tax.

For our part, we doubt whether there is equity of distribution as between direct and indirect taxation. We believe that, because of inflation and the fact that the concessions allowable to family taxpayers have noi matched the fall in the value of money, the amount of revenue collected from direct taxes in relation to the amount collected from indirect taxes is unjust. At the moment, I want to indicate only briefly the present position in Australia and to contrast it with the position that existed six or seven years ago.

The Estimates for 1958-59 provided for the collection of revenue by the Commonwealth Government totalling £1,151,000,000 excluding from consideration the business undertakings of the Government and certain other items which are called “ selfbalancing “. That £1,151,000,000 is made up in this way:

I ask honorable members to contrast the percentages that I have quoted for 1958-59 with the percentages for 1952-53. In 1952- 53, customs, excise and sales tax together provided 30.3 per cent, of the revenues of the Government. Income tax, on both individuals and companies, provided 61.9 per cent. In 1958-59 customs, excise and sales tax provided 40.4 per cent, of the total r evenue of the Government. Income tax provided 61.9 per cent, of the total revenue in 1952-53, instead of the 53 per cent, provided in 1958-59. So the balance between direct and indirect taxation has shifted considerably in the space of six years. Direct taxation has been replaced by indirect taxation as the major source of Government revenue. We have always thought that indirect taxes are unjust, because they fall according to the consumption of the articles on which they are imposed. For instance, sales tax is payable on certain articles on which the Government has chosen to place the impost, and as individuals buy those articles they pay the tax. Let us consider foodstuffs and household goods. People buy those articles according to the size of the family and not necessarily according to the size of the income, and the amount of tax that is paid is the same whether the buyer is wealthy or whether he is poor. However, the presumption behind income tax was that, the tax being based on a progressive scale, the individual pays according to his ability to pay. The lower his income, the lower the tax that he should pay; the higher the income, the higher should the tax levy be.

Of course, the kind of flat rate deduction that is provided in the rate schedule this year cuts across that fundamental principle of taxation. But the point that should be noted first is that there has been a considerable variation in the proportion of direct and indirect taxation. In the view of honorable members on this side of the House, this indicates that the burden of taxation in Australia is much heavier on family groups in 1959 than it was in 1952-53. The main reason for this, as I propose to illustrate shortly, is that inflation has been built into indirect taxes because, as prices rise, sales tax, which is levied as a certain percentage of the price of the article, increases automatically. However, inflation has had an opposite effect on the incomes of individuals. Let us consider the principal concessional allowances for a wife and dependent children. These allowances have nowhere near kept pace with the fall in money values over the same period. The present concessional allowance for a wife is £143 a year. Why that figure has been chosen, I do not know. As we argued last night in relation to the life assurance proposition, there seems to be neither equity nor logic in the way in which £143 for a dependent wife has been determined. Expressed in money terms, it is £2 15s. a week. I do not think that anybody would suggest that in these days a wife could be kept on £2 15s. a week. The concessional allowance for the first dependent child is £91 a year, or £1 15s. a week, and for other dependent children it is £65 a year, or £1 5s. a week.

Making a rough estimate of what I think should be done to remedy the position, I suggest that those amounts should be doubled. If that were done, substantial alterations in the rate schedule that is now applicable would have to be made. As the matter now stands, the Government is taxing unjustly the family section of the community as compared with taxpayers who do not have dependants. That is a very serious factor which this Government must face.

I propose now to cite some examples of the tax that is payable at different levels of income according to family circumstances. Perhaps it is not always realized what certain family groups pay in income tax. To clarify this matter at the beginning, it must be understood that the burden of income tax is still very unevenly distributed in the community. I refer to the thirty-seventh report of the Commissioner of Taxation, dated 1st June, 1958, covering the year ended 30th June, 1956. Pages 113 and 114 of the report give statistics relating to taxable resident individuals in Australia. It will be seen that in the year to which I am referring there were 3,806,000 taxpayers, 2,625,000 of whom had incomes between £105 and £1,000. They represented 69 per cent, of the total number of taxpayers. There were 1,017,000 taxpayers who had incomes between £1,000 and £2,000, and they comprised 26.7 per cent, of the total number of taxpayers. There were 164,000 taxpayers who had incomes of £2,000 and over, and they comprised 4.3 per cent, of the total number of taxpayers. If honorable members look at the other side of the picture, which shows the amount of income tax payable by the groups to which I have referred, they will see that in the year ended 30th June, 1956, total tax collections amounted to £345,000,000. Of that amount £85,000,000, or just a little under onequarter - 24.7 per cent. - was collected from 69 per cent, of individuals with incomes of £1,000 or less. Then £112,500,000, or 32.6 per cent. - near enough to one-third - was collected from the one-quarter of the total number of taxpayers who had incomes between £1,000 and £2,000. But £147,500,000, or 42.7 per cent, of total collections, was derived from the group which had incomes of £2,000 and over, 4.3 per cent, of the taxpayers.

Honorable members will see the inevitable result of a flat rate reduction. It means that 42.7 per cent, which, for the purposes of this argument, is near enough to one-half of the benefit of the flat rate reduction of 5 per cent., is shared amongst 164,000 taxpayers, and the remaining onehalf of the benefit is shared among 3,600,000 taxpayers. This example of logic, equity and justice has not emanated from this side of the House. I have merely pointed out the effects of the proposed flat rate reduction that will come into operation if the resolution now before the House is adopted. The proposal is contrary to the principle of progressive tax payment according to income. Incomes, too, have been whittled down progressively over the years because the concessional deductions have not kept pace with the fall in the value of money. I propose to illustrate that fact in a moment, but at this point two things that have happened should be noted - first, the shift in the distribution of the total tax burden as between direct and indirect taxation, and secondly, the inequity of reductions of the kind proposed. The Budget made no provision for a reduction in indirect taxes; the only reduction was the flat rate reduction of 5 per cent, which bestows on 160,000 people the same benefit as it bestows on 3,600,000 people.

At this stage the House ought to look at the amounts of tax paid by individuals in certain income groups, making allowance for their family circumstances. Possibly a good point at which to start is an income of £800 per annum, which is about £15 10s. a week. A single person on that income level would at present pay just on £70 in income tax. For a married man the tax would be reduced to £48, a difference of £22. A married man with a dependent wife and child would pay just over £35, a reduction of about £13. A married man with a wife and two children would pay a little over £27. Having a second child to support would result in a tax reduction of about £8. I ask the House in all seriousness whether it sees any justice in a tax structure that makes a man, who supports a wife and two children on a gross income of £15 10s. a week, pay about 10s. a week in income tax. In my view, no income tax should be payable by a person in those circumstances. That is the situation that has developed in the tax structure because concessional allowances have not kept pace with the fall in the value of money. Theoretically, a taxpayer gets a deduction of £143 for his wife. All that this means is that he pays £22 less tax than does a single man. Whether the difference in the responsibilities of a single man on £800 a year and a married man on £800 a year would be properly assessed at only £22.

I would be extremely doubtful. That shows how unreal are many of these concessions.

Other examples throughout the community may be taken. An income of £1,000 a year, or £20 a week, is about the figure that is now so popular when the Minister for Labour and National Service (Mr. McMahon) is citing statistics of average male earnings. A single man with no dependants, receiving £1,000 a year, now pays £106 in income tax, whereas a married man on the same income pays about £80, or only £26 less. A married man with one child pays £64, and a married, man with two children £54. In other words,, the average male wage-earner, who receives- £20 a week, pays about fla week in income^ tax if he has a wife and two children. In: my view, and I am sure in the view of my colleagues, that amount is far too high in terms of equity, logic or justice.

That is the kind of thing being done by this Government in its failure to grapple with the economic problems of the nation. One of the places where economic problems are really felt is in the income structure. Basically the same rates of tax as those we are about to ratify, with the exception of the flat reduction of 5 per cent, have operated in Australia for the last three, or four years. With the exception of the increase of £13 made two years ago, in the allowable deductions for dependent wives and children, there has been no substantial alteration in the tax structure in the last three or four years, despite the fact that in that time the value of money has declined, I suppose, by about 10 or 15 per cent., and every £1 has been robbed of nearly 3s. of its value. That is where the problems shoot home to individual persons in the community. I suggest that the family man is paying far too much income tax and is being increasingly mulcted in indirect taxes on the commodities that he is still able to purchase.

There needs to be some substantial reappraisal of this situation. In my view it is not the function of a taxation committee to do that sort of thing. There may be some scope for a taxation committee to point to complications, anomalies and omissions in the assessing of tax. But the matter of a just allowance for a wife or a dependent child seems to me to’ be a matter for Parliament itself to determine. Similarly, the ratio between the yields of direct and indirect taxes is a matter for this Parliament. There has been no contemplation of these problems by the Government. The Government is satisfied if, every year, it can say: “We have nearly balanced our Budget. During the year revenue yields rose by £100,000,000”, although this was partly because more people were working at the end of the year than at the beginning and mainly because prices were 3 or 4 per cent, higher at the end of the year than at the beginning.

There has been a slow, painful erosion of the family standards of the community. They have been painfully eroded by inflation in the first place. The process has been accentuated, in the second place, by indirect taxes and aggravated, in the third place, because the real value of concessional deductions has disappeared from the income tax structure. Surely the time has come to call a halt. The process cannot continue without its being faced, and the place where it ought to be faced is in the National Parliament at Canberra.

I still have available a certain time. It would be possible for me to go into the present structure of company taxation, but I do not propose to do that. Perhaps some of my colleagues who follow me will do so. The Government has not given close attention to those matters that it ought to have considered. These are the pressing problems of the ordinary person in the community. If the Government had taken cognizance of them, it would not be proposing the sort of reduction that it proposes to-day, which will treat the rich man sixteen times as favorably as it treats the poor man. There is no justice in that. In fact, it will further aggravate and distort the pattern that has developed. For that reason, I commend the amendment to the House.

Mr CAIRNS:
Yarra

.- Mr. Deputy Speaker, I wish to support the proposition put before the House by the honorable member for Melbourne Ports (Mr. Crean) that this House should decline to agree to the motion for the second reading of this bill because it applies an inequitable principle in the distribution of £20,000,000 of Commonwealth revenue. The bill contains two main features. The first is that it provides an allowance or rebate to reduce by 5 per cent, the income tax payable by individuals, and the second is that it raises the age allowance for taxpayers, that is for men over 65 and women over 60 years of age.

The first point is the more significant. The honorable member for Melbourne Ports vividly portrayed the effect of this distribution of £20,000,000 worth of Commonwealth revenue. He showed that, according to the report of the Commissioner of Taxation, 169,000 taxpayers in Australia will receive nearly half of this £20,000,000, that is £10,000,000, and 3,600,000 will receive the balance. That is the kind of scale of priorities, or the kind of social philosophy as the Minister for Labour and National Service (Mr. McMahon) who is now at the table would say, which is contained in this measure.

Mr Hasluck:

– That argument is meaningless unless you relate it to the taxation yield.

Mr CAIRNS:

– We can relate it to the taxation yield because the scale of taxation rates at the present time, which has been accepted throughout Australia, is equitable. It is a scale which, if anything, could be more progressive than it is. But it is no argument to say that because the Government has achieved some measure of progress by taking a proportion of income from those people who have it, it is justified in handing out £20,000,000 in this way. As I said yesterday, in this economy money flows uphill to those who have it already, and the legislative measures of this Government help it to do so.

In addition to those aspects of this legislation, to which I will refer later, there is the question of whether there should be tax deductions at the present time. The Government could retain £20,000,000 in its possession to apply to various purposes if it allowed the present tax rates to remain. But it has chosen to reduce the rate of taxation - inequitably, members of the Opposition say - and has decided to use the £20,000,000 consequently available for the purposes I have mentioned. But the question is: Should there be a reduction in taxation rates and a consequent distribution of £20,000,000 to the community at the present time? My submission is that there should not be any reduction in the tax rate. and I will give several reasons for that view. The first is that it is most essential at the present time to increase the amount of public investment in Australia. The second is that there should be an increase in social services.

No one with any fair or decent scale of priorities could decide that £10,000,000 should be given to people who are already very well off with an income of £2,000 or more, as was shown by the honorable member for Melbourne Ports. No one with any decent scale of preference could decide to distribute this sum amongst that class of people and only £9,000,000 to age and invalid pensioners who receive only £247 a year or less. But that is what the Government is proposing. It is no wonder that no member on the Government side has attempted to defend this measure. There is nothing in it that can be defended. Throughout this afternoon the Government benches have been practically empty. One honorable member from the Opposition side has already spoken on this bill, and he is now followed by me. I expect that when I sit down the debate will be continued by another speaker from the Opposition side. No one on the Government side is prepared to support the bill.

The third/ reason w[hy taxation rates should not be reduced at this time is the existence of international poverty. Australia has an increasing responsibility to assist in raising the living standards of countries not so far from its shores whose people are existing in poverty. If the needy position of the age and invalid pensioner in our own land has no appeal to the Government, then surely the level of poverty in countries adjacent to Australia, where 4,000 people an hour are dying from starvation, should have some effect. Surely we can have regard to these things rather than hand out £10,000,000 to people who are already receiving £2,000 a year or more.

However, I want to examine these matters one at a time. Take public investments in Australia for a start. The level of these investments has remained at a figure which is satisfactory to some people. According to the White Paper on National Income and Expenditure, in 1949-50 the total amount spent on public investment in Australia was about £281,000,000. That represented 10.3 per cent, of the gross national expenditure in that year. In money terms that figure has risen to £777,000,000 to-day. This is because of the enormous inflation in money values, as is apparent in every other category of expenditure in this country. Government supporters are thoroughly enthusiastic. They think that because the amount of money invested has risen from £281,000,000 to £777,000,000, the Government has done a magnificent job. But the percentage of the gross national expenditure represented by these figures provides a different aspect. In 1949, public investments represented 10.3 per cent, of the gross national expenditure; by 1952-53 the proportion had risen to 13.5 per cent, but to-day it is only 12.3 per cent. There is hardly a greater proportion of gross national expenditure on essential matters like public works, cultural and recreational facilities, education, development and conservation of national resources than there was ten or twelve years ago.

This is not good enough. The whole contest and conflict at Premiers’ conferences and the difficulties of Common.wealthState financial relations are altogether the result of the inadequate revenue that is available for essential purposes such as education, health, development, hospitals and railways. The basic requirements of national development have to be brought far more into the picture to-day. Australia, in this position, cannot afford to reduce taxes when the basic requirements of national development have not received any more than they have. We should put the need for increased public investment in the forefront of public policy, and any government that does no more than pay lip-service to national development, as this Government does, cannot afford to give away £10,000,000 or £20,000,000 worth in concessions at a time when the need for national development is as great as it is.

Let us turn to social services. As in the case of public investment, we must have regard to the value of the money that this Government provides. The Minister for Social Services (Mr. Roberton) time and time again has quoted money figures, thoroughly imbued with what has been called the money element, as though £10 to-day will buy what £10 would buy ten years ago. He has given these figures: In 1949-50, £121,000,000 was the total cash social service payment of this country. The amount has risen to £349,000,000 in 1958- 59- £121,000,000 against £349,000,000. Therefore, the Government is satisfied and rests upon its social service programme. The percentage that that amount represents of gross national expenditure was 4.9 to begin with. It had fallen as low as 4.2 per cent, in 1950-51. It was 4.8 per cent, in 1954-55, since when there has been a rise to 5.5 per cent, in 1958-59. There has been a vast money increase in respect of social services and a slight increase in the proportion that that money expenditure represents to gross domestic expenditure.

But let us look at the reason why there has .been this increase in the proportion. It is largely the result of increased prices and of .increased social service benefits that had to be made available,. The Government had no choice. There has been an increase in the number of age pensioners, from 334,923 in 195.0 to 513,789 to.-day. That is the <main reason why the Government is spending more money in that sector of social services. In 1-950-51, the funeral benefit was paid in respect of 25,605 persons compared -with 34,961 in 1958.-59. Widows’ pensions -numbered 42,908 in 1950-51, compared with 49,707 in 1958-59. The number of maternity allowances paid in 1950 was ,1,89,733, .compared with 225,122 in the last financial .year.

We come now to child endowment in particular - the benefit that the Government refused to increase except for the introduction of endowment for the first child. For other children, the Government has refused to increase the amount of endowment. The main reason why it has refused to increase this benefit is the vast increase in the number of children. That is self-evident, because the cost of child endowment is more than that of any other social service.

The number of children in respect of whom endowment is payable has increased from 1,836,322 in 1950-51 to 3,171,823 to-day. The cost of social services has risen mainly because of the increase in numbers _ a matter in which the Government had no choice. It had to pay social service benefits to those persons eligible for them, and so the amount spent has gone up and the proportion has gone up. But the Government had no real choice concerning the expenditure on social services in the community.

Broadly speaking, the pattern of social services in the community to-day is little different from what it was in 1949. The country has increased productivity by perhaps 2i per cent, a year because of a lot of fortunate circumstances, over which the Government had no control and for which it was not responsible. But in these circumstances, the Government has not set out to develop the social services of this country. It has neglected them in much the same way as it has neglected the public investment programme. In this respect, what Australia needs is not a government that will reduce taxation but a government that will, with imagination, develop the public investment and develop social services to a degree that in ten years’ time both those fields will leave Australia unrecognizable compared with the country to-day. We have slums, and broken and battered streets. The children coming out of those homes in the slums have no opportunity to avoid becoming the victims of juvenile delinquency. All these things could be removed if the Government accepted its responsibilities.

We cannot afford to rest on this problem. I. should think that it is a matter of explaining to people what is involved in this, but the present Government which has its own objectives of national development and fair play makes i,t extremely difficult for those who depend upon social services, because always this Government is playing up to self-interest. Always it is prepared to hand out benefits to people who seek their own self-interest. The Government has a philosophy of that sort and that philosophy is manifest in this bill. The gains from increased productivity each .year could .be made available for social services if the Government had a social conscience, perhaps :as much as 2i or 3 per cent, per annum. So perhaps £180,000,000 worth of -new national income is available every year, but no more than one-third of that becomes available for essential public investment and for social services. Something more than that is needed. That can come, broadly speaking, only from taxation.

The Government should follow a constructive policy to develop these things; to try to get rid of the problems that are associated with them; to try to solve problems of traffic caused by congestion because of poor or bad roads and to try to get rid of road problems; in the basic transport field. Only public investment could solve these problems. Hundreds of thousands of slum dwellings in the country could be removed.

Let us look at the situation in Victoria. The State Housing Commission is the only instrumentality really that can solve the problem of slum houses in the areas where they exist but it is building only 2,200 units and there are 16,000 applicants waiting. Even if only the current applications were met, it would take the commission seven or eight years to catch up. This is not the fault pf the State Government or of the Victorian Housing Commission. It is the fault of a system of priorities laid down in Canberra, where the Government has decided to give £10,000,000 to the Australian taxpayers who are in receipt of £2,000 a year or more, instead of providing an increased amount of money for the construction of houses for low-income earners. -This comes back directly to the Commonwealth Government in Canberra. It is no use people being worried about the position in relation to age pensions, or about the existence of broken and battered streets and decaying and rotting houses in Sydney and Melbourne and complaining to their own State governments - whatever their political colour - or the State housing ^commissions, because the responsibility lies fairly upon this Government, which has a totally inequitable system of priorities.

The next matter for consideration, when we are looking at this problem, is what kind of attitude we should adopt to the taxation system. Yesterday afternoon the honorable member for Mackellar (Mr. Wentworth) expounded the principle that taxes should be levied according to the ability of the taxpayers to meet them. The honorable member admitted that that was his opinion. Is it the view of other supporters of the Government? Is that the view of the Government itself? Does the Government believe that taxation should be imposed in accordance with the ability of the individual to pay? If the .Government does believe in that principle then, as the honorable member for Melbourne Ports (Mr. Crean) has pointed out, this bill is in direct conflict with that principle. We have a tax structure, to begin with, which imposes a rate of Id. in the £1 on incomes of £100 a year, rising to 160d. - 13s. 4d. - in the £1 on incomes of £16,000 and more. It seems to me that that tax scale has been traditionally accepted by the people of Australia for too many years. There was no call to make an overall reduction in that scale, but the Government, by means of the legislation now before the House, has chosen to do so.

I want to consider for a moment or two the question whether Australia can afford a progressive tax scale, or a more progressive scale than operates at the present time. Several reasons are given from time to time in support of the view that Australia cannot afford a more progressive scale. First, there is the argument about savings - the one usually advocated by the honorable member for Sturt (Mr. Wilson). According to this argument, if taxation is levied on a progressive basis, people are discouraged from saving. This is a question that we examined yesterday afternoon, and it seems to me that those who are influenced by this kind of argument must think again. The facts show that personal incomes are not very important in determining the level of sayings. The level of savings that exists in an economy to-day is a result mainly of what we can call corporate price policy - the ability of large private corporations, and of public corporations, through their price policies, to extract money fom the economy for the purpose of capital development. The second main determining factor in the level of savings is taxation. In these circumstances it seems to me that the argument against progressive taxation on the ground of a necessity to encourage personal savings has not much social validity.

Another point to be considered in deciding whether we can afford a progressive tax scale, or whether the Government is justified in reducing the tax scale by means of this bill, is that of inequality. The honorable member for Melbourne Ports (Mr. Crean) gave certain figures taken from the report of the Commissioner of Taxation, showing the inequality that exists in Australia to-day. It may not be as apparent as in some other countries, but there is certainly a very marked degree of inequality. I also want to use some figures taken from the commissioner’s report to illustrate the extent of inequality in this country. According to the 1955-56 report, which is the last one available to us, 3,943 people had incomes of £10,000 a year and more. These represented .1 per cent, of the total number of taxpayers, and their total personal incomes amounted to £57,000,000, which was 2 per cent, of the total taxable personal incomes in the country. Even after the payment of taxation, their total incomes represented 1.1 per cent, of all personal incomes in Australia. In other words, their share of income was ten times as great as the proportion they represented of the total taxpaying population.

Coming down the scale, and considering those taxpayers with incomes between £5,000 and £9,999, we find that they numbered 18,238, or .48 per cent, of the total number of taxpayers, and that their total income amounted to £110,000,000. This was 3.84 per cent, of the total Australian taxable income, and after payment of tax this proportion became 2.4 per cent. So, their proportion of total Australian incomes was five times as great as the proportion they represented of the total number of taxpayers.

Coming down to the bottom of the scale, to those with taxable incomes between £105 and £299, we see that there were 369,228 people in this category, representing 9.7 per cent, of the total number of taxpayers. They had only £73,000,000 in income, or 2.53 per cent, of the Australian total. This became 2.9 per cent, after deduction of income tax. In other words, their proportion of the total income was only one-quarter of the proportion of the total taxpaying population represented by them.

Let us come then to the group with incomes between £700 and £999. These are the people earning the basic wage or a little more. There were 1,115,316 of them, being 29.3 per cent, of all taxpayers. They had incomes amounting to £751,000,000. This was 26.22 per cent, of the total income. After payment of tax, they received 27.5 per cent, of the total income. The ratio of their income to the Australian total was about equal to their proportion of the population.

In the group earning between £1,000 and £1,499, which, together with the group I have just mentioned, includes the substantial majority of our productive workers, there were 835,584 people, or 21.9 per cent, of all taxpayers. Their income amounted to £768,000,000, being 26.82 per cent, of all taxable income. After payment of tax they received 27.3 per cent, of total income. Their proportion of total income was about one-third more than their proportion of total taxpaying population.

These figures demonstrate that there is very great inequality. Tax makes little difference to the degree of inequality. It reduces it a little at the top, but the inequality remains apparent at the lower levels, showing that there is plenty of room for the introduction of a progressive taxation scale.

Let me move now from personal income to company income. I believe this is significant in a different way. Although inequality of company incomes means also inequality in personal incomes, the degree of inequality shown in the case of companies is quite astonishing. In 1955-56 there were 50,170 taxpaying companies. Those with an income of £1,000,000 or more were 75 in number, representing .15 per cent, of all companies that paid tax. They had combined incomes amounting to £185,000,000, being 27.34 per cent, of all taxable company incomes. Taking the group of companies that earned £100,000 or more we find that there were only 1,022 of them in that year, representing 2.04 per cent, of the total number of taxpaying companies. They received 60.84 per cent, of all company income. This demonstrates the high proportion of income derived by only 2 per cent, of the companies in Australia. They were the companies with great economic powers. By their price policies they could ensure maximum profits, so that they could gain control of a large volume of investable funds, and so contribute indirectly to the inequality of personal incomes.

Mr Snedden:

– How can the honorable member consider numbers of companies without reference to the shareholders’ funds employed?

Mr CAIRNS:

– I gave some figures about a fortnight ago, when, perhaps, the honorable member for Bruce was not present, which showed that 3,800,000 payers of non-provisional tax - in other words wage and salary earners - had income from dividends of about £14,000,000. On the other hand, there were about 1,000 persons paying provisional tax who had about the same amount of income from dividends - £14,000,000. The total income from dividends of those paying provisional tax was £98,000,000. In other words the provisional taxpayers had almost £100,000,000 worth of income from dividends, while 3,800,000 non-provisional taxpayers had dividend income amounting to only £14,000,000. The argument that shareholding makes a difference in considerations of this nature is one of the greatest fantasies of the age. Shareholding contributes nothing substantial to the majority of people in this country, and shareholding contributes nothing to the power of the people to influence the decisions of these great corporations. Those decisions are made by people who are experts in managerial or technical fields, while the shareholders are almost completely passive. All the talk about people’s capitalism is one of the fairy tales of our time.

I now return from that digression to discuss what this bill in fact proposes to do. First, as was pointed out by the honorable member for Melbourne Ports, it will leave the general tax structure unchanged. It leaves the situation that a great proportion of revenue comes from indirect taxes. A little while ago the honorable member for Mallee (Mr. Turnbull), replying to the argument of the honorable member for Melbourne Ports that a reduction of direct taxation greatly benefits people with high incomes, asked, “ What happens when taxation increases?” Let me tell him what happens. When taxation is increased in this country, it is the indirect taxes which are increased. In 1956 the horror Budget increased indirect taxation by over £100,000,000. There has been no attempt by this Government to reduce this impost upon the wage earning public. As the honorable member for Melbourne Ports pointed out, indirect taxes bear upon people according to the amount they spend on consumption goods - upon their living expenses. The extra impost of £100,000,000 a year that the Government put upon the people in 1956 by increasing indirect taxation has been reduced only to a very slight extent.

Mr DEPUTY SPEAKER (Mr Bowden:

– Order! The honorable member’s time has expired.

Mr BEAZLEY:
Fremantle

.-I want to speak briefly to this measure. I feel that several points that were raised by the honorable member for Yarra (Mr. Cairns) require an answer. They are related to what I believe is the consistently inflationary policy of the Government. Whether honorable members opposite believe that the Government has a consistently inflationary policy,I do not know; but all of them must accept the fact that there has been consistent inflation in Australia during the ten years that this Government has been in office. They may say that that is not due to the policy of the Government, but they cannot say that it has not taken place. Inflation has been consistent in Australia during that period.

If this is to be treated as a serious debate, it is up to the Government to explain why, when it is maintaining a sales tax which produces a revenue of £150,000,000, it is reducing direct taxation. Why does it always choose to reduce direct taxation and not choose to reduce indirect taxation? It is beyond doubt, I think, that £150,000,000 of sales tax revenue is £150,000,000 of price raising, and surely it cannot be contended that £150,000,000 of price raising by the direct action of the Government is not £150,000,000 of inflation. Inflation is a condition of rising prices, and sales tax unquestionably raises prices.

There is also the question of investment. I wish the Government would be sympathetic towards investment in. all its forms. I wish to discuss certain forms of investment which I think the Government entirely ignores. I have recently been assisting in the preparation of a case for a certain union for submission to the arbitration court. It is a union of men engaged in a skilled occupation. Sometimes it is contended that skill is a diminishing factor. It is contended that, with the mechanization of carpentry, the carpenter is no longer a skilled man, but it cannot be contended that in the sphere of electronics skill is not increasing. The profits being earned by many of the companies producing electronic goods such as radio and television sets are enormous. Any honorable gentleman who cares to go to the library and examine the Ian Potter Investment Service statistics will see some astonishing figures. Electronic companies have consistently paid dividends of 15 per cent., and their reserves and undistributed profits have on occasions increased by £1,750,000 in a year. There is one company whose undistributed profits increased by more than that.

This is obviously a field in which immense profits are being made. If you can increase your reserves by nearly £2,000,000 after you have paid a dividend of 15 per cent., you are in a very advantageous position. Once upon a time we were promised by a Country Party Treasurer that there would be an excess profits tax. That tax would have hit reserves and undistributed profits. The argument against hitting them is that they provide investors’ funds for the future. The truth is that in the existing prices of radio sets, television sets and all other electrical and electronic equipment provision is being made for the future development of the companies concerned. In other words, their future investment is loaded on to the prices of their commodities.

You may argue that that is a good policy. I do not think it is if you believe in a people’s capitalism. What is happening now is that a monopoly is being given to existing shareholders. A company does no: have to call for new capital from the genera”) public and get new shareholders. The reserves and undistributed profits are the property of the existing shareholders, and they are reinvested. Consequently, as Dr. Coombs pointed out, this narrowing and monopolistic trend will continue if that is the way we get our money for future investment.

Mr DEPUTY SPEAKER:

– Order! ! point out to the honorable gentleman that this bill deals only with income tax.

Mr BEAZLEY:

– Yes, Mr. Deputy Speaker, but I should like your direction on another point. The bill deals, does it not, with the whole question of the taxation of companies? I am arguing that the Government ought not to reduce the taxation of companies while undistributed profits are increasing.

Mr DEPUTY SPEAKER:

– The honorable member will be in order in discussing companies to a certain extent.

Mr BEAZLEY:

– I am trying to link my remarks with the question of taxation and its relationship to people having investment funds. The Government is constantly marking certain decisions in relation to savings. It decides that if it reduces direct taxation the greatest new capacity to save will be amongst those with the highest incomes. Therefore, I believe that my argument that that is a wrong policy is relevant. Constantly in connexion with the Australian economy we hear it said that savings will come from the people with high incomes and that the investment we ought to encourage is money investment in industry, but no thought is given to investment in human skill.

We want to see industrial advances in Australia, but by constantly reducing the margins of the people who, generally speaking, are at the other end of the social scale, we are discouraging investment in the skill of the men who are engaged in industry. In 1949, when the basic wage was £5 7s. , the margin for skill in the electronics industry was £2 12s. or 48 per cent, of the basic wage. To-day, when the basic wage is £13 14s., the margin for skill is £3 15s., which is 27 per cent, of the basic wage. In this industry in which a company can add in a year £2,000,000 to its reserves for future investment - money which is untouched by the taxation policy of the Government - the margin for skill of the men who are performing the work is being reduced. There is a discouragement of people to go into that industry. If one looks at Switzerland, one will recognize that it is a country of few resources except human ones. The tremendous skill involved in the Swiss watchmaking industry is a human factor. Everything that goes into a watch is imported into Switzerland, but the capacity to make the watch is in the people. There has been an investment in increasing the skill of the people.

In forming its taxation policy, the Government thinks constantly in terms of encourag- ing one form of investment at one end of the social scale and gives no thought to investment in skill at the other end of the social scale.

Mr E JAMES HARRISON:
Blaxland

– 1 want to follow on, if I may, from where the honorable member for Fremantle (Mr. Beazley) left off. The Government’s taxation policy as it applies to wage earners in the lower income brackets must be condemned. The Treasurer (Mr. Harold Holt), in foreshadowing the 5 per cent, reduction in income tax rates, told us that the cost to the revenue of this reduction would be £20,000,000 in a full year, and £17,900,000 in the current year. I ask the House to note the guarded way in which the proposal is presented to us. The present Treasurer knows that his predecessor in office said, many years before the present Government gained office, that every one shilling rise in the basic wage meant another £1,250,000 in the Commonwealth’s coffers, under the uniform tax system. That statement was made in this House, when the Chifley Government was in office, by the then would-be Treasurer - who later became Treasurer. That figure has been magnified more than twice since the then would-be Treasurer made his statement. It is symbolic of this Government’s approach to the problem that the Treasurer speaks of the cost to the revenue being £20,000,000 in a full year and £17,900,000 in the current year, because he knew when he prepared his Budget that the 5 per cent, reduction that he proposed would materially assist only the people on the higher income levels.

The basic wage in Australia is designed to buy a certain amount of commodities for the family - the bread, butter, tea, sugar and other things that are necessary for the family upkeep - and is also fixed according to the nation’s capacity to pay. If any relief is to be granted at the present time surely there is a moral obligation on the Government to give that relief to the people who are bearing the greatest tax pressures. The inflationary policy followed by this Government means that the pressure of taxation is greatest on the family unit - on the man on the basic wage or who is receiving even less than that. I know that it has been suggested in this place, if not by the present Minister for Labour and

National Service (Mr. McMahon), then by his predecessor, that very few workers in Australia earn only the basic wage. The records for this year give the lie direct to that contention. The basic wage is now £709 16s. The tremendous number of 1,509,511 people at present receive the basic wage, or less.

Mr Davis:

– How many males and how many females?’

Mr E JAMES HARRISON:

– Does that matter very much?’ If a female goes down the street to buy a loaf of bread she does not get it at a lower price because she is wearing a frock. I am pleased that that interjection was made, because there is a belief on the Government side that females shoud not be paid on a basis of equality with males. Any country girl who goes to live in the city, or any city girl who rents a flat, does not have to pay a lower rent because she is a female. She is not able to buy a loaf of bread or a pound of meat at any lower price than a man would pay. That is one of the reasons why there ought to be a different approach by the Government and the court to wage fixing. All this business of having the female wage less than the male wage must be done away with, especially when so many females are playing their part in production.

Let us look at how a small group of people is to benefit under this legislation. The report of the Commissioner of Taxation for 1957-58, the last report which is available, shows that there are more than 162,809 people in the £105 to £199 income range. They are juniors, in the main. The Treasurer, as a result of this magnificent 5 per cent, reduction of income tax, will allow those junior employees a tax reduction amounting to 2s. 6d. a year. A taxpayer earning £300 a year will get the magnificent reduction of 7s. 9d. a year. The wage-earner on £400 will get 16s. 3d., and the wage-earner on £500 will get 27s. To go one step further, the family man on £600, who will get a reduction of 39s. 8d. in his yearly amount of tax under this proposal, is in his present wage bracket only as a result of the 15s. increase in the basic wage recently awarded by the court. While he will get a reduction of 39s. 8d. in his tax he will be paying an additional £4 12s. in tax as a result of that basic wage increase.

The Treasurer knew full well when he made his Budget speech that, while the cost to the revenue of the reduction would be £20,000,000, the Government was going to take from the wage-earners alone, as a result of the increase of the basic wage, more income tax than it had estimated for. That is the unfair proposition. As a result of that increase of 15s. in the basic wage the family man will pay more in tax in 1959-60 than he did in 1958-59. As against that, the man with a yearly income of £16,000, and others in a similar position who are not concerned with basic wage increases, will get the real rake-off that the Government is handing out in the form of this 5 per cent, reduction. Surely the time has arrived when tax methods should be revised. Let us remember that when the Chifley Government went out of office-

Mr Turnbull:

– What about when the tax goes up?

Mr E JAMES HARRISON:

– Let me tell you what happens then. When the Chifley Government left office, the basic wage earner with a wife and two children paid no direct taxation. To-day, such a man has to buy the same amount of bread, butter, cheese, milk and other household requirements as his counterpart had to buy then, but the present Government, even after this 5 per cent, reduction, will take even more from him than it did before. The policy of the Government in regard to income tax on people in the lower income groups is a standing disgrace. Its policy is immoral in a country which is rich in everything that we require. If, in 1948-49, under the Chifley Labour Government, the basic wage earner with a wife and family could be relieved completely of income tax, it is a standing disgrace that this Government has not followed the same policy right throughout its term of office. It has allowed an inflationary trend to develop. Surely the first responsibility of any decent government in those circumstances would be to take care of the families.

When honorable members opposite speak of taxation they merely point up the difference between a Labour government and the type of government in office to-day. This Government believes in giving more riches to the rich and to hell with anybody else. That is the fact that is pointed up by this legislation. If the Government wanted to do something humane with its revenue why did it tell us that we could not afford any more than another 7s. 6d. a week for pensions? Here again, surely, the Government had an obligation to do something for those who were in greatest need before making tax remissions to those in receipt of £16,000 a year. I am prepared to say that if the Government had taken a vote of those people who are in receipt of huge incomes, it would have learned that these higher income earners would have preferred those in greatest need to get greater relief. Of course, those who are greedy, the people to whom this Government panders all the time, would have voted against it.

Mr Pearce:

– Fair go!

Mr E JAMES HARRISON:

– It is all very well to say, “ Fair go! “ I am stating the actual position. A government which is prepared to take £4 12s. from the basic wage earner and to hand £460 to the man in receipt of £16,000 a year is following a policy which is completely foreign to that followed by the Labour Party. We have proof of that. The Labour Government looked after the lower income earners. The first thing Labour did when it attained office was to set about relieving the man with a wife and family of the responsibility of paying income tax. Further, by pegging wages and controlling prices during the war years, the government was able to prevent the inflation one would expect to develop at such a time. When imposing additional taxation for war purposes during that period, the Labour Government looked after the family man.

I have no desire to deal with sales tax. This was dealt with very ably by the honorable member for Fremantle (Mr. Beazley) and others, but surely, if the time had arrived when the Government felt that £20,000,000 could be handed back to the Australian people in tax remissions the Government had a moral obligation to give the money to those who were in greatest need, especially in view of the fact that in 1951, when the Government felt the need to pour additional money into its coffers, it increased the concealed taxes which operate most harshly upon those in the lower income bracket. How pleased we were to hear the honorable member for Mackellar (Mr. Wentworth) ask last night for a complete review of the taxation system! How pleased we were to hear him advocate the granting of some relief to the lower income earners! It was a clear indication to the Government that even its own members disapprove of the policy which the Government is now adopting. We now know that at least one member on the Government side realizes that the lower income earners of this country are gradually being driven into a tight financial corner as a result of this Government’s policy. lt is not good enough for the Government to argue that the number of persons in receipt of the bare basic wage is becoming fewer and fewer, for more and more do we see a tightening of finances amongst the lower income earners of Australia to-day.

What the honorable member for Fremantle says about the lower income earners is equally applicable to those in receipt of tradesmen’s rates. With the increase of 1 5s. a week, a tradesman will receive an annual salary of £905 if he does not work any overtime. But an examination of statistics will disclose that the majority of the workers in Australia are earning incomes about equal to the tradesmen’s rate. The figures also show that the majority of positions becoming vacant are those which attract lower than a tradesman’s rate, and it is true that there is a greater tendency, with the introduction of automation, for a smaller number of tradesmen to be employed and a greater number of unskilled workers to become unemployed and looking for jobs.

Let us examine what will happen under this legislation. The tradesman on £905 a year, as the result of the tax reduction of 5 per cent., will enjoy a reduction of 39s. in his assessment and pay an additional tax of £4 7s. But the man on the basic wage who has a wife and two children will pay more than £11 a year in taxes because he will be put into a new salary range by the increase of 15s. a week in the basic wage. If that is the so”t of policy that is to be followed by the Government, then it is no wonder that the purchasing power of the community is becoming less and less. Under such a policy, it is bound to decline. The man conducting the small corner business and other business people, both in the suburbs and in the cities, are finding it more difficult to carry on as the weeks go by because of this reduction in the spending power of the workers. The spending power has become less because this Government’s Budget does nothing to reduce the family man’s costs. Because of the effect of this legislation, the interest rate on finance advanced for home building has put the family man’s rents at a higher level than he has ever been accustomed to paying. If the Government really wanted to do something to help the lower income earners, if it had any feeling at all for those in receipt of lower incomes, then before allowing any tax remissions at all to those in receipt of higher incomes, it would lift the point at which taxation begins to apply in Australia. As I said last night, New Zealand has adopted that course. There, the point at which taxation starts to apply has been lifted by almost 300 per cent., from £104 a year to more than £300 a year.

I submit that the Government should have done something for the man with a wife and two children. It should have sought to put his house in order and to increase his purchasing power, if it felt that there was £20,000,000 that the Treasury did not want this year. The Government should have given that money to the family man, the man who needs it most. But this Government follows a different policy. It follows the policy that the higher the income the greater the benefit it must give. It works on percentages, and if it is to be consistent in using averages and percentages, then surely the first measure it should take is the relationship of the commencing point of taxation to the basic wage. If that is not done, the burden of the basic wage earner becomes greater as the basic wage rises. Taxation has now reached the stage at which a man in receipt of the basic wage is paying the same amount of tax as was paid under the Chifley Government by the man in receipt of £900 a year, the man who was regarded then as being quite comfortably off. In 1946, 1947 and 1948, the man in receipt of £900 a year - the present tradesman’s rate - was looked upon as being in a very comfortable position. He was very much ahead of the tradesman and others on the tradesman’s rate in those days. As a matter of fact, men in receipt of £900 a year in those days often held executive positions. Yet, despite the fact that at that time such a man was receiving twice the amount enjoyed by the basic wage earner, the amount of tax he paid was as nothing when compared with the tax now being paid by the man on the basic wage who is trying to rear a family at a time when the cost of basic commodities is so high. Morally, the Government had a responsibility to give some consideration to the lower income earners at the first opportunity it had to review taxation. As I said last night, I had hoped that it would have given further reductions than those now proposed.

When speaking of taxation on a percentage basis, let us examine the relationship of the basic wage to the inflationary trend. I submit that it is not too much to ask that we take as a standard the principle that direct taxation shall not be imposed upon the married basic wage earner who has a wife and two children to maintain. Can’ honorable members say that is an unfair proposition to submit to a community that desires to have a progressive nation? Is it unfair to the man with the corner business who is dependent upon the family group for the continuance of his business?

I do not want to go into the technical side of this matter. That was done very capably by the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Yarra (Mr. Cairns), but I do want to put before the chamber the facts as they apply to those about whom I am most concerned, the trade unionists, the small people, the pensioners, indeed, all those who are in the lower-income bracket, all those who are finding it more difficult day by day, because of increasing costs, to maintain the standard they want so much to enjoy. I put it to honorable members that those of us who are playing our part in seeking to do something for the man with family responsibilities, those of us who are seeing a decline day by day in living standards, are becoming greatly concerned at the effect of this Government’s policy. It is all very well for the honorable member for Fawkner (Mr. Howson), who is living in the lap of luxury, to laugh. Let him go into the homes of railway workers, whose overtime has been eliminated, and he will see the change that has taken place in their living standards as a result of the introduction pf automation and modern technology into their industry. Those workers are now existing on little more than the basic wage. If the Government comes to understand those things it will appreciate that it has a responsibility to see that there is a more equal distribution pf the wealth of this nation. Railway workers in all States are facing difficult times because their overtime has gone. The shed men are back on the basic wage.

The same thing is happening in the textile industry. Somebody mentioned the fact of women working in the textile industry. Let me remind the Government that if ever women give up working thousands of additional men will appear on the lists of unemployed. Thousands of men are unable to obtain work to-day, .but are not registered as unemployed because their wives are in employment. Because of that those men are not a burden on the Commonwealth. There are thousands of them in the metropolitan area of Sydney alone. No check has ever been made of their numbers by this Government.

Something more must be done for workers in the lower income bracket. This bill affords the opportunity to do something for them, but 1 know that they will get no benefits under this legislation. This Government should occasionally look at the moral side pf taxation reductions if, in fact, reductions can be effected. This legislation does not provide for any real reduction. The 5 per cent, is not a real reduction, because the Government will obtain more in taxes from the wage-earners as a result of the recent increase of 15s. a week in the basic wage. Nobody knows that better than the Minister for Labour and National Service (Mr. McMahon) and the Treasurer (Mr. Harold Holt). To talk about remissions in -this fashion is a fallacy and an attempt to pull the wool over the eyes of the workers of this country. Legislation of this type must eventually catch up with the Government if it does not pay attention to the need to extend tax remissions to the people most in need of them - the family man with a family unit. After all, he is the backbone of a growing young country such as Australia.

Debate (on motion by Mr. Snedden) adjourned.

Sitting suspended from 5.58 to 8 pan.

page 2231

NATIONAL HEALTH BILL 1959

Bill presented by Dr. Donald Cameron, and read a first time.

Second Reading

Pr. DONALD CAMERON (Oxley-

Minister for Health) [8.0]. - by leave - J moye-

That the bill be now read a second time.

The last few years have seen great growth and development in the national health scheme established by this Government. To take two examples, payments of Commonwealth and fund benefit in the hospital benefits scheme have now reached £25,000,000 per annum, whilst benefits payments in the medical benefits scheme now exceed £17,000,000 per annum. These benefits flow directly to patients, enabling them to meet the major part of their hospital and medical costs.

It is, of course, a matter of great satisfaction to this Government .that there has been such strong public support for the purely voluntary scheme which w,e initi ated and fostered. There is no .doubt whatsoever that a contributory health benefits scheme on a voluntary basis is the one most appropriate ,to Australian needs and conditions and that the future of this scheme is now assured.

At the same time, the Government recognizes that growth and development necessarily give rise to new problems and it is to deal with a -number of such problems that this bill is introduced. It will, I think, be most convenient -if I .deal with the various matters in relation to the particular aspects of the national health scheme which they affect.

The Treasurer .(Mr. Harold Holt) announced, in his Budget speech ,on 11th August last, .that the .Government intended to negotiate .with registered medical benefit :funds with a view to introducing a .plan for considerably higher Government and fund benefits for major surgery and certain other medical services.. These negotiations were commenced within a ‘few days of the Treasurer’s announcement and I am happy to inform the House that they have led to the formation of a plan under which medical benefits will be substantially increased for many surgical operations and other costly medical services.

This bill provides for increases in some 140 items iri the schedules of medical benefits. The largest increases are for major operations, where the Commonwealth benefit will in some cases be increased from £11 5s. to £22 10s. The benefit for many of the less serious operations will likewise be appropriately increased. Whilst the increases in Commonwealth medical benefits will thus be implemented by this legislation, the increases in fund benefits will be effected in different ways according to the particular circumstances of each organization. The largest medical benefits organizations in New South Wales and Victoria have agreed with me that they will soon introduce new tables providing fund benefits related to the new schedules of Commonwealth medical benefits, and contributors will be invited to transfer their insurance coverage to these new tables. Many of the other organizations will implement the new arrangement simply by making an increase by the rate of contributions payable by their contributors.

The amount of the increase in the rate of contribution will depend on the amount of the increase in fund benefits provided by each organization. This will vary from organization to organization. In many cases the organization will increase its fund benefit by the same amount as the Commonwealth benefit is being increased and, in these cases, the rate of contribution will rise by about 6d. a week for a family and 3,d. a week for a single person. In other cases the organization may increase fund benefits by amounts considerably in excess of the increase in Commonwealth benefits, and where this is done the rate of contribution will, pf course, have to b.e increased by a greater amount. Before the plan comes into .operation on 1st January .next, every contributor will be able to get exact information from his own organization regarding the cost of insuring for the new benefits.

Commonwealth benefits at the new increased rates will be payable to contributors who are insured for fund benefits equal to those set out in the First Schedule to the National Health Act, when amended. However in order to allow adequate time for contributors to adjust their insurance, where ever in order to allow adequate time for contributors to adjust their insurance, where necessary, so as to become eligible for these benefits, the bill provides that during the first year of the operation of this plan, insurance at a level equal to the present First Schedule will constitute eligibility for Commonwealth benefits.

This amendment is an extremely important one. Although the number of persons who have to undergo major surgery is relatively small, compared to the total number insured, the burden of the medical fees in these cases can be extremely heavy. Under this new plan, however, it will be possible to insure against this burden by joining a medical benefit table which, in cases of major surgery, will provide Commonwealth and fund benefits up to £60 for a major operation. Up to date the maximum benefit payable for any one operation has been £30. Thus, in one step, we are implementing a plan which will double the benefits payable to contributors for these serious operations, for a small increase in the weekly contribution. I feel confident that members of medical insurance funds will be pleased with this new arrangement and will take advantage of the opportunity provided to insure themselves adequately against the risk of major surgery.

The other medical benefit amendment proposed by this bill is of a technical character. It is of considerable importance to the medical benefits organizations, but of little significance to contributors. Briefly, this amendment will relieve medical benefits organizations of the obligation to transfer contributors for medical benefits to the special account upon reaching the age of 65. It was initially thought that the over-65 contributor was causing an undue drain on the funds of the medical benefits organizations and, accordingly, we agreed last year that these persons would be enrolled in the special accounts guaranteed by the Commonwealth.

Experience has, however, suggested that, because of the coverage provided by the pensioner medical service, the over-65 contributor has not, in fact, drawn unduly heavily on the medical benefits funds. The organizations are, therefore, prepared to carry this class of contributor in thenordinary accounts and this bill will enable them to do so. This provision will have no effect on contributors because the funds will continue to pay them the full benefits to which they are entitled under the funds’ rules and, in the event of a pre-existing ailment or maximum benefit rule disqualifying them from fund benefit, they will then be transferred to the special account and receive medical fund benefits from the special account in the same way as any other contributor. I hope it will be clearly understood, Mr. Speaker, that the requirement that contributors shall be automatically transferred to special account on reaching the age of 65 is being removed for medical benefits, but not for hospital benefits.

In regard to hospital benefits, one amendment only is proposed. This is in relation to a matter on which there has has been a great deal of discussion, some of it, I fear, based on an incomplete understanding of the matter. I refer to the problem of payment of special account benefit in cases where hospitals are not “ recognized “ for the purpose of the special account plan.

Last year the Government introduced legislation under which it became possible for the first time to pay hospital and medical fund benefit to persons suffering from chronic or pre-existing ailments, and in cases of long-term illness where it was necessary for a patient to remain in hospital longer than the period during which the funds pay benefits under their rules. This removal of restrictions on payment of fund benefit was a tremendous step forward in the hospital benefits scheme, and its introduction has brought relief to a large number of persons most in need of help.

As I explained when I introduced the legislation last year, it would not be reasonable if this special account fund benefit plan was extended generally to patients in convalescent homes, benevolent homes, rest homes or homes for aged persons. Although these institutions are, in some cases, classified as private hospitals for the purposes of various State laws, they do not generally provide hospital treatment at a standard equivalent to that which is given at general public hospitals. The institutions concerned are not so much “ hospitals “ as the homes of the persons who are accommodated there. Generally, they are not nearly as costly to maintain as a normal hospital because they do not provide the full hospital treatment which a hospital patient requires and receives.

Notwithstanding the very limited way in which these homes can be regarded as hospitals, the Commonwealth has nevertheless always accepted their patients as hospital patients for the purposes of payment of Commonwealth hospital benefit and, accordingly the patients in these institutions who are insured with a registered hospital benefits organization have been, still are, and will continue to be entitled to payment of Commonwealth hospital benefits amounting in all to £7 a week. Many of these patients are social service pensioners and are thus entitled both to pension payments amounting now to £4 15s. a week, as well as Commonwealth benefit of £1 a day, if insured, thus giving them altogether £11 15s. a week from the Commonwealth, towards the cost of their accommodation in these institutions.

The difficulty that has arisen in this matter is to establish a proper line of demarcation between hospitals and institutions of the type I have described. Because of the need to supervise these institutions, State health legislation requires them to be registered and varying classifications are applied from State to State. Even if these classifications were uniform, the fact of being required to register under State legislation does not mean that any one of these institutions is a hospital providing full hospital treatment. Therefore, it is necessary for the Commonwealth to apply its own criteria in deciding which institutions do, in fact, provide facilities and treatment on a basis comparable with that provided in public hospitals.

In the act that was passed last year, this difficulty of definition was dealt with by excluding from entitlement to special account benefits, patients in the various types of institutions I have mentioned and also in “ institutions that provide accommodation principally for permanent patients “. This expression, whilst adequately defining the types of institution intended to be excluded, has been found to be too restrictive. The Government has accordingly decided to re-define this class of institution, and the new definition, which is included in this bill, will not include the expression “ an institution that provides accommodation principally for permanent patients “. The new definition will exclude benevolent homes, convalescent homes, homes for aged persons, rest homes and other institutions of this nature. The effect of the new definition will be that special account benefit will, after 1st January next, be payable to patients in institutions which conform more closely to the conception of true hospitals.

The new definition will in addition provide that individual patients in homes which are not eligible for recognition will be entitled to payment of special account fund benefit, when they can establish, first, that they were suffering from an illness or injury requiring treatment of the kind provided in public hospitals; and, secondly, that the treatment provided was of a standard substantially equivalent to that which they would have received in a recognized public hospital.

I have explained this proposal at some length in the hope that misunderstandings which have arisen in the past will not in future cloud or hamper any discussion which honorable members wish to conduct on this subject.

I come now, Mr. Speaker, to those sections of the bill which deal with the proposed changes in pharmaceutical benefits, and are perhaps more controversial than those to which I have just referred. In fact, they are already giving rise to some controversy, a good deal of which may proceed from an inadequate understanding of the Government’s proposals.

First of all may I say, Sir, that the national health service is not something which is static and fixed, and should not be so regarded. It must be capable of modification and improvement from time to time as circumstances demand, and opportunities and resources permit, but at the same time this must be done in a way which is financially responsible, and properly co-related with the rest of the great structure of social services which the Government has built up, and which depends, in turn, on the vast national expansion, development and prosperity, which have followed in the wake of its economic policy and which, like the celebrated monument to Sir Christopher Wren, one only has to look around to see.

It is, however, imperative in the national interest that expenditure on social welfare shall be properly controlled in relation to national objectives, and to total resources, otherwise the social services will become an incubus, and not an instrument designed to make life better. It is essential to remember that in the end the taxpayer must bear their entire cost, and, therefore, no responsible government could permit expenditure in one aspect of these services to expand uncontrolled, and with no element of stability.

When the pharmaceutical benefits scheme was first introduced, it was decided to supply certain very important drugs to the public without a direct charge. No one could have foreseen that drugs of this type, which then represented a small area of total prescribing, and were almost entirely specific in use, would, within a few years, have their numbers, uses and purposes enormously expanded by fresh discoveries which have, in effect, produced what can only be described as a therapeutic revolution in the treatment of disease. It became, on every count, impossible to restrict the number of “ free “ pharmaceutical benefits to a small range of prescribing and to retain as pharmaceutical benefits a relatively small number of drugs. Inevitably the number of both drugs and prescriptions, and indeed of indications for their use, has increased, and in recent years at an accelerated pace.

There have been inevitable concomitant increases in cost. In the early years, the scheme was comparatively stable, but with the discovery and development of new drugs this has ceased to be the case. In the first full year of operation, 1951-52, the cost was approximately £7,600,000 petannum. Although the number of included drugs was still relatively small, for the year ended 30th June, 1955, it had increased to £10,700,000. In the next year, it was £11,800,000, and in the following year it was £11,700,000. It will be seen that it was in a condition of comparative stability. However, it was after this that the list of drugs began to expand rapidly. In the year ended 30th June, 1958, the cost reached £15,000,000, an increase of over £3,000,000 in one year. In the last financial year, it was £21,000,000, and the projected cost for the next financial year is several millions higher still. It is obvious that at this rate, and still for a limited range of drugs, the cost of pharmaceutical benefits could soon exceed £30,000,000 a year, and would dominate the entire national health service, leaving correspondingly less room for manoeuvre for improvements and operalions in any other direction. May I emphasie again that every penny of this cost must be borne by the taxpayer, and that responsibility in government demands some attempt at stabilization in such circumstances.

The Government has, therefore, decided to make two changes. Up to the present there have been two separate pharmaceutical benefit schemes - a pensioner scheme and a general scheme. Under the pensioner scheme, the Government has provided, free of charge to the patient, a full range of drugs and medicines for social service pensioners who have been issued with a pensioner medical service entitlement card. So far as this scheme is concerned, no change is proposed. Pensioners and their dependants, who are enrolled in the pensioner medical service, will still continue to be eligible for a full range of drugs and medicines free of any charge.

Under the general scheme, the position has been that there has been a limited list of drugs which the public generally has been entitled to receive free of charge. When medicines or drugs not included in this list have been prescribed by doctors, they have been supplied by chemists at the expense of the patient concerned, this expense varying from a few shillings in the case of the cheaper drugs to considerable amounts in the case of more expensive drugs. What the Government now proposes is, first, that this general list will be very substantially widened so that it will cover practically the same comprehensive range as the pensioner list, and secondly, that a charge of 5s. will be made to persons, other than pensioners, for drugs prescribed by doctors from this general list. Considerable advantages will flow from this arrangement. For instance, instead of his present uncertainty, and sometimes anxiety, as to what it will cost him to obtain a drug or medicine prescribed for him by his doctor, every patient will now know what the cost will be. It will be 5s. or, in the case of cheaper drugs, the price the chemist charges.

I, of course, do not want to be understood to be promising that every prescription written for every patient will come within this new arrangement. In any scheme conducted by any government there would necessarily have to be some limitation of the range of drugs falling within it. I can, however, say that this new arrangement will apply to a very great majority of the drugs prescribed in the ordinary course of their work by doctors for patients. Broadly speaking, the range of drugs will be the same as that covered in the “ British Pharmacopoeia “ - the generally accepted official publication - with such additions as are recommended by the expert committee of doctors and chemists, which is known as the Pharmaceutical Benefits Advisory Committee. There will be some exceptions, but for the most part these will be in relation to drugs which, in the opinion of this expert committee, are not appropriate for use, other than for the treatment of a restricted list of diseases.

There are three groups of people who will be affected by the changes, and whose interests must be properly considered. I shall discuss each in turn, though the order in which I do so does not mean that I assign more importance to one than the other. First, the doctors. It is from this very wide range of drugs and medicines to which I have just referred that doctors will have a choice of what to prescribe for their patients, and within it a doctor will not be hampered in his medical discretion by any consideration of the cost of the prescription to the patient. He will know that the patient will have to pay no more than 5s. to the chemist for it. He will further know that there is no drug at all which the patient, unless he is a pensioner, can receive from the chemist free of cost altogether. In my view, this will greatly widen the doctor’s freedom of choice as to the best drug to prescribe for his patient, and should remove some of the pressures to which he i’s at present subjected.

I want to say that it is not to the discredit of any one that an inevitable effect of the development of the present system along the lines I have described has led to these pressures and to a considerable prescribing of expensive drugs without regard to their cost to the Government, or in other words, to the taxpayer. The Government believes that this widening of the area of choice for the doctor will be an advantage for him.

The second group is the pharmaceutical chemists, and this includes friendly society dispensaries. The private chemists have made representations to me, through the Pharmaceutical Guild, about certain apprehensions which they entertain. These are, firstly, that they may be subjected to what may be described as unfair competition from the friendly society dispensaries, which, as honorable gentlemen will be aware, conduct their business on different lines from the private chemist, and secondly, they are concerned about the price to be paid by the Government for dispensing pharmaceutical benefits. These are proper subjects to be raised, and there can be no objection to their discussion. Every one, Mr. Speaker, will want to see that they are settled on a basis of equity, and I believe that this is the view of both the private chemists and the friendly societies. I have, in fact, been engaged in discussions with both.

The bill accordingly contains provisions which authorize chemists to charge 5s. on each prescription and provides that it will be a condition of a chemist’s approval under the act that he follow a practice of doing so for prescriptions, except of course those written for pensioners with pensioner medical service entitlement cards. As a breach of a condition of approval makes a chemist liable to have his approval terminated, the legislation gives full effect to the Pharmaceutical Guild’s expressed request that the charging of the fee should be mandatory on chemists.

The bill provides also that friendly society dispensaries, like any other chemists, will follow the practice of charging the 5s. when supplying benefits to the public. Fees for prescriptions made up for the dispensaries’ own members will be included in the capitation fees paid by the members of the friendly society’s dispensary fund. The Government offers no objection to this method of charging the fees, and the bill accordingly authorizes dispensaries to follow this practice. It will, however, be necessary for the dispensaries to identify the member of the public from the member of the friendly society, and to treat him accordingly. Not only will strict administrative arrangements be enforced by the Government to ensure that this is done, but it will obviously be an interest of the friendly societies to do so; otherwise, in a short time they will forgo the collection of what will amount to very large sums of money.

The pricing arrangements are also under discussion between the Government and the chemists. The passage of the bill will not affect the continuation of these discussions, and all I need to say about them. Mr. Speaker, is that they can, I am sure, be brought to a conclusion on terms, which as I have said before in the House, will be fair not only to the pharmacist, but also to the taxpayer, and these arrangements will be identical both for friendly societies and private chemists.

The third group is the public. May I repeat what I have said before, that under any system the taxpayer, in the end, pays the entire cost. It is not in the interests of the public that a scheme of social benefit should be unstable and uncontrolled in the amount it costs. The direct participation of the recipient in the cost of such schemes will introduce an element of control and stability, otherwise extremely difficult to obtain. This is a major interest of the public and is therefore part of this arrangement. It is important that social welfare schemes should be the responsibility of all, including the beneficiaries, unless they are indigent.

It is also important that the burden of the recipient should not be too onerous. Arrangements will therefore be made to see that it is not. The Government believes that these proposals will introduce an element of stability and financial responsibility into the provision of pharmaceutical benefits, which is at present lacking. The Government does not claim, of course, nor does any one imagine, that there will be no further rise in the cost of pharmaceutical benefits. What it does claim, and on substantial grounds, is that these arrangements will be a major and effective step in reconciling the provision of social benefit, with responsibility in public finance, and with a maximum of professional freedom. We live in a changing world, Sir, and it is idle to imagine that the conditions of the past, or, indeed, those of the present, can be carried forward unchanged into the circumstances of the future. We must shape our policies and adapt our measures to fit changing conditions. Instruments of social welfare must be the servants and not the masters of those who use them. The doctrinaire mind, and the political label, are likely to be insufficient guides to action, and resiliency and adaptability become correspondingly important.

I believe, Mr. Speaker, that these measures are a very considerable improvement to the present national health service and I therefore commend the bill to the House.

Debate (on motion by Mr. Allan Fraser) adjourned.

page 2236

THERAPEUTIC SUBSTANCES BILL 1959

Bill presented by Dr. Donald Cameron, and read a first time.

Second Reading

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to make a machinery amendment to the Therapeutic Substances Act consequential on a similar amendment to the National Health Act included in the National Health Bill 1959, which I have just introduced.

The existing legislation provides that amendments to the British Pharmacopoeia, which is the generally accepted official publication of drugs and medicines, come into operation in Australia on the same date as they come into operation in England. As every amendment to the British Pharmacopoeia affects the list of pharmaceutical benefits, each change involves considerable administrative and printing work which takes some time to complete. To facilitate these arrangements, it is proposed in future that amendments to the British Pharmacopoeia will come into operation on a date to be fixed by notice published in the “ Gazette “. This arrangement will apply to amendments for the purposes of both the pharmaceutical benefits provisions of the National Health Act and the standards of purity provisions of the Therapeutic Substances Act.

This bill provides for the necessary amendment in relation to the Therapeutic Substances Act. The amendment will apply to the British Pharmaceutical Codex as well as the British Pharmacopoeia.

Debate (on motion by Mr. Allan Fraser) adjourned.

page 2237

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1959

Second Reading

Debate resumed (vide page 2231).

Mr SNEDDEN:
Bruce

.- Mr. Speaker, during the debate on this measure earlier to-day, honorable members on this side of the House were challenged in an extraordinary fashion. Opposition members suggested that no honorable member on this side would rise to support the bill. As an indication of the true beliefs of honorable members on this side of the chamber, Mr. Speaker, that is quite contrary to the facts. Honorable members on this side believe that this measure will do what it is intended to do - provide an incentive for the continuing growth of our economy and the maintenance of our national prosperity. At a time like this, when national expenditure is increasing, it is most necessary, when considering a measure of this kind, to keep in mind the need to maintain the tax yield. At the same time, it is necessary to keep a proper perspective and to make sure that the action taken by the Government to attract an inflow of capital and migrants for the growth of the work force and the development of our national capacity is properly balanced in order to provide an adequate incentive for the resident Australian taxpayer.

In the last few years, Mr. Speaker, there has been a considerable increase in the number of people employed in Australia. The natural increase of population resulting from the present level of the birth-rate, and the increase of population due to migration, have contributed, and will continue to contribute, to the increase in the work force. The remarkable increase in the number of people employed can be demonstrated in a number of ways. Perhaps the simplest way is to refer to the “Labour Report” for 1958, which indi cates the number of wage and salary earners in civilian industrial employment, excluding rural wage-earners, female private domestics, personnel of the defence forces, and national service trainees in camp, the figure being 2,081,700 in June, 1956, 2,085,000 in June, 1957, 2,097,500 in June, 1958, and 2,100,600 in December, 1958. The work force has been increasing for a number of reasons at a time when it has been necessary for us to try to reduce the number of people unemployed. We have now reached a stage at which the number of persons receiving unemployment benefit has decreased by 22,000 and the number of registrations for employment is 52,000. What has happened, Mr. Speaker, is that people who were formerly employed have taken up employment again and the persons added to the work force as a result of migration and the increase in the number of young people reaching working age, due to the population structure, have obtained employment.

Opposition members have suggested that this Government has maintained an inflationary policy. This is quite untrue, as can be amply demonstrated. For the sake of simplicity, perhaps it will suffice if I refer to the September issue of the “ Monthly Summary of Australian Conditions “, which is published by the National Bank of Australasia Limited. One short extract will suffice to demonstrate clearly that this Government is not pursuing an inflationary policy. Indeed, one of the major measures which it has recently announced is described in this publication as part of an antiinflationary policy. At page 3, the summary states -

The Federal Government’s decision to raise import quotas by £50 m. to an aggregate of £850 m. per annum is an anti-inflationary factor, but on present indications this will be counterbalanced, at least partially, by a budget deficit.

This indicates, Mr. Speaker, that the Government is not pursuing an inflationary policy and to suggest otherwise is merely to descend into the realms of fantasy.

The honorable member for Melbourne Ports (Mr. Crean), who led for the Opposition in this debate, made an amazing admission. He admitted that the incentive provided by the tax reductions will have a good effect on the economy and that tax reduction is a proper measure to take.

Indeed, it is the Liberal view that incentive should be increased. The honorable member for Melbourne Ports accepted that view, but subsequent Opposition speakers, of course, put the Labour view. They said that they want to increase taxes. The honorable member for Yarra (Mr. Cairns) even suggested that taxes should not have been reduced and that, instead, an equivalent amount should have been sent to South-East Asian countries. The Australian Labour Party wants not only to increase taxes but also to eliminate incentive. It wants to get back to its basic doctrine of socialism, which has always been its policy, and which has continually been rejected by the Australian electors.

The honorable member for Yarra insisted on referring to the tax reductions as the giving of money to certain people. Let us put this in its true perspective, Mr. Speaker. It is not a case of giving money; it is a case of removing part of the burden. Indeed, as far as I am aware, the relief will be spread over the entire range of taxpayers, and will be welcomed by the entire range of taxpayers. But the burden that remains must be borne because of the growing national expenditure.

In pursuance of his claim to be an economic authority, the honorable member for Yarra then said that it was most necessary, first, to increase public investment, and secondly, to increase social services. The honorable member cited to the House the relevant figures in relation to social services, which showed that the amount allocated for this purpose has risen from £121,000,000 in 1949-50 to £349,000,000 this financial year, which is nearly three times the amount that was paid formerly. If honorable members wish to relate the increase in social services to purchasing power, they can do so by referring to the C series index as contained in the Labour Report 1958. The figures indicate that the C series index rose by approximately 13 per cent, from 1954 to the September quarter of 1958. It is clear, therefore, having regard to the C series index, that there has been a real improvement in the value of social services.

The honorable member for Yarra has claimed that there should be more public investment, but public investment is in fact already increasing. The White Paper on

National Income and Expenditure, 1958-59, which is one of the Budget documents, indicates that the net expenditure by public authorities on goods and services in 1956-57 was £994,000,000, It rose to £1,041,000,000 in 1957-58, and increased again to £1,118,000,000 in 1958-59. It is interesting to look at a break-down of these figures. The expenditure on public works, excluding dwelling construction, increased from £439,000,000 in 1956-57 to £503,000,000 in 1958-59. There was an increase in expenditure on development and conservation of national resources from £35,000,000 in 1956-57 to £42,000,000 in 1958-59. So it will be seen that the two things for which the honorable member for Yarra has called, first, an increase in public investment, and secondly, an increase in social services, have already occurred.

He went on to say that £10,000,000 was to be given to persons receiving a salary of £2,000 a year and over whereas, in contrast, pensioners would receive an increase amounting to only £9,000,000. But the £10,000,000 which he claims will be given to certain people represents, as I have pointed out previously, a lessening of the burden, and this will provide an incentive for the people for whom the honorable member for Fremantle (Mr. Beazley) spoke subsequently, and for whom he asked that the burden be lightened. Honorable members will recall that he said that an investment in higher wages for them was an investment in skill. So, on the one hand, we have the honorable member for Yarra saying that the people should not receive the reduction in tax and, on the other hand, the honorable member for Fremantle saying that the people should receive more than they have been given.

The honorable member for Yarra then referred to a production increase of 2i per cent, a year. I should like to think that that figure is correct. We have seen a remarkable increase of production in Australia in the post-war years, but I doubt whether it has reached the figure mentioned by the honorable member for Yarra. Indeed, if it has, it is 1 per cent, a year higher than the production increase in the United States of America. According to Mr. Solomon Fabricant, a leading authority in the United States of America, that country is achieving a production increase of only li per cent. a year so, as I have said, if our increase is 2i per cent, a year our achievement has been truly remarkable.

The honorable member for Yarra spoke in a deprecatory way about housing, and I should like to place the matter in its proper perspective. The following comments appear on page 5 of the Whte Paper on National Income and Expenditure: -

The continued rapid increase in the imputed rent of owner-occupied dwellings and the very much smaller increase in the rent of tenanted dwellings reflects the continuing trend towards ownership as the main type of occupancy. Approximately half the houses built by State housing authorities under the 1956 CommonwealthState housing agreement have been sold, in addition to some of the houses built under the earlier agreement. Rental receipts by housing authorities increased by £2,500,000 in 1955-56 but the increase was only about £1,000,000 in 1957-58 and 1958-59. The increase of £28,000;000 in imputed rent in 1958-59 thus represents the rental value of nearly all the new dwellings constructed. . . .

The imputed rent is the amount which is imputed by the Statistician to owneroccupiers of houses. If any further confirmation were needed of the magnificent situation which has been reached as a result of Government policy, we need only look at the press release of 19th October, 1959, of the Minister for Labour and National Service in his capacity as acting Minister for National Development. It is in these terms -

The final figures of dwelling- houses and flats - construction released by the Commonwealth Statistician for the June, 1959, quarter confirm that during 1958-59 the number of houses and flats completed in Australia reached an all-time record level. Dwellings completed during the June quarter at 21,829 brought the total completed during 1958-59 to 84,158 houses and flats compared with 74,585 completed in 1957-58 - a rise of 12.8 per cent. The best previous year was 1954-55 when 82,110 units were completed. . . The number employed in the building industry at 30th June, 1959, that is, 119,937 has only once before been exceeded.

The honorable member for Yarra then made what is perhaps the most remarkable statement that has been made during this debate - perhaps, indeed, one of the most remarkable that has ever been made in this House. He said that personal income was not important as determining the level of savings, and that there was no validity in the argument that to reduce taxes would increase personal savings. In explanation, he said that there were only two sources of savings, first large corporations, and secondly, taxation revenue. Mr. Speaker, this is nonsense, and is contrary to the facts. The level of personal savings in Australia to-day is higher than it has ever been. If one needed any stronger proof of the value of tax reductions in promoting personal savings one has only to look at the report that will be submitted by the State Savings Bank of Victoria next year and compare it with the report for this year. The State Savings Bank of Victoria is only a small saver’s bank, because a person does not receive interest after his deposits reach, I think, £1,500.

Mr Bird:

– It is £2,000 now.

Mr SNEDDEN:

– Thank you. The amount that was deposited in the State Savings Bank of Victoria climbed to an all-time record last year. This organization has made a magnificent contribution to the housing programme in this record year. The position amounts to this: The personal savings of wage and salary earners that have been deposited in organizations such as the State Savings Bank of Victoria are making a very real contribution to the development of this country, to the housing of the people and to the provision of employment. It is most remarkable that the honorable member for Yarra should say that they are not important.

The honorable member for Yarra then sought to hoodwink the members of this Parliament by saying that company taxation Was this or was that or was something else. He cited a number of companies Which are earning certain profits. As I pointed out by interjection, the honorable member completely overlooked the amount that shareholders have invested in order to earn those profits. Mr. Speaker, I have had recourse to the “ Statistical Bulletin “ of the Commonwealth Bank of Australia which, at page 159, gives the profits made by 835 companies. Of course, as the report of the Commissioner of Taxation shows, there are well over 3,000 companies in Australia, including private companies. But this is a sample group and includes the great bulk of the big companies. It shows that in 1955 profits represented 10.4 per cent, of shareholders’ funds employed, in 1956 that percentage dropped to 9.4; in 1957 to 9.2 and in 1958 it remained stable at 9.2.

When considering this matter it is necessary also to remember that over the last three years in Australia we have seen a vast increase in the utilization of fixed interest moneys by companies. They have obtained finance, not by share raising, but by such methods as the issue of debentures and bonds.

Taking this into account we find that the percentage of profits to shareholders’ funds plus other moneys utilized in the business, has dropped even further than these figures indicate. The importance of this is that Australian companies are pursuing a deliberate policy of expansion in order that they may provide employment and develop the country in the way in which we all want it to be developed. If anybody seeks to find fault with that, there is something wrong with his reasoning.

The honorable member for Yarra went on to make a remarkable statement that will not appeal to a great number of people in Australia. He said that shareholders contributed nothing to this country. The truth is that shareholding in public companies has never been so widely spread in Australian history as it is to-day. Honorable members on the other side of this House constantly make statements which they hope will appeal to a number of people whom they hope to convince that they are getting a rough deal. The statement by the honorable member which I have quoted is a departure from the truth because company shareholdings in Australia are widely spread. I hope that the attention of shareholders will be drawn to the statement of the honorable member for Yarra that they contribute absolutely nothing to the country. This is quite the reverse of the truth. Shareholders risk their capital for developmental and expansion purposes. Without development and expansion we cannot absorb our growing work force, so shareholdings are of great importance to us.

The honorable member for Fremantle (Mr. Beazley) suggested that people’s capitalism constituted a monopoly of existing shareholdings. He said that there was a narrowing field of owners. Apparently, the honorable member for Fremantle does not know that stock exchanges exist. Apparently he does not know that shares are being transferred every day and that the ownership of companies changes from day to day. He has this extraordinary belief that once you are a shareholder in a company you retain your shares for ever more and receive an extraordinary rake-off. This is contrary to the truth. It is quite wrong for honorable members to make such statements seriously. He suggested that reserves and undistributed profits had increased remarkably. He cited the case of a company, although he did not give us its name, in which profits had increased by £1,250,000. He implied that its reserves and undistributed profits had also increased. But this is something new which is starting. Does he believe that companies can go on from day to day without making any provision for the replacement of plant? If he does, why did he not complain two years ago when depreciation allowances for companies were increased to allow this development process? The honorable member apparently was blithely unaware of it.

The honorable member for Blaxland (Mr. E. James Harrison) made a remarkable statement which, fortunately, he corrected. First of all, he said that 27,000,000 taxpayers in Australia were receiving less than the basic wage. Then he corrected the figure to 2,700,000. I am sure that he must have been talking about taxable income because he could not seriously have suggested that 2,700,000 people in Australia are receiving less than the basic wage. The work force of Australia is barely 3,000,000. Does he contend that only 300,000 people receive more than the basic wage? He was obviously talking about taxable income. Even in that, I think he probably erred because according to the report of the Commissioner of Taxation, at page 43, in the year 1956-57 the number of taxpayers who had an income of between £500 and £1,000 was only 1,600,000.

Mr Howson:

– He is looking at “ Hansard “ now.

Mr SNEDDEN:

– I hope that he gets that figure right. It could not possibly have increased by 1,000,000 in three years.

Mr Daly:

– Who told you this?

Mr SNEDDEN:

– This is in a very excellent book which has been provided for our information. If you spent a little time reading it you would have the figures, too.

The honorable member for Blaxland went on to say that costs had not been reduced and that this was because of the policy of the Government. If the honorable member for Blaxland cares to go to the Minister for Trade (Mr. McEwen) or to one of his staff and ask for the “ Survey of Manufactures “ a most excellent book published by the Department of Trade a few months ago and used as an exhibit by one of the honorable member’s colleagues before the Commonwealth Conciliation and Arbitration Commission to demonstrate the capacity of industry in Australia, he will find some interesting facts in it. [Quorum formed.] I am grateful to have some more members of the Opposition here to hear the point to which I now want to direct attention. At page 32 of the report of the Commissioner of Taxation is shown the changing percentage of total revenue that is represented by income tax and social services contributions. From the year 1951-52 this percentage has been moving constantly downwards. In 1952-53 it was 78.9 per cent.; in 1953-54, 77.7 per cent.; in 1954-55, 77.6 per cent.; in 1955-56, 77.2 per cent.; and in 1956-57 it had dropped to 76.4 per cent. That constant decline in the relationship that income tax and social service contributions bear to total revenue is an achievement by this Government.

I believe that this bill will provide the continued incentive that is so necessary for the proper development of this country. An extraordinary pattern of population is about to overtake us. Within the next few years there will be a substantial increase in the percentage of school leavers, who will be joining the work force and seeking work. The Government has indicated its intention of maintaining its immigration policy and all of the immigrants will have to be absorbed into the work force and have work provided for them. This can be achieved only by providing a proper incentive for the development of our community, whether it be in the private sector or the public sector, to the wage and salary earner, the selfemployed person, the private company or the public company. It is the policy of this Government to provide such an incentive, and I believe that this bill will achieve that end.

Mr THOMPSON:
Port Adelaide

– The debate on this bill has highlighted the differences of opinion that exist between this side of the House and the Government side as to the best method of raising revenue.

Mr Harold Holt:

– That is why you are over there.

Mr THOMPSON:

– I say to the Minister that it brings out very clearly the difference of opinion on how moneys should be raised. Taxation has always been recognized by people who have thought the matter out as a means of evening up the distribution of the wealth of the country among the people. That is, those that have plenty should make the greatest contribution to assist those who have the least. I do not intend to go into the question of company taxation, which has been dealt with by the honorable member for Bruce (Mr. Snedden). I realize that company tax comes from the profits of companies. It is not a tax on the capital that is invested but on the profits that are made. When we examine the position we realize that the profits come from the consumers who buy the goods that are made by the companies. Consider the case of a big retail company, such as the Myer organization in Melbourne, or David Jones Limited in Sydney. The people who buy the goods of these companies are really the ones who make the profit for them, and accordingly it is these people who are really paying the company tax.

Mr Opperman:

– The profit is made by efficient merchandising.

Mr THOMPSON:

– It is not a matter of efficiency. The profit is the difference between the price at which a company buys goods and the price at which it sells them. The profit does not come out of capital; it comes out of the trading operations of the company, from the people who trade with the company. When a comparison is made of tax collections and it is said that the man at the bottom of the income scale pays only so much while the man at the top pays so much more, one loses sight of the fact that much of the tax paid by the man at the top may come from company dividends that are paid from the profits provided by the little man at the bottom. I think honorable members recognize that fact.

Mr Anderson:

– I do not.

Mr THOMPSON:

– You do not? Where does the profit come from?

Mr Anderson:

– It is made through giving service.

Mr THOMPSON:

– If a company added only 5 per cent, to the cost to it of the goods it sells, the company could not carry on. It may find that the addition of 10 per cent, will not provide sufficient profit to allow it to carry on and give an adequate return on the investment. So the company determines what percentage must be added to the cost of goods in order that the sale price will be sufficient for its purposes.

Mr Opperman:

– You make it appear too simple.

Mr THOMPSON:

– Whether or not I am making it simple, the plain fact is that the man who is producing the goods is the man who does the work and he is the valuable man to the community. I am not decrying the value of companies. Do not think for one moment that I am. I recognize the good that a company can do if it proceeds in the right direction. Yesterday, the honorable member for Mackellar (Mr. Wentworth) said that we should do more for the family man. That is the man with whom I am concerned, whether he be a railway employee or a man in business getting a fair income. I say that the family man, in whatever sphere he is, should receive more consideration than we are giving him to-day. I rose mainly to mention a couple of matters to which the Government should give greater consideration.

If I had any say in our financial affairs, I would not reduce income tax by 5 per cent. To-day we passed a bill to enable the Government to get short-term money with which to meet its Budget deficit. To reduce income tax while budgeting for a deficit is not to do the best thing for the country. The ordinary man will not gain enough from the reduction in income tax to make it worth while. Let us consider the case of a working man, with a wife and two children, in receipt of f 15 a week, which is a little over the basic wage. His annual income is £780 a year. He is allowed to deduct £299 for his wife and two children, leaving him a taxable income of £481. I am leaving out of consideration medical and other expenses for which he might claim deductions. On a taxable income of £481 a year, his tax is £25 a year. At the reduced rate of tax he will pay 25s. a year less, so every week in his pay envelope he will receive 6d. a week more. An additional 6d. in the pay envelope of a man on £15 a week means nothing to him. It is not worth considering, so far as the man at the bottom is concerned.

Let us take a man on a little higher salary. I am not trying to make a distinction because one man gets more than another; I am trying to show how this measure will affect people on various salary ranges. A man receiving £2,000 a year, after deductions, pays £376 in tax. Under this measure his tax will be reduced by £18 15s. a year, which is about 7s. a week. Can any one convince me that a reduction of 7s. a week in his taxation will mean much to that man?

There is little substance in this talk about reducing taxation in this manner.

I find that a person receiving £6,000 a year has to pay a tax of £2,251. That man will receive quite a considerable benefit under this measure, but I will not argue about him because I do not think he needs much consideration. Instead of reducing his rate of taxation the Government would have been doing something far better if it had increased the allowances to the family man. Everybody knows that the cost of living has increased, and if it was good enough three or four years ago to allow the family man a deduction of £143 a year for his wife, it is about time that that deduction was increased. The basic wage earner living with his wife in a small cottage cannot afford to get many of the luxuries of life and he will not get a great deal of benefit under this proposal. It is again the man on the higher salary who has to spend a bigger ratio of his income on his home who will receive more benefit. It is the highersalaried man, whose tax will be reduced by 13s. or 14s. a week, who will gain the most advantage.

It is time that the Government woke up on this matter. This is not a new subject to me. Several years ago I suggested that the allowance for the wife and children should be raised by 50 per cent.; it went up by 25 per cent, and a little higher later. But it has not gone up this year at all. This allowance should have been increased years ago. If this Government could not have done anything else, it could have helped the family man by increasing the deductions for wife and family. At the present time a man with a wife and two children is allowed a deduction of £143 for his wife, £91 for the first child and £65 for the second child, a total of £299. That is the estimated cost of keeping a wife and two children for a year.

A single man is allowed £55 15s., but if any one examined the comparative costs of living of a single man and those of a family of the size I have mentioned, it would soon be found that it costs a lot more, proportionately, for the family to live. Greater consideration should be given to the family. Even if the allowance had been increased by only £13 a year it would have been some help to the family man. If the deduction were thus raised to £338 for a man with a wife and two children he would be allowed £39 a year extra deductions and for a worker receiving £15 a week this would be a welcome lift.

I feel that the Government is not dealing fairly enough with the family man. The Government claims that it has reduced taxation, but the figures show that this will result in greater revenue. According to the Treasurer’s statement, the actual amount received by the Treasury in income tax revenue last year, in round figures, was £388,000,000. Yet, allowing for this reduced taxation, the Treasurer expects to collect £431,000,000 this year. How does this come about? We know that our work force has increased and that there has been a general wage rise of 15s. a week. These are the two main sources of the increased revenue. If a man is receiving £900 or more a year clear he has to pay £87 on the £900 and 3s. lOd. in the £1 on the remainder of his taxable income. Many people who have received the 15s. a week wage increase will have to pay 3s. a week of it in taxation. Although the Government says it has reduced taxation, workers earning £1,000 a year will benefit by only 18d. a week such reduction.

It would have been better for the Government to have left the tax rates as they were and used this £20,000,000 that it proposes to give away, resulting from this tax reduction, to provide extra benefits for the family man. Throughout the world, in every country, men in public positions contend that the real future of a nation is bound up in the welfare of the family unit rather than in the careers of single men and women. Honorable members on both sides of the House would agree with that. Churches, politicians and social welfare workers all agree that the real standard of living in any country is set by the standard of living of the family unit.

A great deal has been said about the profits being made by big companies, and particular reference has! been made to General Motor-Holden’s Limited and the amount of profit that has been sent to its parent company in America. Honorable members do not hear me arguing in that strain. When that company was encouraged by the Chifley Government to come to Australia, certain agreements were made concerning its profits. The Government asked it to plough back a proportion of its profits into the industry instead of sending them all overseas. If a company ploughs back a comparatively high proportion of its profits to build up its assets, naturally its initial capital will be low in relation to its subsequent overall financial resources. If General MotorsHolden’s Limited had not established itself and flourished in South Australia, in my electorate, other motor manufacturing concerns such as the Chrysler-Dodge manufacturers and the Volkswagen producers would not have been encouraged to establish their works in this country. If these companies had not come here, Australia would have had to buy the vehicles they produce overseas instead of their being built in this country. But because they have come here, a major industry has been established in Australia providing employment for many thousands of Australian workers.

Apart from the firm of General MotorsHolden’s itself, throughout the various suburbs of Adelaide one may see little businesses that have sprung up here and there to make parts for that company. The company has not undertaken the manufacture of all the parts it needs in its own works. Considerable quantities of parts are supplied to it by engineering firms and other businesses.

I feel that the community has gained a wonderful asset as a result of big companies being established here. In some instances, I believe that they are making bigger profits from the sale of the articles they manufacture than they need to do. I think that the price of the Holden motor car is too high and that General MotorsHolden’s Proprietary Limited should knock a considerable amount off the selling price of the vehicles it manufactures. However, I shall not argue as to the amount that should be knocked off the selling price because it may be found that the manufacturers of other motor vehicles would find it even harder to compete against the Holden than at present. I point out that, by producing Australian motor vehicles, General MotorsHolden’s Proprietary Limited has forced down the price of other vehicles, including imported motor vehicles. It must be recognized that when a big company that has been encouraged to establish itself in Australia makes a success of its activities, that fact alone helps to bring about a reduction of the prices that we are paying for similar articles or commodities elsewhere.

Tt has been contended that large amounts of dividends paid by big companies that have become established here are remitted outside Australia and that in consequence our income from taxation is reduced considerably. Of course, this is offset by the investment of additional amounts of foreign capital in this country. Some three years ago I warned the Government that if we entered into an agreement with certain nations to obviate double taxation of company dividends, we would have to be very careful to see that we did not reach a stage where too much of the produce of this country would have to be sent overseas in payment of interest on foreign capital invested here. It is commonly known that we send, not Australian pounds, but primary products to America or to England in payment of interest on investments by those countries in Australia. Therefore, when we are considering the incentive that we should offer by way of interest payments to foreign investors to invest in this country, we must realize that we are building up a commitment which in the future it may be very hard for us to meet.

The honorable member for Melbourne Ports (Mr. Crean) dealt very thoroughly with this aspect of the matter, and I should just like to say that the views that he expressed are endorsed by the Labour Party as a whole; he did not express only an individual opinion. The submission that the honorable member made has been fully explained to the members of the Australian Labour Party and we believe that its adoption would be in the best interests of the community. The honorable member for Melbourne Ports also expressed the view of the Labour Party when he addressed himself to the previous measure - the In. come Tax and Social Services Contribution Assessment Bill (No. 2) 1959. On themeasure to come before us concerning in-, come tax concessions in relation to capital invested in oil exploration companies, thehonorable member will show how thosecompanies are being relieved of income tax. The views that he has expressed are, webelieve, very sound and their adoption would be in the best interest of the community.

I should not like honorable members on the Government side to think that I am having a smack at them merely because they are doing things differently from the way that I should like to see them done. I am convinced that they think that what; they are doing is the correct thing to do, and until the people of Australia are pre-, pared to elect Labour to office, the Govern-, ment will do what it desires to do - and inits own way - because it has the numbers..

I have endeavoured to indicate relativelysmall things that the Government could doin this matter, because I realize that only such proposals by the Opposition would beentertained by the Government. I think that the matters that I have pointed outshould be rectified. I feel that it is incumbent on me to point out things that I consider the Government should do; if it does, not see fit to adopt my suggestions now, itmay do so at a future date. However, r say to the Government: For goodness sake, when you are bringing in another taxationrates bill, think of the family man a littlemore than you have done this time! I havetried to indicate the manner in which moregood could have been done for the little men of the community with the amount of’ £20,000,000 than by reducing income tax by 5 per cent. I do not think that taxation should be reduced when the Government is budgeting for a deficit. I think that that is one of the worst things to do. Somepeople may say that it is good to budget for- a deficit, but I do not think that it is. I believe that, as Mr. Chifley said on one occasion, in prosperous times and when conditions are good we should put something away for a rainy day that may come later. I remind the supporters of the Government that honorable members on this side of the House receive letters of protest about various forms of taxation just as they do. and we understand the pressures that are brought to bear. Of course, each section of the community naturally approaches the matter from its point of view. Let us be big enough at all times to do, not only what one particular section of the community wants done, but what is best for the country as a whole. In conclusion, I urge the Government to keep in mind at all times that the family unit is the greatest asset that any country has.

Mr McMAHON:
Minister for Labour and National Service · Lowe · LP

– in reply - Mr. Deputy Speaker, the criticisms of the Opposition, as I understand them, fall into two parts. First, criticism has been made of the Government’s decision to reduce personal income taxation by 5 per cent. The statement has been made that this reduction is inequitable in that it differentiates as between various sections of the community - the section that the Labour Opposition likes to call the wealthier section, as against the basic wage earners. The second point that the Opposition has tried to make is that there has been an increase in the percentage of revenue that is derived by indirect taxation and a reduction of the percentage that is derived by way of income taxation, both company and personal, in relation to total receipts from taxation.

Let me refer to the first of the Opposition’s criticisms. When it debates the 5 per cent, reduction in personal income tax, it should consider it against this background: There has been an increase of 7s. 6d. a week in pensions. The Commonwealth Conciliation and Arbitration Commission has increased the basic wage by 15s. a week, thus adding £50,000,000 to the purchasing power of the community. We have before the House to-night certain proposed changes in the National Health Act and in the Pharmaceutical Benefits Act. We cannot consider this bill in isolation. It is wise to look at it against the broad background of the Budget provisions as a whole and - and this is more important - of what has been done over the period of years in which this Government has been in office. For these reasons I suggest to the Opposition, and to every person who listens to this debate, that the bill should not be looked at in isolation. One can get a totally false impression looking at it in that way. The proper way to look at any single item in a budget is against the general background and over a period of years.

What is proposed in the bill now before the House? It is that personal income tax shall be reduced by 5 per cent. The Opposition claims that this is discriminatory. It also claims that in some sense it is a regressive measure in income tax law. What is the philosophy behind the Government’s taxation policy? It is clear. We start from the basis that the individual who earns an income is entitled to retain as much of that income as the Government can permit him to retain. We do not believe in a general levelling out. We think that the man who has the initiative, does the job and earns an income reward should progressively obtain the benefit of what he earns. We see no good purpose whatsoever in reducing every one to a common level. The argument put forward by some members of the Opposition is to the effect that there should be general levelling out through taxation, so that we bring everybody on to a common plane. lt is true that when applying its philosophy the Government must keep in mind the necessity for the country to pay its way. The Government is responsible for a great number of services necessary for the development of the community, such as education, housing, national developmental works, ports and railway facilities. The Government must make adequate provision not only for the services now in operation, but also for the development of the country in the future.

There is a second principle that is applied in taxation. It is the principle of progressive taxation, which involves placing the greatest burden on the person most able to bear it. The Government’s taxation policy is not based wholly on the principle of ability to pay, because that would involve a levelling out process. The Government believes that the person in the best position to pay should bear the heaviest burden of taxation, and should contribute most towards development and towards the assistance of those who are in need.

The Opposition claims that the proposals before the House are regressive. In particular, the honorable member for Blaxland (Mr. E. James Harrison) claims that this income tax law does in fact adversely affect the basic wage earner. Since the honorable member made his speech I have taken the trouble to investigate the position, and I think that his argument, and one frequently put forward, that income taxation is depressing the living standards of the wage earner is based upon a fallacy. In support of the argument it is frequently pointed out that while in 1949 the basic wage was £340 a year, it is £718 in 1959-60, but that, because of the progressive rate of income tax, the single basic wage earner must now pay Ti per cent, of his income in taxes, while in 1949 he paid only 5 per cent. The claim is made that the basic wage earner is, therefore, worse off to-day than he was when the Chifley Government was in office. This argument completely ignores the fact that both the basic wage and average weekly earnings have increased more than prices during the period from 1949-50 to 1959-60. Prices shown in the C series index have increased by 81 per cent., but the basic wage has increased by 111 per cent, and the average weekly earnings by 118 per cent, over that period.

If you care to put the matter in practical terms, Mr. Deputy Speaker, you can take the case of a man, with a wife and two children, who earns the basic wage. In the financial year 1949-50 his income, after taxation, would have been £339, while in 1959-60, under these proposals, it will be £70.1. This shows an increase of 107 per cent.

The argument may be summed up in this way: The income of a basic wage earner, with a wife and two children, after taxation, has increased by about 106 per cent. The income of a taxpayer receiving average weekly earnings has increased, after taxation, by 110 per cent. Prices, as given in the C series index, have in creased by only 81 per cent, over the same period. We come, therefore, to the irresistible conclusion that the salary or wage earner has received an increase in real income, after taxation, of about 16 per cent. I believe this completely destroys the argument of some members of the Opposition - not, it is true, of the honorable member for Melbourne Ports (Mr. Crean) - that the taxation legislation is regressive and operates against the best interests of the basic wage earner and of other wage and salary earners.

I could give many other examples, but I do not wish to pursue the matter further. The important question is this: Is the man on the basic wage better off than he was in 1949-50? I do not want to repeat the words of people in other countries, such as Mr. Macmillan, the Prime Minister of Great Britain. I believe, however, that every person in this House who knows the people, and who cares to go out and ascertain the facts for himself, will say that the basic wage earner has never had it better. I believe that this adequately sums up the present position in Australia. Not only has the basic wage earner never had it better, but, in fact, the whole community has never had it better. That is why the Menzies Government is now in office and why it will stay here, I believe, for at least another nine or ten years. I am pleased to see that my colleague, the honorable member for Mallee (Mr. Turnbull), who has not looked his usual self for the last couple of days, is now smiling and applauding loudly at the thought that he will be occupying a place on this side of the House for many years to come.

Let me turn to the second part of the Opposition’s argument. It is claimed that because there has been an increase in the proportion of taxes raised by indirect taxation and a reduction in the proportion raised by personal taxation, the Government is against the average man and for, as it were, the tall poppies. I do not refute the figures that were used by the honorable member for Melbourne Ports; I accept them as accurate. I do say, however, that we cannot consider the taxation mechanism as merely a means by which we can deprive a person of a portion of his income. Taxation has a two-fold purpose. First, of course, it is a levelling out process, but it is also one of the great means by which the Government can achieve its objective of economic health and full employment and by which the country can develop its economic power and strength. We must use the Budget for those purposes. There are very few instruments we can use. There are very few means available to the Government for influencing the economic climate. We have the central banking mechanism, which is a dwindling- means of achieving the objectives of the Government, and we have our national development programmes, but when we analyse the problem effectively the. logical conclusion is that the. real instrument for sustaining the economic health of the country and for doing the things that the Government knows must be done if the work force - which is increasing at the rate of 80,000 a year - is to be absorbed is the- Budget itself.

It is misleading to- look at one budget and say, “ You are increasing indirect taxation and proportionately reducing direct taxation”. The simple fact is that if we want to achieve our objective of a relatively stable currency and if we want to protect our foreign balances, the Budget has to be used. Sometimes indirect taxation has to be increased, and at other times direct taxation can be reduced. One example of what I have in mind is the increase in the duties on motor vehicles. That increase was made for a specific economic, purpose - to try to reduce the rate of increase in the consumption of petroleum products. It was imposed for a purpose, and it achieved that purpose. Last year we went - I use the phrase of the politician - perilously close to achieving a balance of payments, because the Government took timely action, in a way that it considered appropriate, to see that the drain on our foreign exchange was diminished.

It is of no use for the Opposition to pick out an isolated case and say, “ Look at the effect of that”. I am surprised that the honorable member for Melbourne Ports (Mr. Crean) has dealt with taxation in isolation, because he knows better than to do that. 1 am sure that he personally is convinced that you use the taxation mechanism to achieve the best results for the country as a whole. You use it, not because you think that at a particular time one section of the community should have restrictions imposed upon it which ultimately will be beneficial to all, but because you think something can be done that in the long run will help the country to develop and will add to the wealth of all. Therefore, I submit that the arguments that have been put up by the Opposition have failed.

There is one real test, and that is the satisfaction of the Australian people. I do not want to be too political about it. Honorable members opposite can make up their minds as to how satisfied the Australian people are, but I will give the House some figures showing the disposable income of certain persons after paying income tax. A person earning £500 a year has, if he is a single man, 99.5 per cent, of his income left for himself after paying his income tax, but if he has a dependent wife and two children and, therefore is receiving child endowment to the value of £39, his disposable income is 107 per cent, of his personal income. That, Sir, is the true measure of the satisfaction of a working man earning £500 a year. It is the true measure of what the Menzies Government has done to ensure that the person on the lowest wage - the man most in need, the family man - is justly treated. Here is a positive gesture and a proof that this Government, more than any other government, considers the interests of the basic wage man and the family man to be of paramount importance.

I could go right through the figures. The man earning £1,000 a year retains 98.8 per cent, of his income as disposable income, the man earning £2,000 retains 88.5 per cent., and the man on the enormously high income of £10,000 retains 58 per cent. We talk about satisfaction and personal comfort, and about the ability of a person to live happily. The figures that I have given prove that the people of Australia have that capacity. They indicate that to-day the basic wage man and the man in the middle income group are better off than they have ever been. Again I take a phrase from the Prime Minister of the United Kingdom and say that they have never had it better.

Of course we do our best to ensure that those most in need are given what is regarded as fair and reasonable, but we realize, too, as my colleague has just said, that if this country is to be developed, incentives must be given to those who do the work, and to those who provide the management and the capital for future prosperity and future development. After my colleague, the Treasurer, had announced the 5 per cent, reduction in personal income tax, I heard that proposal referred to as a breath of fresh air in what could otherwise have been a somewhat depressing Budget. It was a courageous action. He took a calculated risk. It is obvious now that he was right, but nonetheless he took that calculated risk, and I personally compliment him on the proposals that he has brought before the House.

I sum up in this way. Obviously the Labour Party has not learnt any lessons from the results of the last five federal elections in this country. It has not learnt the lesson that it should have learnt from the results of the recent election in the United Kingdom. The people of this country want development. They know that under the present Government we have achieved that development. They know that their prospects are brighter, but they do not like the idea of somebody buying their votes. They do not like the idea of somebody offering them something a little bit better in the hope that at the next election they will vote for him. They do not want the doctrine of class warfare thrust down their throats. They know thatthere are no classes in this community. They know that gradually all class distinctions have ceased to exist and that now we are all Australians with a common objective, each trying to help his neighbour and each working so that Australia can achieve the destiny that is before it. I put it to you, Sir, that the arguments of the Opposition in support of this amendment have no basis. I think the proposals made by the Treasurer should be supported. I am confident that they will receive the support of the vast majority of the members of the House.

Mr UREN:
Reid

– I rise to support the Opposition’s proposition that this £20,000,000 tax reduction is outrageous.

Motion (by Mr. McMahon) put -

That the question be now put.

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

AYES: 44

NOES: 29

Majority . . . . 15

In division:

AYES

NOES

Mr DEPUTY SPEAKER:

– Order! I will not deal with any problems during a division.

Question so resolved in the affirmative.

Mr DEPUTY SPEAKER:

– I should like to mention to honorable members that this is the successful conclusion of the hundredth division this year.

Question put -

That the words proposed to be omitted (Mr. Crean’s amendment) stand part of the question.

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

AYES: 48

NOES: 29

Majority . . 19

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

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

page 2249

PETROLEUM SEARCH SUBSIDY BILL 1959

Second Reading

Debate resumed from 1st September (vide page 772), on motion by Sir Garfield Barwick -

That the bill be now read a second time.

Mr POLLARD:
Lalor

.- This bill is designed to encourage the search for petroleum in Australia by subsidizing stratigraphic drilling and certain other operations. When introducing the measure, the Attorney-General (Sir Garfield Barwick) outlined the Government’s policy for the encouragement of oil drilling and oil search in Australia. That policy is to subsidize certain companies whose programmes are approved by the Government as suitable for oil search operations in Australia. The Opposition believes that the search for oil in Australia should be carried on most actively. No Australian can consider the huge sums spent on purchasing oil from other countries of the world without being alarmed about the economic effect of the expenditure on this country. More important still, he cannot help but appreciate the value of having oil supplies within Australia’s own territory if our security should ever be endangered.

When this Government introduced a bill in 1956-57 for the payment of subsidies to approved oil drilling companies, on lines similar to the bill before the House to-night, we of the Opposition supported it. Since then, however, our experience and observations have led us to believe that this method of encouraging the search for oil in Australia is not satisfactory. The Government’s proposal is that subsidies shall be payable during 1959-60, 1960-61 and 1961-62.

When examining oil search programmes and the subsidies paid so far, we should remember that a vast amount of paper work is involved in policing the provisions of the act relating to entitlement to subsidy. The Department of National Development is the department concerned with the administration of the act. The secretary of the department is the officer named as the responsible departmental officer. Very great responsibilities devolve upon him. He is dependent upon the Bureau of Mineral Resources, Geology and Geophysics, which, in its turn, is dependent upon examinations carried out by the field staffs. There is a circuitous, prolonged and costly administrative process.

We of the Opposition believe that, in view of all the factors involved, this problem would be better tackled by extending the operations of the Bureau of Mineral Resources. When one examines the excellent brochure compiled by the bureau, one finds that, in the main, the companies that have drilled for oil in Australia up to the present are dependent almost exclusively On the information obtained, collated and provided by the bureau. In addition, they are dependent upon the Division of National Mapping, which is associated with the Bureau of Mineral Resources. We believe that a return to the policy pursued by the Labour Government would be wise, for then all the policing, examination and circuitous administrative operations now involved in the payment of subsidies would be eliminated.

The information on which drilling teams decide where to drill for oil is the result of work done by officers of the Bureau of Mineral Resources. In those circumstances, we believe it would be more direct and more satisfactory if the Bureau of Mineral Resources went on and completed the whole job. We believe that that would eliminate something which, unfortunately, has been associated with the history of the search for oil in every country in the World. It would obviate to some extent at least, as far as the Government’s activities were concerned, the rather shocking element of gambling that has entered into the search for oil. The Labour Party does not for a moment suggest that private companies should be prevented from drilling for oil. But we suggest that not one of them at present drills for oil in Australia by reason of the subsidy alone. They have i much greater inducement to find oil.

We do not think that it is necessary to subsidize the search for oil, particularly when it is remembered that the recent taxation legislation passed through this House, which was opposed by the Opposition, provides generous remission of taxes to large companies engaged in oil exploration. We feel that many wealthy companies, both Australian and overseas companies, will quite unnecessarily and undeservedly draw subsidies and receive the benefits of taxation remissions.

Mr McMahon:

– The honorable member is opposed to the subsidy provision in the bill, is he?

Mr POLLARD:

– Yes, and we expressed our objection to the taxation remissions provided in the legislation recently dealt with by the House. We oppose both items.

Mr McMahon:

– The honorable member is against the subsidies provided in this bill, is he?

Mr POLLARD:

– Yes. We are not opposed to these companies operating in Australia. We feel that they will operate without the benefit of subsidies, because the inducement to find oil is great. In the first place they would not risk anything unless they believed that the information supplied to them by the Bureau of Mineral Resources, Geology and Geophysics was at least good enough to warrant a gamble on their part. That being so, why should the taxpayer be asked to provide subsidies for these companies?

Let me deal with the allegation that these subsidies are necessary in order to attract companies to the search for oil. Recently, I perused the annual report of Australian Paper Manufacturers Limited. That is a very great company with capital of approximately £29,000,000. It has an almost complete monopoly of the manufacture and sale of paper in Australia. As far as I am aware the organization is very efficient and provides good working conditions for its employees. It is able to do that because of its ability to fix its own price for its products. Yet this great, secure and wealthy monopoly will be subsidized by the Government in its search for oil. It will receive remissions of taxes for the money that it has invested in the search for oil.

Mr Timson:

– The company probably would not drill at all but for the subsidy.

Mr POLLARD:

– Does the honorable member say the company has no patriotism at all? This company is not drilling for fun. It will not risk £48,000 if it does not think there is a reasonable chance of finding oil, following the investigations carried out by the Bureau of Mineral Resources, Geology and Geophysics. This company is prepared to gamble on finding oil, and for honorable members opposite to suggest that it is lacking in patriotism is belittling this great organization. In its annual report the company states -

page 2251

GEOLOGICAL EXPLORATION

The Company is planning to drill a strati- graphical bore hole in an area that it holds under a petroleum prospecting licence in Gippsland, Victoria. The purpose of this bore is to determine the thickness, character and age of rock strata at greater depths than have yet been drilled in the area, thereby contributing to the geological knowledge and aiding the search for oil.

Since the Company has large interests in Gippsland it is appropriate that A.P.M. should assist in this search as the finding of gas or oil there either by the Company or by anybody else would be of considerable benefit

The Commonwealth Department of National Development has approved our proposal for a drilling operation which will be undertaken by A.P.M. Development Pty. Ltd., a wholly owned subsidiary, formed after the end of the financial year. Subject to the Minister’s approval, an agreement will be entered into with the Commonwealth providing for the payment of a subsidy, on a £1 for £1 basis, not exceeding £48,000. The expenditure envisaged by the Company is expected to be of the same order and will be deductible for income tax.

It is emphasized -

I want honorable members to note this - that the purpose of undertaking this drilling is to provide geological knowledge at depth without any immediate expectation of finding oil.

The company does not add that ultimately it may find oil. It does not deny that it hopes to find oil. The point I make is that Australian Paper Manufacturers Limited will invest £48,000 in a subsidiary company to search for oil. I assume that it is a company paying 7s. 6d. in the £1 company tax. So, on an investment of £48,000 the company will receive a tax remission of about £18,000. In addition, it will receive from the Government on the £1 for £1 basis a subsidy of £48,000. That means that this wealthy Australian company will receive from the Government approximately £66,000. Can anybody deny that that is a very generous subsidy to a company which, in view of the information supplied by the Bureau of Mineral Resources, Geology and Geophysics, would be prepared to bore for oil in Gippsland in any case? Gippsland is on the fringe of the great brown coal deposits of Victoria. In the basin, at Lakes Entrance, oil has already been proven. From 1942 onwards the Labour Government undertook the work of looking for oil. On the advice of American oil experts, it put down a shaft 30 feet or more in diameter and 1,200 feet deep. Its purpose was to drill horizontally into the oil-bearing sands at Lakes Entrance. That work cost a lot of money and had to be abandoned, but the fact that oil has been proven in that area suggests that Australian Paper Manufacturers Limited will be investing practically nothing, and will have at least a gambler’s prospect of striking oil. That sort of thing will be repeated throughout Australia by companies - which are strong enough to stand on their own - if a recommendation for assistance is made by the secretary of the department and approved by the Minister.

Surely, Mr. Deputy Speaker, we should be spending our money to better effect if we went further than we have done and put capital into the purchase of suitable drilling rigs and acted on the advice that our own experts have already collected. Other available advice could be studied also. The Government could operate drilling rigs in suitable locations in Australia or in the Territories. It would not, of course, operate to the exclusion of every one else. Drilling operations demand mechanical skill and the capacity to interpret information supplied by the bureau, but the actual drilling operation can be carried out, with little difficulty, by skilled and semi-skilled men. I have seen drilling rigs in operation in America. In principle, drilling for oil is similar to drilling for water, though on a much larger scale. Oil drilling has been going on for so long now, and the equipment used has reached such a stage of perfection that in the United States there is no difficulty at all in obtaining suitable gear for undertaking exploratory work, with the prospect of striking oil.

The United Kingdom has, during the last 100 years, engaged in oil drilling operations throughout the world. Its mechanics and designers are, perhaps, the best in the world. I doubt whether there would be any difficulty in purchasing oil drilling rigs suitable for Australian conditions. Drilling companies floated here or elsewhere must purchase efficient and uptodate rigs. The Government can do likewise. The end cost would probably be no greater than that of the subsidies that are to be provided to companies which would undertake drilling in any case. That is an obvious conclusion.

The essential requirements for successful drilling are, first, topographical mapping. Who undertakes that, if not the bureau of Mineral Resources, Geology and Geophysics, using the taxpayers’ money? Another requirement is geological survey. Who does that, if not the bureau? Certainly the companies which have been subsidized in the last year or two have supplied the results of geological surveys to the bureau; indeed, they are obliged to do so. Another requirement is geophysical survey - drilling for information, and drilling for production. That, too, is already done by the bureau. All this requires time, money and effort. The Government is to provide the information and the money, so it is sheer waste to subsidize companies which would be drilling in any case.

A Labour Government set up the Bureau of Mineral Resources, and thus indicated its belief in the future. The bureau was to co-operate with the State mines departments in providing technical assistance and advice to the industry. It was to carry out, continually, regional, geological mapping and scout drilling. To that end the Government bought a drilling rig, but the present Government - anxious to evade its responsibility - sold that at a gift price. Only in recent years has the Government brought forward proposals for subsidizing private drillers.

Earlier, some honorable members seemed surprised when I referred to the scope of the work in Gippsland. I have the figures before me now. Horizontal drilling was undertaken for 1,200 feet. It had finally to be abandoned. It is true that the Government provides the necessary laboratory equipment, and technical and administrative staff to undertake the necessary research into the composition of cores obtained in the search for oil. I have seen the laboratories equipped for that purpose.

As the drill penetrates the various rock structures it is possible to say whether a given stratum is likely to produce oil. Cores are examined for permeability, porosity and other qualities, lt is possible to estimate the likely flow of oil and the yield from the surrounding country.

The Government has told us that, so far, £56,000,000 has been spent in Australia, and that 443 holes have been drilled. Oil has been struck at Rough Range and at Puri No. 1. Every one ardently hopes that eventually it will be struck in payable quanties somewhere in Australia.

I emphasize that we do not in any way wish to discourage private companies from going on with their own drilling operations. We merely say that the Government also should embark upon drilling operations, and carry out some of the work that was envisaged by the Labour Government which set up the Bureau of Mineral Resources, Geology and Geophysics. It could be financed with the money that is to be expended under this proposal between now and the end of the programme period, 1961-62. It might well result, eventually, in the finding of oil, which is so essential to the welfare of this country. The expenditure would be justified. After all, practically every country that has persevered has ultimately struck oil, and there is no need to be discouraged about the search for oil here.

The Opposition will vote against the measure. I emphasize again that we will do so not because we want to discourage the search for oil but because we think that there is no justification for spending an amount of money on a subsidy and on taxation remissions that could be better spent in the purchase by the Government of oil drilling rigs, in the training of Australian skilled, semi-skilled and other men in the art of oil drilling, and in furthering an independence in the work that is desirable for a country such as Australia. If government-owned oil-drilling rigs were to strike oil, we would have oil-producing wells available as government-owned property.

Mr POLLARD:

– It would sell them in no time, if they developed into a sound commercial proposition. I leave it at that, Mr. Deputy Speaker; I may have more to say during the committee stage.

Mr TIMSON:
Higinbotham

.- I must say that 1 was rather surprised at the way the honorable member for Lalor (Mr. Pollard) concluded his speech. I thought he spoke quite moderately, except towards the end, and I think it came as a surprise to us all to learn that the Opposition will oppose the bill. Over the years, I have heard Opposition members acknowledge in this House the supreme importance of discovering oil in Australia and the enormous benefits that would flow from such a discovery. Having heard those views expressed, it comes rather as a shock to learn that the Australian Labour Party - the socialist Opposition - will oppose this bill, which in reality doubles the amount of assistance that the Government will contribute towards the search for oil in Australia.

I found nothing to commend in the arguments of the honorable member for Lalor. He spoke at length about the intentions of Australian Paper Manufacturers Limited to drill for oil in Gippsland, with government assistance. Certainly, the government assistance does seem very generous, but I should like to think that this company has been attracted to this field by the subsidy and by the assistance that it will obtain from the Bureau of Mineral Resources. I think we all agree that the Government subsidy, the assistance given in the search for oil by the Bureau of Mineral Resources and taxation remissions have all helped to promote the search for oil, and it is very good to know that a company such as Australian Paper Manufacturers Limited has been encouraged to engage in this search in territory that is so familiar to it in Gippsland.

The bill gives effect to an undertaking given by the Prime Minister (Mr. Menzies) in his policy speech at the last election. I do not recall any opposition by the Labour Party at that time. I do not recall that the Labour Party during the election campaign expressed any keen desire to promote the search for oil; indeed, I thought it remained remarkably silent on this subject. However, we are now honoring the undertaking given by the Prime Minister during the last election. To assist the search for oil, the Government proposes to spend an additional £1,000,000 in each of the three years commencing with the current financial year, and this will double the Government’s contribution. The provisions of the bill are really an extension of those contained in the Petroleum Search Subsidy Act 1957-58. In that act, the Government provided £500,000 of the first £1,000,000 per annum as a subsidy for the drilling of stratigraphic holes, and it is intended that this amount be increased now by some £225,000 per annum.

A further £250,000 will be used to subsidize, to the extent of two-thirds of the total cost, drilling known as “ off-structure “ drilling. The Attorney-General (Sir Garfield Barwick), who introduced the bill in this House, indicated that these holes would go to a depth of 10,000 or even 15,000 feet. In addition, certain types of geophysical surveys are to be subsidized to the extent of one-half the cost, and provision is made for the payment of part or the whole of the cost of geophysical logging of bores put down for oil or water in approved places in our sedimentary basins. Mr. Deputy Speaker, these new provisions and those already in existence, including taxation concessions, together with the money spent by the Bureau of Mineral Resources in assisting the search, means that the Government will assist the search for oil directly and indirectly to the extent ot an amount of some £3,000,000 or £4,000,000 per annum, and that is getting very close to half the total amount spent at present on the exploration for oil.

It is very pleasing to note that the rate of topographical surveying and the production of maps by the Division of National Mapping is to be stepped up and that the amount of regional geological mapping by the Bureau of Mineral Resources is to be increased. This mapping, about which I shall say something further in a few moments, is most important, and the knowledge that more mapping is to be done and that the output of finished maps will be speeded up will be welcomed, not only by people interested in the search for oil but also by people interested in mining and general development.

I congratulate the Minister for National Development (Senator Spooner) on the production of the booklet entitled “ The Search for Oil in Australia “. This booklet was prepared specifically to provide back- ground information for honorable members, and it was circulated when the bill was first presented.

Mr Pollard:

– It is a very good booklet.

Mr TIMSON:

– It is indeed, and the manner in which it sets out details of the nature and occurrence of oil, the geological conditions which explorers for oil seek before commencing to drill, the methods used in locating those conditions, the descriptions of our sedimentary basins and the roles played by the Commonwealth and State governments in the search for oil is really excellent. As one reads it, the enormousness of the task becomes obvious, and one realizes that it may be a long one.

To date, since the first hole was drilled in 1892 at Coorong in South Australia, just over 450 holes have been drilled. The total area of our sedimentary basins is approximately 1,500,000 square miles. If we had drilled 3,000 holes, instead of 450 holes, we would have drilled one hole for every 500 square miles. The total cost of the 450 holes that have been drilled is in excess of £57,000,000. This is approximately £400 per foot of drilling. Only two of these holes, as the honorable member for Lalor said, have produced a positive flow of oil. This, of course, does not deter us. In Canada, more than eight times that number of holes had been drilled before oil was found in real commercial quantities at Alberta a decade or more ago.

It may interest honorable members to have some figures in regard to exploratory drilling in western Canada and the United States of America, with which to compare our own effort in this field. As I have said, we in Australia have drilled 450 holes in all our history. In western Canada, in one year - 1957 - 3,450 holes were drilled. In the U.S.A. in that year, 14,707 exploratory wells were drilled, to an average depth of 4,700 feet. To date, as has been mentioned, we in Australia have spent £57,000,000 on the search for oil. In western Canada, in the ten years ended 1956, £535,000,000 had been spent in exploring for oil. Nearly all those wells, both in Canada and in the United States, were quite unsuccessful.

Of the 14,707 holes drilled in the United States in 1957, one in nine showed some signs of oil and gas, one in 44 produced small quantities of oil, up to 1,000,000 barrels, which is not very much at all, and nearly 98 per cent, were abandoned as dry or with reservoirs too small to operate. It is also interesting to note that in the United States in 1958, 80 per cent, of exploratory wells drilled were drilled by independent companies and 20 per cent, by the major companies.

I do not suppose that it is really fair, Mr. Deputy Speaker, to make a comparison like that, because after all, there is oil in Canada and in the United States. The chances of finding more of it must be infinitely greater than are the chances of discovering oil in commercial quantities in Australia at this time. That is why I suggest that the comparison is not fair. If you walk into any junkyard in Houston in Texas you will have a choice of six drills waiting for some one to raise sufficient money to take them off into the wilderness, or out into the desert, and drill holes. We have not such circumstances in this country. The chances of finding oil here at the present time are rather more remote than they are in Texas. Let it not be thought that we are making a magnificent effort, in view of the fact that in one year, 1957, in Manitoba and Alberta 3,450 holes were drilled.

In Australia, the task is made infinitely more difficult by the great distances involved and the fact that so much of our sedimentary basin area lies in arid, semidesert country, with very few major roads, few, if any, communications, and isolated from areas of population. It is a major operation to move there a large drill, such as a National 100 or 120. In Papua, the conditions are far worse. Much of the work is done in tropical swamp lands, or in rugged, jungle-covered mountains to which there are no major roads at all.

Many people seem to imagine that in the great oil-producing countries of the world oil is to be found under the ground almost anywhere that searchers like to look for it. That is not so, as any one who has driven through Texas, southern California or the Persian Gulf area will know. One may come across quite a major production area which occupies a small tract of land, with the oil flowing and being piped away. You might motor 400 miles before you came to the next production area. This business of searching for oil is like looking for a needle in a haystack. So we must make the most intelligent use of our geological knowledge and the modern devices which have been developed to aid the location beneath the surface of the structural and stratigraphic traps beneath which oil pools may be found.

Under the 1957 act, only stratigraphic drilling was assisted by way of subsidy, and it is most pleasing to see that the Government is extending its assistance to other fields of exploratory procedures. Before the war, most of our exploration by drilling was carried out on far too little preliminary geological and geophysical information. According to the standards of to-day, much of that drilling amounted to little more than blind stabbing. In the post-war period, during which we have seen a real surge of activity, a great change has been seen in exploration methods and in the selection of targets for drilling. We see to-day systematic programmes, the application of new techniques and, what is quite exciting, a new appreciation of the geology of Australia from the point of view of oil.

For far too long people had been saying that because there was no evidence of seepages - no surface indications - and because a great number of shallow holes bored for water had produced no oil or gas, Australia was too old geologically for oil to exist here. The truth is that our country is too geologically stable for the occurrence of oil seepages and surface indications. Also, few water bores penetrated deeply enough in any of our larger sedimentary basins to test the most prospective horizons. Indeed, most of the pastoralists’ wells in the Great Artesian Basin, for example, have been sunk along the major river channels which themselves occupy the depressed areas, or synclines, which, geologically, would be the least promising zones for oil accumulation.

With so many first-class geologists now working in the field, a complete reassessment of the geology of Australia is being made, putting aside all those earlier misconceptions and preconceived ideas. I am delighted that the Government is increasing the amount of subsidy for stratigraphic drilling. All honorable members will know how helpful and encouraging this subsidy has proved. It gave a shot in the arm to flagging interest in the search for oil when it was introduced in 1957.

I wish now to say something about mapping. I think we all know, Mr. Deputy Speaker, of the procedure that is adopted in the search for oil. First of all, we have geological surveys, involving aerial photography and mapping, with ground traversing to complete the topographical and geological details on the surface. That really involves the recording of all information on the surface. Secondly, we have geophysical surveying which feels below the surface, as it were. That is carried out by reconnaissance survey involving magnetic and gravity surveys, and there are also, of course, seismic surveys. Those are directed, as I have said, to exploration beneath the surface. Depending purely on the results of those geological and geophysical surveys, we have drilling, both exploratory and productive.

The Minister has said in his secondreading speech that our geological exploration - that is, the first phase of exploration - has been retarded by the lack of topographic maps. This is only too true. Without these basic maps, efficient and systematic exploration is virtually impossible. The aerial photos, photomaps and photo-index maps now being supplied by the Division of National Mapping are splendid. As one eminent geologist in Australia suggested to me recently, they have made possible a new era in exploration. They provide the most accurate information and give a pictorial representation second to none in the geological reconnaissance of our lesserknown areas. They have provided more leads than any other techniques for the elucidation of surface geology. This work of the Division of National Mapping in providing a wide aerial photographic coverage is worthy of the highest commendation. It is very good to see that the officers of the division are prepared to depart from their normal flying schedules in order to fit in with the changing needs of exploration.

Geologically speaking, Mr. Deputy Speaker, Australia is probably the least mapped country in the Western world. Geological maps of even the most general kind are as yet almost non-existent. I suppose that most of the States have done practically nothing in this field for nearly 50 years. South Australia is an exception. The authorities there can be proud of the geological mapping section in the Mines Department, which my colleagues and I were privileged to visit earlier this year. We were very much impressed by the work being done there. But South Australia is practically alone in carrying out geological mapping in Australia. Therefore, this Government’s decision to increase the rate of topographical and geological surveying and to speed up the production of maps will be most welcome. As the Attorney-General so rightly said, these maps are essential not only to the search for oil but also to general mining activities and to all sorts of developmental projects. In Australia, there are now several private companies which are capable of carrying out geological mapping. Indeed, it is their specific job to do just this sort of work. I should like to see much of this work farmed out to such companies. Their results are accurate and, most importantly, they seem to be able to produce the finished maps in much less time than is taken by our government instrumentalities. In order to give the House some idea of the magnitude of this task of producing a first-class series of geological maps covering the whole of the Australian continent, I may point out that if we enlisted the aid of every available geologist, and obtained all the necessary up-to-date equipment and instruments, the job would probably take us fifteen, twenty or 25 years - and that is only if we treated the project as a matter of national urgency.

Sub-surface exploration by seismic methods is essential these days, of course, in the search for oil. This is an expensive process, and exploration companies usually confine this sort of work to a fairly small, limited area to which they have narrowed their search. Regional seismic surveys over the broader field have been carried out by the Bureau of Mineral Resources, Geology and Geophysics, and the Government proposes that the bureau shall undertake additional regional seismic surveys. In addition, the Government will pay half the cost of approved seismic surveys carried out by contracting companies. I consider that to be an excellent step.

There is no doubt, Mr. Deputy Speaker, that there are several good reasons why overseas companies are becoming increasingly interested and active in the search for oil in Australia. I know that this sort of thing seems to be anathema to the socialist Opposition, but, here in Australia, Government policy is very encouraging to overseas companies. We have, by comparison with a great many of the countries where intensive searches for oil are taking place, political stability, which is extremely desirable. Then again, we have a domestic market of our own which must be very attractive to overseas people who are prepared to come to Australia and help us in our search for oil. It is very good to know that, apart from the purely Australian companies, there is a good Australian component in almost all the oil exploration companies presently operating here.

The honorable member for Lalor suggested that we should enlist suitable skilled men in the service of the Bureau of Mineral Resources in order to carry out this programme ourselves to a very great extent. As it is, there is a most definite dearth of professional men in Australia with the requisite technical knowledge, and this is one very good reason why the Government cannot do this job on its own. Overseas companies with great knowledge and skill in this work bring their experts with them.

The subsidies provided by the Government have been a great attraction to Australian companies as well as overseas companies. I doubt whether much would have been done were the Government alone in this field. It is a highly speculative business, and I wonder whether the electorate at large would have considered that the expenditure of tremendous sums by the Government without the certainty of positive results would have been warranted. Certain it is that £57,000,000 which has been expended to date would not have been spent by the Government in this way.

We must never become oppressive in our attitude to the search for oil, and create conditions which will drive private enterprise, with all its know-how and its risk capital, from the field. On the other hand, we must always be ready to create conditions which will encourage overseas interests to come here and add their own finance and highly specialized knowledge to our resources. The main consideration in this matter should be that we have first to find oil.

Mr. Deputy Speaker, on all occasions on which legislation relating to exploration for oil comes before the House, the great economic importance of success in the work of discovery is stressed by all speakers on both sides of the chamber. I see no harm in emphasizing it briefly again. In spite of the tremendously increased refining capacity in Australia, the total value of our oil imports continues to rise year by year. Last financial year, the total value of our imports of oil and its derivatives was £136,000,000, compared with a total value of £850,000,000 for all imports. Oil is easily the largest single item of our imports. Were we to discover commercial oil in quantities sufficient for our own domestic needs, our refining capacity now is such as to make us quite self-sufficient, from the well to the bowser. Strategic considerations, of course, are quite evident, and I shall not stress them.

The other great advantages which spring from the discovery of oil can be appreciated when we look at the situation in Canada. I suggest that country because oil has not long been found there and the conditions obtaining there are similar to conditions in Australia. The discovery and production of oil in Alberta in the last decade has given a tremendous fillip to Canada’s economy. Great pipe-lines carry this oil west over the Rocky Mountains to Vancouver and east to Toronto. With the oil in Alberta, Mr. Deputy Speaker, the Canadians discovered natural gas, also. The longest gas pipe-line in the world conveys that gas from Alberta to Montreal, a distance of 2,290 miles. As a matter of coincidence, this pipe-line, which took three years to construct at a cost of 375,000,000 dollars, was completed just twelve months ago to-day. The discovery of oil in Canada has meant the establishment of important new industries, a great increase in employment potential and a consequent increase in the transport of freight by rail, sea and air - with, of course, a tremendous reduction of costs by methods of transport which depend on oil. I mention these things, Mr. Deputy Speaker, because I wish to stress again, as did the Attorney-General, in his secondreading speech, that the task before us is a great and urgent one.

I congratulate the Government on this measure and the additional help which it will give. But I ask myself whether we are doing enough. When one looks at what is being done overseas, one is inclined to think that the efforts which we are making in Australia are very small indeed. One can only hope that this measure will be followed quickly by others, until we can honestly say, here in this Parliament, that the search for oil in Australia is being conducted on a scale commensurate with its great importance.

Mr CASH:
Stirling

.- Mr. Deputy Speaker, it is just 100 years since the foundations of the modern oil industry were laid in the United States of America by a man named Edwin Drake, when he successfully used the then revolutionary method of drilling a hole in the ground in the search for oil. Drake’s well flowed at the rate of only fifteen to twenty barrels a day, but, at the then current price of oil, the well more than repaid the expense of drilling. From these small beginnings the world’s oil industry has flourished and has brought with it a complete change in our standards of living. Without the petrol engine, the aeroplane and the motor car could not have become realities. The impact on the world of these two means of transport has been tremendous. They have changed living conditions more drastically than has any other invention that we have known.

This bill seeks to encourage the search for petroleum in Australia by subsidizing stratigraphic drilling and certain other operations. In looking at the history of oil drilling, we find that since the discovery of oil in America there have been amazing developments in the techniques of drilling, particularly in the size and cost of the equipment involved. The development of any oil field depends upon the success of the drilling, and every hole that is drilled, irrespective of the results that are obtained, provides some valuable information to the organization concerned. Therefore, we must encourage drilling where there is any possibility of striking oil, and I feel that the Government, by introducing this bill, is making a great contribution in that direction.

Through the utilization of scientific developments, modern rotary drilling equipment can penetrate more than 5 miles into the earth’s crust, and with the constant improvements ‘that are taking place it should be possible soon to exceed this depth by quite a considerable distance. Although rotary drilling is the most important kind of drilling in use to-day, there are other kinds of drilling which at one time or another were significant, or are still under consideration to ascertain their prospects for future development. One major advantage of rotary drilling is that it makes for faster progress than percussion drilling. Another advantage is that the method is more flexible and a greater variety of operations can be easily carried >put.

The turbo-jet method of drilling is perhaps the latest modification of the rotary method, and it shows a great deal of promise. At this point, I would remind honorable members who had the opportunity during the dinner break to see the excellent film dealing with the growth of French industry in recent years, that the film showed the turbo-jet method of drilling that is in use in the French oil-fields. The main disadvantage of this method of drilling is the inability of the bits and the cutter Bearings to withstand excessive rotating speeds for extended periods.

The oil search programme of the Bureau of Mineral Resources costs more than £400,000 annually, and contributory work by the Division of National Mapping costs more than £100,000! These organizations are divisions Of the Department of National Development, which administers the Petroleum Search Subsidy Act by which a subsidy o=f £500,000 is made available each year. To this considerable annual expenditure -the Government has decided to add an additional £1,000,000, bringing the total annual contribution to oil search in Australia to more than £2,000;000 a year.

It has not been proved that we have oil in commercial quantities in Australia although it has been found at Rough Range and Puri, and natural gas has been found at Kuru and Bari Kewa and in the Sydney

Basin. Areas with good prospects include part of the Papua basin, the north-western part of the Carnarvon basin in Western Australia, the Fitzroy basin in Western Australia, the east coast basins of Queensland, the central part of the Great Artesian Basin and the Perth basin in Western Australia. The work involved in the search for oil in Australia requires expert technical knowledge and large amounts of capital. It is an elaborate and costly process, and I commend the Government for providing direct and indirect assistance which encourages interest and investment, both local and overseas, which we hope will bring the search for oil to a successful conclusion.

The discovery of oil is of great interest to this nation because of the tremendous benefits that such a discovery would bring to us all, particularly to my own State of Western Australia. The search for oil in Australia is a national enterprise in the most complete sense because it involves co-operation between the Commonwealth Government, State governments and private enterprise.

Imports of petroleum products cost us more than £135,000,000 annually - more than any other item of imports. The discovery of oil in Australia in commercial quantities will enable us to improve our balance of payments, and will make us less dependent on overseas sources of supply which could be cut off at any time in the future. It is of vital importance to our national development and to our national security that oil be found in this country. The discovery of oil and the development of the subsidiary industries that will follow undoubtedly will provide enormous avenues of employment for our ever-increasing population.

The Commonwealth Government desires that the oil exploration programme should go ahead as quickly as possible, and the bill now before the House is an effective contribution to this objective. Although much has been accomplished, a tremendous amount remains to be done. The proposals contained in the bill have attracted worldwide attention and, in the hope that such attention will mean even greater activity in the search for oil, and knowing that the Australian people are vitally interested in the success of this great venture, I commend the bill to the House.

Mr CAIRNS:
Yarra

.- It is only too obvious that the issues before the House in relation to this bill are not the value to Australia of the discovery of petroleum and the contribution that that will make to a solution of our balance of payments problem. A great deal of what has been said by the honorable member for Higinbotham (Mr. Timson) and the honorable member for Stirling (Mr. Cash) during the last half an hour or so is really quite irrelevant to the issue before the House. Of course oil is of great importance to Australia. Of course the discovery of oil in Australia would make a wonderful contribution to a solution of our balance of payments problem. Those things are beyond doubt.

The honorable member for Higinbotham commenced his speech by saying that he was staggered to hear of the intended opposition by members on this side of the House to the bill. He did not seem to me to be staggered, nor did he speak as if he were. He knew very well that the bill would be opposed by members on this side, and he understood very well why it would be opposed. The issue that is before the House is, not the value of oil to Australia, not the need for the discovery of oil, but the methods that we are adopting in an endeavour to discover it. I direct the attention of the House to that point. The real conflict between the Government and the Opposition on this measure relates to the methods that have been used in the endeavour to discover oil in Australia.

I want to explain briefly the attitude of the Opposition to this matter. We object to the methods that have been adopted by the Government because they have involved a hand-out to private industry at the expense of the Australian taxpayers. A very large amount of money is involved. In his second-reading speech, the Minister informed us that £58,500,000 had been spent on the search for oil up to 1958 and that in the future probably £3,000,000 or £4,000,000 would be spent annually, either in the form of a direct subsidy to the companies engaged in the search for oil, or in tax concessions to them. Probably more than one-half of the £6,000,000 or £8,000,000 that will be spent by these companies each year will be provided by the Commonwealth taxpayers. We have already spent £58,500,000, and that amount will be increased by an annual payment of £3,000,000 or £4,000,000.

The Opposition feels that it is the prime responsibility of a government, when it spends money, to ensure that the money is spent subject to proper control and accountability. If only a small proportion of this money was being spent by a government department, and if the same loose methods of control and accountability were applied to it, there would be objections from one end of the country to the other. If £58,500,000 had been handed over to a government instrumentality to spend in the way that this amount has been spent in the past, and if £3,000,000 or £4,000,000 was spent each year with the same loose system of control as applies in this case, every newspaper and every public speaker in Australia would be critical of the position.

The first point to be considered is that the Government will be using Commonwealth revenue to subsidize private companies, without the money being subjected to any proper system of control or accountability. The Minister, in his second-reading speech, indicated just how loose the system is. He said’ -

Subsidies will be paid in accordance with agreements which the Minister will enter into on behalf of the Commonwealth with suitably qualified persons who will undertake to carry out approved operations. The existing Subsidy Act operates in this way.

The present Act is administered in two stages - the applicant seeks Ministerial approval of his proposed operation, and then having received this, applies for the grant of subsidy. This has proved a somewhat cumbersome method, and it is proposed that under the new act an application for approval of a proposed operation should be considered also to be an application for the grant of subsidy. In other words, administration would be a single-stage operation.

This has been altogether simplified. We have no information in the bill nor have we any other information as to the practice up to this stage. What, in fact, is done? Has the Government, at any stage, adopted the procedure of going back and having a look again? We have not got a complete picture of this by any means. The Minister has said that certain information will be required from applicants. He said -

This will include the location of the proposed operation, particulars of the estimated cost, the applicant’s financial capability to carry out the operation, the nature of the work proposed, and the reason for carrying out the operation.

There is no suggestion that the concern’s accounts will be checked or watched in any way. Once the technicalities have been decided, presumably the operating company will be allowed to undertake expenditure and incur costs. Presumably, there will be no such thing as an audit. So, our first ground of opposition to this bill is that the whole system of control, if there is any such thing at all, is loose. There is no real system of accountability. We think that this is not good enough in view of the fact that it has involved the expenditure of £58,500,0000 so far and will involve the expenditure of between £3,000,000 and £4,000,000 in the next three years. This is a very important factor, not one to be lightly overlooked. But it has been overlooked by Government speakers so far. Each of them has used his time in talking of the great value to Australia of oil discovery. The honorable member for Higinbotham (Mr. Timson) took us on a tour all over the world and told us what was happening in the United States and Canada. This was very interesting, but it had nothing to do with the case. The honorable member for Stirling (Mr. Cash) seemed to have been reading an encyclopaedia because he gave us some information about the technicalities of oil drilling, as though this had some relevance to the question under consideration.

The question under consideration by this House is: Is this the best way to spend £3,000,000 or £4,000,000 a year? The Opposition say9 that it is not. It says that it is not, first, for the reason that the control over spending is as loose as possible and there is no system of accountability at all. Our second ground of opposition to the measure is that the Government is continuing to pay at least a very large proportion of this £3,000,000 to £4,000,000 a year to companies that already have an enormous asset structure and which could well afford to pay some revenue into the search for oil without receiving assistance in this way. This is consistent with the attitude of the Government.

The Government is quite prepared to apply fairly rigorous systems of checking and accounting to money spent by government departments, but it is prepared to give away £3,000,000 or £4,000,000 a year to wealthy concerns that do not need this kind of assistance. It is useless to say in answer to that submission, as Government spokesmen have said in the last couple of days, that a lot of small shareholders are involved in these companies. Perhaps a lot of small shareholders are involved, but their interest will not amount to much, in the aggregate, and they will be firmly under the control of the management of these concerns. They will be firmly under the control of the interposed companies which will be investing money in oil search. Consequently, the small shareholders will have no say in what happens.

This bill, like its predecessor, provides an opportunity for the Government to give assistance to foreign capital. Here is not a virtue in this bill; here is a defect. The Government has attempted to justify opening the door for the entry of increased foreign capital for oil search in Australia by saying that we need the skill and knowledge of foreign companies which have had so much experience in North America and elsewhere in the discovery of oil. If that is what we want, the best way to get it is to pay for it, directly. If the Government brings skill and experience to Australia in the way that it proposes, it will bring in more than skill and experience. It will bring in the policy of these companies which may not coincide with the best interest of the Australian people or the Australian search for oil. This is altogether too clear and it should not need stressing.

In the industrial field we have seen that the most important and most significant effect of foreign capital is not that it brings funds for investment in Australia, but that it brings control from outside. It brings in the policies made by boards in Chicago, New York and San Francisco which determine decisions in the Australian economy, As yet, we do not know the facts about the oil exploration companies, but I suggest that their activities will be the same as those of companies in the industrial field. The classic case in the industrial field is that of General Motors-Holden’s Limited. That company has made £110,000,000 in profit in Australia since it began operations. Hardly one dollar of American money has been introduced into Australia. The company set itself up in Australia on money loaned by the Commonwealth Bank. It has paid that money back, it has paid about £25,000,000 in dividends to the United States of America and it has built up its asset structure here to about £75,000,000. Without introducing money into Australia it has introduced American control into Australia.

This may not always be in the interests of Australian industry, and this is particularly significant with regard to oil. The door is being opened increasingly wide to foreign capital, and once we introduce the influence of the foreign oil companies, we introduce the world-wide pattern of oil discovery and distribution. It may not pay these companies, in view of their international commitments and international supplies, to exploit oil resources that may exist in Australia. That is a factor that has to be taken into account. That is the second reason why the Opposition opposes the bill. We say that funds are being made available to companies in Australia which, financially, do not require this kind of assistance. We say that the door is being opened to foreign policy in the search for, and the exploitation of, oil in this country.

Our third point is that every one realizes the difficulties of the search for oil in this country, which is not geographically similar to other countries in which oil has been discovered. The geological structure of Australia suggests that oil may be rare and difficult to discover compared with other countries. We are thankful, therefore, to have the assurance contained in the foreword of the booklet brought out by the Minister for National Development (Senator Spooner) called “The Search for Oil in Australia”. It states -

We have it on the highest professional authority available that oil exists in Australia and that there is no apparent reason why commercial quantities should not be found. No one doubts that the way ahead may be long and hard. But with co-operative effort and tenacity of purpose, success will be achieved.

I think that that is a statement with which every one will agree. We hope it is true, but the search for oil, whilst it has not been extensive, has been going on for a long time in Australia and oil in payable quantities has not been discovered. It has been produced in two places in Australia, and there are many people, some of them quite well qualified technically, who suspect that there may be influences at work which are not genuinely committed to the production of oil in the places where it is found in Australia. We want some assurance, and we want some reason for assurance, that this is not always the case.

So the fourth objection that the Opposition takes to the method of the Government, which is really the issue we are debating in relation to this bill, is that the Government persists blindly, as a matter of dogma, in refusing to consider proposals to put some money, through Commonwealth instrumentalities, directly into the search for oil by some government machinery. Surely this is a completely doctrinaire, antisocialist attitude. The Government may, if it wishes, put some money into encouraging private enterprise, but it is doubling it and putting an extra couple of million pounds into that field. The Opposition would not object to the Government’s putting some money into this field if it also proved its sincerity by putting some money directly into government oil search, so that a check could be made upon the search for oil in other places and in other ways. Then we would not, as I said yesterday, be putting all our eggs into one basket in this vital search for oil. I suggest that the Government is simply taking a doctrinaire, antisocialist attitude. The doctrinaire people in this House are on the other side of the table. There is far more flexibility on this side of the House in regard to the use of government machinery in conjunction with private enterprise than there is on the other side. That is why I quoted directly from the statement of the Minister for National Development that

  1. . with co-operative effort and tenacity of purpose, success will be achieved.

I submit that co-operative effort does not consist only in the Government’s handing out £3,000,000 to £4,000,000 a year to private enterprise. Something more is needed to give full force to the words “ cooperative effort “. In addition to the search by private enterprise, which in different circumstances we might not oppose, if the Government itself were spending money to put the Government actively into the field in the search for oil, we would say that that amounted to co-operative effort and we might take a different view of the bill that is before us. 1 want the House to consider the matter in that way. Often we have allegations from the other side of the House that there are doctrinaire Socialists over here. I submit again that there is in this bill evidence of a simple, rigid doctrinaire attitude on the other side of the House. The Government is not to come into this field. lt will simply hand out £3,000,000 or £4,000,000 every year to private enterprise, without proper control and without accountability. We will not spend one Australian £1 in putting the Government into the field. We say that when we find the Government taking up that position we find it convicted of an insincere attitude to the search for oil in Australia.

Those are the reasons why the Opposition opposes this measure. I want to summarize the position, in conclusion. In the debate to-night, we have heard two speakers on the Government side. One took us on a journey all over the world and told us about what was happening in North America. It was a wonderful geographical tour, and I could almost hear the voice of Fitzpatrick, but in what way was this relevant? We know the great value of oil discovery. We found ourselves interested in the extracts from an encyclopaedia that came from the honorable member for Stirling, but what he said has nothing to do with this bill. The question before the House is the method adopted by the Government in the search for oil, which we all agree is of supreme importance. The Opposition takes the view that the Government’s method is not the best method. We take this view for four main reasons. The first is that this Government and other governments have presided over the spending of £58,500,000, and the Government proposes to spend every year in the next three or four years about £1,000,000 or a little more in direct subsidy, and £2,000,000 to £3,000,000 in taxation concessions, which are even more vague and even less subject to control and accountability than is the direct subsidy. The greater part is going in taxation concessions. An amount of £3,000,000 to £4,000,000 a ye?r of Commonwealth revenue is to be spent by the Government without any real system of control or accountability at all. We say that if that were happening in another field there would be ;an -outcry about it from everywhere. That is the first point of objection.

The second .point is that the Government is continuing to pay this money substantially, we submit, to large financial concerns that can well afford to put back into the Australian environment some of the money that they are taking out with both hands. We will not agree to the Government’s continuing to subsidize the rich in the way that it has consistently been subsidizing them. Associated with that objection is the fact that the Government is opening the door wider to the entry of foreign control into oil search in Australia. Frankly, we do not in all circumstances trust the boards of directors of companies situated in cities in other parts of the world to do what is in the best interests of Australia. We are calling for a much more realistic evaluation of this question of foreign investment and foreign influence through overseas boards of directors than that to which the Government is prepared to ‘have regard.

Finally, we say that -what is needed in the field, as the Minister for National Development has said, .is “.co-operative effort and tenacity of purpose “. If we have .that, we shall have our best .chances of success. We say .that co-operative effort is not something in which the Government does no more than hand out £3,000,000 or £4,000,000 a year to private sources without any real control and accountability. That is not co-operation at all. That is a gift. It is a give-away. If that is the Government’s concept of co-operation, it is not ours. We say that if the Government does assist private enterprise within reasonable limits we shall support it. But if cooperative effort is to mean anything, the Government should put its own instrumentalities into the field of oil search so as to have reliable information about what is going on and to have a check on the private search. Without this, the Government cannot have any check at all. If the Government takes this course, it will have a chance of discovering oil, and through the agency of a public corporation that the people own and control there will be more chance of the Australian people having a real share in the oil resources of Australia in the future. For those reasons, the

Opposition opposes this legislation. We want to make our grounds of opposition as clear as we possibly can.

Mr WENTWORTH:
Mackellar

– The Opposition frequently shocks me and frequently surprises me. To-night it has done both. I had expected that the Opposition might criticize this bill on the ground that it did not go far enough or perhaps on the ground that there was too much control and red tape in the administration of the act, or something of that character. In place of that, we have found that Opposition speakers can concentrate only on their own doctrinaire socialism. They are blind to the real needs of Australia and they are apparently oblivious of the great advantages that would flow from the discovery of local sources of oil. Apparently they do not understand that this is something which is quite different from other developments in that it is vital to the whole Australian economy.

It is vital for two reasons. The first is that at the present moment, even allowing for the credit of re-export, we are spending, net, something like f 120,000,000 a year upon imports of petroleum. This figure is rising rapidly, probably at the rate of 15 per cent, or 20 per cent, a year. This is a figure which imperils, therefore, the whole of our overseas balances, and unless we can do something about it, it may be impossible for us to be able to maintain in Australia the expansion of motor transport, which we all want. It is surely obvious that when we have this thing which is the great single debit item in Australia’s overseas accounting, farreaching measures are justified in order to do something about it.

The second aspect is that the whole of our national life depends upon oil, and oil, if it comes from overseas, can be cut off by foreign action. For strategic and defence reasons, for reasons of survival - because the whole of our production machinery is tied more and more to oil - we must do something about this. We must take every means in our power to make certain that we find, if possible, oil on this Australian mainland.

Hitherto the search for oil has been almost entirely unsuccessful, but there have been indications. Looking at the continent as a whole, two things seem to stand out.

First, there is the overwhelming probability that somewhere in Australia there is oil in commercial quantities. Nobody can be certain until it is found, but it would indeed be a geological miracle if nowhere within this area of 3,000,000 square miles, with its immense sedimentary basins, there was not a commercial accumulation of petroleum waiting to be ‘tapped. The second thing is that hitherto the amount we have spent on oil search - £56,000,000 - is small by comparison with what has been spent in other countries which nave found oil - and spent before they found it in commercial quantities. For example, it is only a fraction of What was spent in Canada before oil was found there; and we know that ‘Canada is now virtually self-sufficient in its -oil supply, and, indeed, may shortly become a considerable exporter to the world’s market.

Therefore, it was rather unworthy o’f the honorable member for Tarra (Mr. Cairns) to take to task the honorable member for Higinbotham (Mr. Timson) who was saying what was relevant and what should have been in the minds of honorable members in considering the reasons behind this bill. I certainly felt that it was unworthy also of him to attack the honorable member for Stirling (Mr. Cash) who, again, was saying things which were relevant and which this House should have kept in mind. If this bill is to be criticized at all - and I do not intend to criticize it - it is open to criticism only on the ground that it does not go far enough. Indeed, I would have expected the Opposition to have taken that line which at least, rightly or wrongly, would have been colourable in terms of working for the Australian people on this continent. Instead, honorable members opposite preferred, as increasingly they are now coming to prefer, a doctrinnaire socialist narrowness instead of the real interests of the Australian people.

I do not intend to detain the House for long in discussing the bill itself, but there are one or two observations which I should like to make. When this measure is administered I hope that it will be possible to give reasonable access to subsidy to the small companies. We know that the search for oil is a complicated process. It is probable, indeed, that the search will be successful in the hands of the large companies which have the greatest resources. That is probable, but not certain. The wild cat may find oil where the informed geologist, with his geophysical experience, misses. This has happened in other countries sometimes - not always - but it has happened. Indeed, in Australia and in the adjoining Territory of New Guinea, it is notable that the holes which have been most successful have been those which were put down without full geophysical knowledge. For example, No. 1, Rough Range, was the most successful hole in that area. It was put down, not without the benefit of geology and geophysics, but without the benefit of geology and geophysics to the same extent with which other holes were put down.

In Dutch New Guinea, the most successful hole put down was the first one. That was done with very little knowledge, either geological or geophysical. Indeed, even recently in the New Guinea field where the gas showings have been most significant, success has not been correlated with perfection of knowledge. Indeed, I have heard it suggested that the geology of this country may be different from the geology where oil has been found, and we may be drilling not on indications but on contraindications. There may be a place for the wild cat. I hope that there will be room, in the administration of this legislation, for adequate subsidies to the small companies, particularly to the company which is going down in locations which may not yet be fully proved or fully authenticated as favorable sites.

In the past, I think there has been too much of a tendency in the department to demand a great deal of geophysical infor.ation before the drilling was done. This is not something which is recent; this has been a tendency in the department for at least twenty years. It was a tendency shown in New Guinea in the days before the war. I do not want to write down geophysical methods, but I have heard oil men say, and I think with justice, that the drill is the best geophysical tool, because until you get a hole down in a structure it is often not possible to evaluate correctly the results from seismic and similar surveys. It is only after the hole has gone down that any one can say what the seismic result really means.

I am not trying to say that it is wrong to have seismic surveys; I think very much the opposite. I think it is right and correct to do so. But in doing so, do not let us lose sight of the small man. Indeed, let us realize the paucity of our knowledge of many of Australia’s sedimentary basins. I know this will seem hardly credible; but it is true that even of Sydney basin, which reaches from Wollongong to Gunnedah and which is the best known in Australia and contains coal, the most valuable mineral yet found in Australia, our knowledge is only rudimentary. We know nothing of the deep structure over a great part of it.

It may well be that even in that basin there will be some surprises when the drills go down. I put that to the House. I know this is scarcely credible, but it is true that we do not have an adequate knowledge even of the Sydney basin, and if we have not got an adequate knowledge even of that basin, how much less do we know of the other sedimentary basins in Australia many times its extent?

I put this to the House as evidence of the amount that has to be done and of the amount of money that may have to be spent fruitlessly before we get the final result, even though the oil is there in commercial quantities. Do not let us be discouraged too early. Let us remember also about this legislation - I think this knocks the bottom out of a great deal, perhaps all, of the Opposition’s argument - that in 1957 the search for oil had almost stopped in Australia, lt is a fact that ever since that date there has been a world glut of oil. There has been no world shortage of oil. Yet, under the Government’s policy, the search for oil which had almost stopped in 1 957 has been resurrected and is now going on. If we do not see it as going on at a satisfactory rate in Australia, at least it is going on at a greatly increased speed. And this is a justification entirely of the Government’s policy when one measures it against the needs of Australia for oil.

I have suggested, Sir, that in the administration of this subsidy, the interests of the small, wildcat company might be given some consideration - not more consideration, because the big company drilling the big holes at a large expense must obviously get, and should obviously get, the lion’s share of the subsidy.

May I make two other suggestions? First, the Government should be more positively interested in importing new techniques, for example, the tracking or fracturing technique. It may be - I say “ may “, because all these things are speculative; everything that goes into the oil game is necessarily gambling - that these techniques are not available in Australia, as they should be. There are not the services fully available for drillers to call upon. I know that the oil logging techniques are here. We do not want to worry about those any more but the machinery for the tracking techniques might be brought in by the Government and kept available for the benefit of the small companies. It might help a little and not much money would be involved.

There is, finally, one rather larger thing which should be done. In Australia to-day there is, on the average, only six weeks’ supply of oil. Of that, three weeks’ supply is held at the refineries in the form, mainly, of crude. The other three weeks’ supply is in what you might call the pipeline between the refinery and the tank of the car that uses it. This figure of six weeks’ supply might go up and down a little as from time to time the shipments come in. They come in at fluctuating rates, but six weeks’ supply is the average. This is not enough. It is not a safe margin. I believe we should be doing something to build up the stocks of oil which we hold in Australia. I know that the storage facilities cost money. I know that some - not all - oil products cannot be held in store for long; they require turnover because they deteriorate. But taking it all in all, the oil itself will cost us very little because from the balances that we have overseas it will be quite reasonable to invest a little in the oil stocks to be held here in Australia as an insurance against something unforeseen happening in this uncomfortable world in which we live and in which, unhappily, we are dependent for our national life on the oil we import. The sooner we change this situation the better.

I welcome - and I believe that the House should welcome - this piece of legislation introduced by the Government and I hope that it will be followed up by other appropriate measures.

Question put -

That the bill be now read a second time.

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

AYES: 45

NOES: 27

Majority . . 18

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time and committed pro forma; progress reported.

page 2265

ADJOURNMENT

Unemployment Benefits - Political Broadcasts - Deaths of Ex-servicemen from Cancer - Import Licensing.

Motion (by Mr. Adermann) proposed -

That the House do now adjourn.

Mr GRIFFITHS:
Shortland

.- This morning I asked the Minister for Labour and National Service (Mr. McMahon) a question regarding the reduction in the numbers of persons shown by his department as being unemployed, and suggested that this was a result of the refusal of the Department of Social Services to pay unemployment benefit to persons unemployed and unemployable. The Minister did not answer the question, but said that I had asked it in an emotional way. He then commenced to tell the House how the Minister for Social Services administers his department. Let me say now that from time to time I have found that unemployed persons were not being paid the benefits to which they were entitled. I believe that these persons are entitled to such benefits because in 1944 Mr. Holloway, then Minister for Labour and National Service, when making his second-reading speech on the Unemployment and Sickness Benefits Bill, said -

The Government’s policy will be most actively directed towards assuring maximum employment, but we realize there will always be a certain percentage needing financial aid. At the present time, unemployment is practically confined to the unemployable.

It is true that the Minister also said -

To obtain Unemployment relief, a person, in addition, must be available for, and willing to, work.

I agree that this should be so, but there are certain classes of people in our community to-day who are able to do only certain work, and for whom such work is not available. There is another small proportion of people who are unemployable, although not ill enough to obtain an invalid pension. I have quite often had complaints from men in my electorate about their inability to receive unemployment benefits.

Some time ago one of my constituents, who went as far as Tamworth in an endeavour to find employment, wrote to me after receiving a letter from the Registrar of Social Services in Newcastle. The Registrar, in his letter dated 9th July, 1959, mentioned that payment of the uneemployment benefit had been authorized since 7th February, 1957, for a period of 29 months. He went on to say -

To qualify to receive payment of benefit an applicant must, in addition to fulfilling other requirements, satisfy the Department that he is capable and available to undertake suitable fulltime employment and is actively and consistently seeking such work on his own initiative. It is not sufficient to rely solely upon the efforts of the local district office of the Commonwealth Employment Service to obtain a position. In addition, payment of benefit is regarded only as a temporary measure to provide assistance for a limited period whilst a person is temporarily unemployed. Considering the lengthy period that payment of benefit has been made available to you, nearly two and a half years, and that the available evidence indicates that you have not taken reasonable steps to obtain employment by your own efforts, it is now necessary to terminate payments with effect after payment due on the weekly income statement to be lodged on Thursday the 16th of July, 1959. The decision to terminate payment of benefit will in no way affect your continued use of the facilities provided by the Commonwealth Employment Service.

I want to ask: What continued use is referred to, and of what facilities? The department will not pay him unemployment benefit because it claims it is not satisfied that he is genuine. The man concerned weighs only about 8 stone. He is 51 years of age, and he is quite unable to do heavy work.

After receiving that letter I made inquiries of the Department of Labour and National Service, and I was told that the man concerned had been referred to at least five or six jobs between 3rd March, 1956, and 14th August, 1956. The department had not offered him any work at any time between February, 1957, and the date of cancellation of the benefit. It had at one time sent him to the Broken Hill Proprietary Company Limited, but obviously he could not do the job offered. The department sent him to the gas works. He went there but was not employed, although the department claimed that he was employed there. He was then sent to the Department of Railways. I can tell the House that this man could not possibly pass for a job with the railways. He has had odd jobs with building firms, but eventually they have all put him off. The Registrar of Social Services in Newcastle informed me by letter, dated 1st September, 1959 - and I may as well mention the man’s name -

Mr. Buckley received unemployment benefit from February, 1957, to 16th July, 1959, and during that time was referred to five positions by the Commonwealth Employment Service. His case was recently reviewed and benefit terminated as it was considered he did not possess the qualifications outlined above.

This has proved to be quite wrong. The department did not offer him any work between February, 1957, and the date when the unemployment benefit was cancelled. The reply of Mr. Jenkins, the Director of Social Services for New South Wales, shows clearly the gestapo methods that are employed. The director indicates quite clearly that he does not intend to pay any benefits at all to this man. A man who has been unemployed for two and a half years, receiving £3 5s. a week, which represents about 3s. a meal, is in a hopeless position if he is not given any assistance to allow him to approach industrial firms for the purpose of trying to get a job that he may be physically capable of doing. I agree that the fellow himself is not a good prospect. He gets on the plonk now and again - but so do a lot of other people. However, in spite of what the Director of Social Services has said in his letter, I have never seen this man drunk when he has come to my office or at any other time. It is true that he is not clean, but he has not the money to purchase a towel and soap to wash himself. He has been on the dole for two and a half years.

Mr. Jenkins said, in his reply dated 6th October, 1959-

One of the conditions governing the grant and continuance of unemployment benefit is that the beneficiary must satisfy the Department that he has taken and is taking reasonable steps to obtain work. Registration for work with the Commonwealth Employment Service is regarded as essential before benefit can be granted and is thus accepted as one of the steps necessary to establish the qualification mentioned.

The responsibility for finding work, however, does not rest entirely with the Employment Service and the beneficiary is expected to make efforts on his own behalf. Consequently, each case is reviewed from time to time to ensure that the conditions for payment are being observed. The failure of any person to satisfy the Department that he is making an effort to find employment (apart from the efforts being made on his behalf by the Employment Service) is naturally a disqualification for benefit.

In addition to this requirement, a person must satisfy the Department that he is capable of undertaking and willing to undertake suitable employment. In considering a person’s willingness to accept employment, regard is had to that person’s attitude to work, his appearance and demeanour, and his employment history.

This person is unemployable. He could not fit into a job if he tried. The Director then said -

Several instances have occurred where Mr. Buckley has been reported to have attended the local branch of the Commonwealth Employment

Service in an intoxicated and untidy condition. He has been interviewed by officers of this Department and the Commonwealth Employment Service and is regarded by both Departments as a poor referral prospect. His appearance, attitude towards work, and general demeanour are such that he could not be referred to a prospective employer with any confidence nor would he favorably impress any employer he contacted direct.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.

Friday, 23rd October 1959

Mr WIGHT:
Lilley

– I should like to take this opportunity to refer to a broadcast which was made in Queensland recently by the Deputy Leader of the Opposition (Mr. Calwell). I am indebted to the honorable gentleman for making available to me the script of the speech that he delivered then. In my belief, in the course of the broadcast he made some statements that were ill-founded and unworthy of him. Indeed, they were vicious and untrue. Other statements made during the broadcast can be described only as quite irrational. In case anybody wishes to cavil at that remark, let me quote from the script some of the statements which the Deputy Leader of the Opposition made. He said - . . there is no doubt that Mr. Menzies and his colleagues are most unpopular with the Australian public at the present time.

He then went on to give the reasons why he thinks the Menzies Government is unpopular. Amongst the reasons he gave was the threatened drought, or partial drought conditions, over a large part of Australia, and the fact that the Cuban dictator has threatened to tear up the International Sugar Agreement.

However, those are not the points to which I really wish to address myself to-night. I rose principally to deal with a statement made during the broadcast in which the honorable gentleman referred to the actions of members on the Government side and to their voting habits. He said -

There are others who run away from their obligations by staying away from Canberra whenever measures they are unhappy about are voted upon. There are quite a few Queensland Liberals who do this. Mr. McColm is one, Mr. Wight is another, but they are not the only two.

Later in his broadcast, the honorable gentleman made this comment -

As I said earlier, some Queensland members have abstained from voting during the present session on measures that contained a lot of political dynamite. Mr. McColm, the Liberal member for Bowman, was one of these because he was not present in Canberra when the divisions on the social services and repatriation bills took place.

The honorable gentleman went on to say -

People who abstain from voting on controversial issues - and Mr. McColm and Mr. Wight are two of these, as I said previously - are members who are trying to score off their mates, who at least have the honesty to face the issue and vote.

I suggest that that statement was grossly unjust and unfair. I think it is worth noting that on the occasion of the vote on the Repatriation Bill the honorable member for Bowman was in Brisbane. He is the president of the Ex-Prisoners of War Association, and at that time he was presiding at the annual conference of that association. I think it was a little unfair for the Deputy Leader of the Opposition to suggest that the honorable member for Bowman was deliberately shirking his responsibility to vote in this House. In my own case, Mr. Deputy Speaker, as the honorable gentleman knows, I was at that time in Brisbane, carrying out a commission on behalf of the Acting Minister for External Affairs. When I accepted that commitment I did not know, nor did the honorable member for Bowman know when he accepted his commitment, that the Repatriation Bill would be debated during that week.

I do not think any one here will deny that I was the first member of this Parliament to present to the House the claim that cancer should be recognized under section 36 (3.) of the Repatriation Act on the same terms as we recognize tuberculosis. For some years I have advocated that the Government should give such recognition. When the Repatriation Bill came into the House, the Opposition saw an opportunity, as it thought, to get me across a barrel, and it moved an amendment along the lines of the proposal that I have been advocating for some years.

What the Opposition did not know when it took that course was that since the last time that I had raised the issue in the House I had been able to get further facts and figures. Had I been present in Canberra, I would not have voted for the Opposition’s amendment. My remarks are going on record in “ Hansard “, and I can assure the Deputy Leader of the Opposition that they will be distributed to every subbranch of the returned soldiers’ league in my electorate. There are two reasons why I would not have voted for the Opposition’s amendment. The first reason is that I do not believe there was any real sincerity in it. I raised this issue, receiving no support from the Opposition in past years, but a great number of ex-servicemen joined with me in advocating to the Government that this should be done. We went ahead and collected statistics on the subject, but they are inconclusive. We feel that until we can present a full case to the Minister and to the Parliament, it would be premature to claim that the Government should, in fact, give recognition to this disability.

Mr Bryant:

– That is against section 47.

Mr WIGHT:

– It is not against anything at all. I pointed out in a previous speech that last year 14.8 per cent, of the deaths of males in the whole population was due to cancer, and that 16.2 per cent, of the females who died last year died from cancer. So far as we have been able to gather from the Repatriation Department, the records show that during the last three years, on the average, only 10.6 per cent, of the deaths of ex-servicemen whose records are with the department were attributable to cancer.

Mr Bryant:

– What does that prove?

Mr WIGHT:

– It does not prove anything, but it suggests that we have not yet gone far enough in examining this problem to be able, honestly and with a sense of responsibility, to claim that the Government should give the recognition for which we ask. However, I hope that before the next Budget is brought down we shall have been able to obtain the statistics that we require, and that we shall know whether this is a responsibility that the Australian Government should accept. That will not be possible of achievement until we are able to break these figures down into the respective age groups, because the medical evidence shows that it is unusual to find deaths from cancer in the age group below 45, and most exservicemen of World War II. are now only approaching the age of 45. So that does suggest that there is a possibility that In a few years’ time the incidence of cancer in ex-servicemen will increase at a tremendous rate, that there will be an acceleration of the rate. Therefore, it is our responsibility, as the elected representatives of the people, to initiate an investigation, ascertain the facts, get the statistics, put them before the Government and not act as irresponsibly as the Opposition has done without any information, without any statistics, without any knowledge of the subject. Despite that lack of knowledge on its part, the Opposition has claimed that the Government should provide that cancer will be recognized as a war-caused affliction - not because honorable members opposite believe it to be so, but because they thought that they could get the ex-servicemen on this side of the Parliament across a political barrel.

Mr CALWELL:
Melbourne

– I am sorry that the honorable member for Lilley (Mr. Wight) did not read more of my speech. In fact, I should have liked him to incorporate the whole lot of it in “ Hansard “. The honorable gentleman quoted just a few passages from my speech. He did not quote them consecutively, either. He had a stab at one part and then a stab at another part, and concluded by telling me that I had made a vicious attack on him. I do not know that there was any viciousness in it. 1 merely directed attention to the fact that the honorable member for Bowman (Mr. McColm) and the honorable member for Lilley were absent when divisions on measures introduced by the Government they support were taken in this Parliament.

Mr Wight:

– And implied motives.

Mr CALWELL:

– Yes, I did. I said that both honorable gentlemen and others - and I was addressing the Queensland public - should be in their places and take their share of responsibility, with their colleagues on the Government benches, for unpopular measures. That is the point I made. The honorable gentleman also did not quote what I said on the Post and Telegraph Rates Bill 1959. Some members from Queensland were absent when that measure was debated.

Mr Wight:

– I dealt with that.

Mr CALWELL:

– Did you?

Mr Wight:

– I did.

Mr CALWELL:

– You had your chance to answer, but you did not deal very effectively with it. I said of the honorable member for Bowman that he knew why he was absent, that no doubt he would explain why in due course, and that I believed that he would have to explain.

Well, that is where the matter stands. All I can say is that my broadcast in Queensland must be so popular and well listened to that I had better engage in a series of them or, better still, secure an engagement to appear on television in Queensland’s capital city. I hope that the honorable members for Bowman and Lilley will brief the representatives of the press who will be grilling me, and then the whole of Brisbane can hear what I have to say on that matter.

Mr Adermann:

– When we want some more votes we will get you up there.

Mr CALWELL:

– If I get there the honorable member for Fisher may not be here. He may feel to-day that he is safe in a Country Party borough, but it might not last for ever that way. However, I am prepared to face the people at any time, anywhere, on television or on radio and give my views.

I want to answer the attack by the honorable member for Lilley on the sincerity of the Opposition in the matter of the amendment its spokesman moved on the Repatriation Bill 1959. The honorable gentleman, I think, used my speech only as a peg on which to hang his own observations - if that can be done metaphorically - on cancer. The honorable gentleman will remember that, during his speech on the Repatriation Bill, initially he was not granted leave to incorporate in “ Hansard “ a table that he wished to include. He spoke to me about it when he had missed out and the Opposition gave him every facility to enable him to have the table incorporated. We would always do that. We will listen with respect to his views and everybody else’s views on this very vexed question of whether war does produce or accelerate the development of cancerous growths. We respect other people’s opinions, but we feel that there is growing evidence throughout the medical world that cancer will have to be considered some day as a possible cause of the death of ex-servicemen who had served in theatres of war and who, because of their privations, developed some malignant growth which ultimately led to an untimely or early death.

However, the Labour Party is quite prepared to defend itself on all .those matters at any time, and its members will be very happy to put their views before the people on whether cancer ought to be included among those diseases that should be regarded as war-caused. I think that the Australian people will praise us for our efforts to help returned solders more than they will appreciate the efforts of the honorable gentleman from Lilley to create the impression that we are stunting at the expense of returned soldiers or anybody else. We do not stunt. That is shown by the fact that we introduced the best rehabilitation and repatriation bill on the statutebooks of any country in the world. That bill was brought down on the recommendation of an all-party committee under the chairmanship of the honorable member for Lalor (Mr. Pollard), which made its report to the Parliament in 1948. At no time did any member of that Parliament try to score any political points over any feature in this repatriation measure. What we did at that time is our answer to any charges that may be made against us to-night.

Mr McCOLM:
Bowman

– I do not propose to try to deal at any length with the broadcast made by the Deputy Leader of the Opposition (Mr. Calwell) in Brisbane. I thought - in fact I expected - that he would have had the decency to apologize. for what he said, particularly as the day after he made that broadcast three members of the Labour Party in Brisbane rang me to apologize for what the honorable gentleman had said in the broadcast.

Mr Griffiths:

– Oh, no!

Mr McCOLM:

– I am not concerned whether the honorable member likes it or not. I am merely stating the fact. Three members of the Labour Party rang me to apologize for the way in which the Deputy Leader of the Opposition had set about making personal attacks on members of this Parliament. I make no apology whatsoever for being absent from this Parliament in that particular week. I am the federal president of the Ex-Prisoners of War Association and’ it was my job, I considered, to be in Brisbane presiding over that association’s meeting, and I believe that some great good will come from that, meeting.

I can well understand that the Leader of the Opposition might have considerable qualms about leaving this Parliament at any time when it is sitting when he gets paid at the rate of £70 a week extra for being here when the Parliament is sitting.

Sir, I should like to make some brief reference to the subject mentioned by the honorable member for Lilley (Mr. Wight.) - cancer. I myself mentioned in this House some time ago that I believed that the Commonwealth Government should - and in due course, I think it will - undertake both research into and treatment of cancer on the basis on which it is at present doing such a wonderful job in relation to tuberculosis. I think, Sir, that the time must come - and I hope it is not too long in coming - when that will happen. We have seen the tremendous success of the anti-tuberculosis campaign, and I believe that a similar campaign against cancer could be most effective and would be tothe great benefit of our Commonwealth.

I believe that there is considerable merit in the argument that much cancer could have been war-caused. 1 know of some very unfortunate cases. There is not theslightest doubt that people do not knowthe actual cause of cancer, and I firmly believe that where the medical profession* is not able definitely to diagnose the cause, cancer should be accepted under the Repatriation Act as a war-caused disability.

Mr WARD:
East Sydney

– I did not have the opportunity either of hearing the speech delivered by the Deputy Leader of the Opposition (Mr. Calwell) or of reading the script of it. Therefore, I am very grateful to the honorable member for Lilley (Mr. Wight) for reading some extracts from it, with which I heartily agree. 1 have no doubt that if I had the opportunity to read the complete speech, I would agreewith all of it.

We have heard some extraordinaryapologies in this Parliament for honorable members failing to stand up to their obligations, but the one made by the honorable member for Lilley, in my opinion, surpasses any that we have heard in the past.

Let us see what he complains about. He says, first of all, that when the vote was taken on the Repatriation Bill he was in Brisbane, undertaking some task for the Acting Minister for External Affairs. He did not mention what the task in Queensland was, but I should imagine that there is no more important task for any member of the Parliament to perform than to be here during debates and when important votes are taken and important matters are decided. In my opinion, the only occasions upon which members can be excused from attendance in this Parliament are when they are overseas with some important delegation, or when they are ill, or when there is a bereavement in their families. Otherwise, I believe their place is in this Parliament. The honorable member for Lilley, of course, has an additional excuse for not having been here. He says he did not know that the Repatriation Bill was to be debated.

Mr Wight:

– At the time of the commitment.

Mr WARD:

– I believe the honorable member, because I know that lots of things happen here about which he knows nothing. I accept that part of his explanation. But the point is that, as a Government member, he should know of these things, and he should he here when the votes are being taken.

After making that statement, he attacked the Opposition and said that we were not sincere in moving our amendment. He said, “ The Opposition has never supported me in the past when I have raised this question in the House “. To my knowledge, the honorable member has never moved an amendment to bring about this change in the repatriation system in this country. After saying that, he said, “ Even if I had been here, I would not have voted with the Opposition “. He complains that we have not supported him, and then he says that if he had been here when the amendment was submitted, he would not have voted with the Opposition anyhow.

I come now to the honorable member for Bowman (Mr. McColm). I recognize that the organization of which he is the president is a very important organization, but, if he is looking at the matter from the point of view of what good he can do for the ex-servicemen, will he not agree that he can do more good for them in this

Parliament, recording his vote, than in attending conferences? The conference that he attended was very important, and no doubt it discussed very important matters but if he had not attended, the delegates could have advised him of their decision. Surely he does not regard himself as being so indispensable to this organization that if he had stayed away the conference could not have proceeded under the chairmanship of the vice-president or some other member? I say that these honorable members have got to answer for the votes they missed.

Let me deal with the question of the acceptance of cancer as a war-caused disability. I am amazed to hear exservicemen even talking about the necessity for getting statistics and being satisfied that the Government ought to accept the responsibility. I have always been of the opinion that if a man has been accepted as being physically fit, if he has passed the necessary tests when enlisting, if he has been on active service and has had to undergo privations and sacrifices, there ought to be an obligation on the Government of the country to accept every disability from which he suffers in after life. Who can argue that, with the service they gave and the conditions under which they gave it, these men are not justified in claiming that the Government has some obligations to care for them in the declining years of their life when they are suffering from various disabilities? Every honorable member in this Parliament has to answer for his own actions. I have argued repeatedly that this is a responsibility that ought to be undertaken by the Government.

Now let me refer to what the honorable member for Shortland (Mr. Griffiths) had to say with regard to the unemployment position. The case that he related is typical of many others throughout Australia to-day. I have had cases brought to my notice. I am approaching the department now with regard to one.

Mr McMahon:

– Why do you not come to me?

Mr WARD:

– What is the good of letting this hopeless Minister know about them? He never does anything. He gets up and makes misleading statements, and then he says, “ I only meant it in the vernacular “. How can one do any business with a Minis1ter like that?

Mr McMahon:

– You have never tried.

Mr WARD:

– I deal with the officers of the department, and I guarantee that I get better results from dealing with them than I would from going to the Minister.

What is the situation in his department to-day? No doubt the Minister has issued some instructions. In order to keep the number of registered unemployed at the lowest possible level, he issues certain instructions to the department. Let me tell the House of the experiences of unemployed persons in the metropolitan area of Sydney. Frequently, they are given tickets in respect of a vacancy which is said to exist in a distant suburb. When they arrive at the establishment, after having paid fares, either there is no vacancy or they are told they are not suitable and that an experienced man is wanted. They cannot claim recompense for their outlay on fares. These men cannot afford the cost of this travelling around seeking work, when they have no income at all.

I have had experience of cases in which, when a man has been directed to a distant suburb, he has taken the precaution of ringing up to find out whether a vacancy exists and what type of employee is wanted. Many times these people discover either that there is no vacancy or that an employee experienced in the particular type of work is required.

Because these men do not report to the place to which they have been directed, because they do not go back to the employment office and advise the officer, they are struck off the list in many cases, the office claiming that they have not followed the direction to employment. In many instances, the practice of the employment office in the case of a man who had been registered for a long period, such as the man mentioned by the honorable member for Shortland, is to ask him to give the names and addresses of six employers whom he has approached, seeking work, in recent times. Everybody knows how difficult it is to do that. The man can give the names and addresses of the employers whom he has approached, but the employers never make any record of the men who come to their offices asking whether there are any vacancies, and who just walk out when told that there is none. If an applicant said to an employer, “ I would like you to record my name because the employment office will probably check to find out if I have been here “, it is most unlikely that the employer would do it. The employment office knows that that is an impossible arrangement. It knows that very few employers would be prepared to do that. These men, who are genuinely unemployed, are being denied their right to unemployment benefit, and, as the honorable member for Shortland has asked, if they do not get unemployment benefit, what is the use of them going backwards and forwards to the employment office? There are very few positions obtained through that source to-day.

Let me refer briefly to another matter to which I think I should draw attention. On a number of occasions, I have brought to the notice of this Parliament matters relating to import licensing and have suggested that the Government should order a thorough investigation of the many matters that have been raised by honorable members. We have been told time and again that we should bring down specific instances, that we should mention specific cases, and that then they will be investigated. We have attempted that line of approach, and this is what happens: I placed on the notice-paper a number of questions concerning a Mr. Wang, a former Minister representing the Chinese Nationalist Government in Australia, and suggested that he had been granted an import quota. I asked five particular questions. The Minister has not attempted to answer any of them. What he says is -

On very many occasions in the past I have stated in this House that I must respect as confidential the business relations between any person or firm and the Department of Trade. I am not prepared to breach this confidence.

So it does not matter how many cases we bring down for examination; the Minister hides behind the claim that all of these cases are confidential.

Mr SPEAKER:

– Order! The honorable member’s time has expired. (Several honorable members having risen in their places) -

Motion (by Mr. Harold Holt) put -

That the question be now put.

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

AYES: 42

NOES: 18

Majority . . 24

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative. House adjourned at 12.35 a.m. (Friday).

page 2273

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Ships under Commonwealth Charter

Mr Whitlam:

m asked the Prime Minister, upon notice -

  1. What ships were chartered by the Government in the last year?
  2. On what terms and for what purposes were the ships chartered?
Mr Menzies:
LP

– The answer to the honorable member’s questions is as follows: - 1 and 2. The following ships were on charter by the Commonwealth in the last year: -

Department of Primary Industry - “ L.F.B. Challenge “: to survey prawn resources off the east coast of Australia. “ L.F.B. Bluefin “: to survey crayfish populations off the south-west coast of Australia. “ A.K. Paxiel “: to survey pearl shell beds off the north coast of Australia.

Department of External Affairs - “ Magga Dan “: to relieve Australian Antarctic stations and for coastal exploration of Australian Antarctic Territory. “ Thala Dan “: to relieve Australian Antarctic stations and for coastal exploration of Australian Antarctic Territory. Department of the Army -

M.V. “ Flaminia “: to convey Army personnel and families to and from Malaya/ Singapore.

Department of Immigration -

M.V. “ Fairsea “: to convey assisted British migrants from the United Kingdom to Australia.

M.V. “ Fair Sky “: to convey assisted British migrants from the United Kingdom to Australia.

These ships have been available to the Government under varying charter terms or according to detailed agreements with the shipowners concerned and it is not considered appropriate to reveal the details of the terms of charter.

In addition to the ships listed, there are, of course, those launches occasionally hired by the Department of Customs and Excise for customs purposes. In the territories, geographical and other conditions also mean the hiring of launches and small luggers, &c, if government-owned craft are not available. Landing craft, for instance, may be chartered where heavy equipment and construction material is to be transported to places which do not possess wharfage facilities.

Empire Games.

Mr Menzies:
LP

s. - On 7th October, the honorable member for Kalgoorlie (Mr. Browne) asked me the following question -

Has the Government considered a request by the Western Australian Government for a financial grant to assist Western Australia in conducting the Empire Games in 1962? If the Government has done so, will the right honorable gentleman indicate when the Western Australian Premier will be advised of the decision?

In reply I should like to say that on 16th April, 1958, I wrote to the right honorable the Lord Mayor of Perth indicating that the Commonwealth would contribute an amount of £100,000 to assist in financing the Empire Games if they were held in Perth in 1962. I might add that at the same time identical assistance was offered to the State of South

Australia, in the event that the Empire Games were held in Adelaide. More recently, the Premier of Western Australia has requested that the Commonwealth give further financial assistance in connexion with the building of a housing estate which would be used initially to accommodate visiting athletes for the Empire Games. This proposal is at present under consideration, but I am unable to indicate what the decision will be.

Taxation

Mr Ward:

d asked the Treasurer, upon notice -

  1. What amount of income tax is at present payable by a Commonwealth basic wage earner with a totally dependent wife and two children under the age of sixteen years who has no other claim for deductions or any other source of income?
  2. What changes have been made in allowable deductions for income tax purposes since the year 1948-49?
Mr Harold Holt:
LP

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

  1. The annual equivalent of the present federal basic wage (average six capitals) is £717. The tax payable by a taxpayer with an income of £717 and wholly maintaining a wife and two children under the age of sixteen years would be £17 6s. under the rates proposed for the financial year 1959-60.
  2. For the income years 1948-49 and 1949-50, concessional allowances were made by way of rebates of tax. In 1950-51, when the system of granting concessional allowances by way of deductions from income was restored, the amounts subject to rebate of tax on account of dependants were converted to their equivalent under the deduction system. However, in that year the scope of certain allowances was extended -

Life Insurance, Superannuation, &c: The maximum allowance was increased from £150 to £200.

Medical Expenses: The maximum allowance for medical expenses was increased from £50 to £100 and for dental expenses from £10 to £20 for the taxpayer and each dependant. In addition the definition of medical expenses was extended to include expenditure on therapeutic treatment and medical and surgical appliances prescribed by a medical practitioner.

Student Children: The age limit for student children was raised from nineteen to 21 years.

Contributions to Medical and Hospital Benefit Funds: Contributions to these funds were included in the life insurance, &c, allowance.

The changes in maximum concessional deductions for 1950-51 and subsequent income years are set out in the attached statement.

Currency

Mr Ward:

d asked the Treasurer, upon notice -

What is the present value of the Australian £1 in terms of the C series index as compared with the year 1948-49?

Mr Harold Holt:
LP

– The answer to the honorable member’s question is as follows: -

Any comparison in terms of the C series index would apply only to the “ purchasing power “ of the £1 over the component items of that index combined in their specified proportions. Dispersion of prices and charges renders it impossible to compile a general measure that will represent, in all circumstances and in all classes of transactions, changes in the value of money from one date to another.

Overseas Investments in Australia.

Mr Uren:

n asked the Treasurer, upon notice -

Of the net dividends and profits of £46,000,000 in 1957-58, £36,000,000 in 1956-57, £35,000,000 in 1955-56, £34,000,000 in 1954-55 and £32,000,000 in 1953-54 remitted overseas, what amount during each year was remitted to (a) Great Britain, Cb) the United States of America and (c) other countries?

Mr Harold Holt:
LP

– The answer to the honorable member’s question is as follows: -

A regional dissection of the figures of net dividends and profits quoted by the honorable member is not available. However, the figures shown below of investment income (excluding interest) payable overseas by companies (other than insurance companies) operating in Australia may be of interest -

Commonwealth Bank

Mr Ward:

d asked the Treasurer, upon notice -

  1. For how long has the Commonwealth Bank been restricted in its hire-purchase activities to the financing of transactions involving producer goods only?
  2. Did this restriction arise from any Commonwealth Treasury or Government directive?
  3. If not, did the Treasurer, the Government, or the Treasury Department in any way attempt to influence the Commonwealth Bank authorities, to adopt this policy?
  4. Is this restriction imposed upon, or by, any other financial group or organization engaged in the business of hire purchase?
  5. If not, does the restriction upon the Commonwealth Bank, by preventing fair and reasonable competition, greatly benefit its private competitors?
  6. What action does the Government proposewhich will enable the Commonwealth Bank tocompete freely and actively with private financialinstitutions engaged in this form of business?
Mr Harold Holt:
LP

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

  1. Ever since the Industrial Finance Department of the Commonwealth Bank commenced business in 1946, and in accordance with the purposes for which the department was established, the general policy followed by the department in relation toits hire purchase activities has been to provide hire purchase facilities for the acquisition of producer-type goods and equipment. The department has never provided hire purchase facilitiesfor the acquisition of domestic-type goods such as furniture, refrigerators, washing machines, radios, &c. The department used to provide hirepurchase facilities for the acquisition of passenger motor-cars, but the provision of these facilitieswas discontinued after February, 1956.
  2. No.
  3. No.
  4. Not so far as is known.
  5. There is no evidence that it does.
  6. The Government believes that the resourcesof the Industrial Finance Department and of the Commonwealth Development Bank, which is to take over the business of the Industrial Finance Department, are best employed in the provision of assistance for industry rather than for the acquisition of consumer-type goods. In this connexion, the honorable member is referred to the provisions of sections 72 and 73 of the Commonwealth Banks Act 1959.

Government Loans and Finance

Mr Cairns:

s asked the Treasurer, upon notice -

  1. What is the volume of funds invested in the Post Office on which interest is charged?
  2. What are the rates of interest and what is the cost of interest?
  3. Is interest charged upon funds invested in the Commonwealth Railways?
  4. Is interest treated differently in these two cases; if so, why?
Mr Harold Holt:
LP

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

  1. At 30th June, 1959, the Post Office was required to pay interest on £12,370,574.’
  2. The rates of interest vary between 3i per cent, and 3t per cent. The interest payment in 1959-60 is estimated to be £774,000.
  3. The Commonwealth Railways Commissioner pays interest on moneys advanced from the Loan Fund.
  4. No.

Billiard Tables

Mr Daly:

y asked the Minister for Works, upon notice -

  1. Have tenders been called by his department -during the past twelve months for the supply of billiard tables?
  2. If so, which department required the tables and what were the (a) dates on which tenders were called, (b) tenders received, and (c) tenders accepted?
Mr Freeth:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

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

  1. No.
  2. See answer to question 1.

Native Members of the Forces Benefits Act.

Mr Whitlam:

m asked the Minister representing the Minister for Repatriation, upon notice: -

Why has no date yet been proclaimed for the Native Members of the Forces Benefits Act 1957 to come into operation?

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– The Minister for Repatriation has replied as follows: -

There has been some unexpected delay in having the regulations completed due mainly to the difficulty in ascertaining the requirements of and determinating appropriate benefits for the natives of Papua and New Guinea. These difficulties have now been resolved and it is expected that the regulations will shortly be ready for issue and the act will then be proclaimed.

Aircraft Production

Mr Bryant:

t asked the Minister for Supply, upon notice -

  1. How many orders has his department placed with the Commonwealth Aircraft Corporation over the last eight years?
  2. When were the orders placed?
  3. What (a) number and (b) type of aircraft was involved?
  4. What are the corresponding figures in respect -of the Government Aircraft Factory?
Mr Hulme:
LP

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

  1. Three thousand and seven, covering production of new aircraft and aero engines, modifications, servicing and spares.
  2. The orders were placed year by year as follows: -

The figure for 1959 shows only the orders placed by the Department of Supply. The Department of Air during this period has placed 280 orders on Commonwealth Aircraft Corporation for some classes of work which were previously covered by orders placed by the Department of Supply.

  1. Sixty-two Winjeel trainer aircraft; 39 Sabre fighter aircraft, additional to 73 ordered in 1950); 59 Avon engines for installation in Sabre aircraft, including spare engines (additional to 98 Avon engines ordered for Sabre in 1951 and 128 Avon engines ordered for Canberra in 1950). 4. (a) One thousand, nine hundred and fourteen orders were placed during the eight-year period for new aircraft production, modifications, servicing and spares, (b) The orders were placed year by year as follows: -

    1. These orders included 214 Jindiviks. The order for 48 Canberra bomber airframes was placed in 1950.

Shipbuilding

Mr Jones:
NEWCASTLE, VICTORIA

s asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. Are the only orders on hand at the Newcastle Dockyard those for some small dredges and one roll-on roll-off type of ship which will be completed in approximately twelve months?
  2. Is it a fact that, when an order for a ship is placed, there is a lapse of from six to twelve months before production can commence?
  3. In view of the excellence of the work performed at the Newcastle Dockyard in the construction of the Bass Strait ferry “ Princess of Tasmania”, will the Minister guarantee that sufficient shipbuilding orders are available for this and other Australian shipyards to maintain continuity of employment as well as to retain this important national and defence industry?
Mr Hulme:
LP

– The Minister for Shipping and Transport has replied as follows: -

  1. Yes. The only major firm order with the State Dockyard at present is for the Australian National Line’s ferry “ Bass Trader “ which is expected to be completed towards the end of next year. Negotiations have recently been completed, however, for the construction at the dockyard of a special type of cargo vessel of approximately 2,000 dead weight tons for a private company. Details of the order will be released when the contract has been signed.
  2. The preparation of plans and specifications and the design work inevitaby result in some delay between the placing of an order and the commencement of construction on a new ship unless the vessel is similar to one already built. The period of delay varies according to the size and design of the ship but would involve several months before materials can be ordered.
  3. The Government is fully aware of the need for support of the Australian shipbuilding industry and has re-affirmed on many occasions its intention of continuing its support. It is at present paying a subsidy of up to 33i per cent, of the construction costs of vessels built in Australia as a means of encouraging shipowners to place orders for new ships at Australian shipyards. It cannot, however, direct shipowers, either the Australian National Line or the private companies to build ships for which no employment is available, with the sole objective of providing work in the shipbuilding industry.

Pensions

Mr Cairns:

s asked the Minister for Social Services, upon notice -

  1. How many persons of pensionable age are excluded by the means test from receiving a pension?
  2. What percentage of the number of persons of pensionable age do these persons represent?
  3. Of the number of persons excluded from pension, how many are estimated to be excluded because of their possession of - (a) income, (b) assets, and (c) both income and assets?
  4. What would be the estimated cost of removing the means test of assets whilst retaining the existing means test of income - (a) completely, (b) up to £2,000, (c) up to £3,000. (d) up to £4,000, and (e) up to £5,000?
Mr Roberton:
Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

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

  1. It is estimated that on 30th June, 1959, there were approximately 535,000 persons of pensionable age ineligible for pensions because of the means test and residence and nationality qualifications.
  2. The number of persons ineligible for pensions represents 51 per cent, of the estimated number of persons of pensionable age at 30th June, 1959.
  3. No reliable information is available to permit an estimate of this nature to be made.
  4. See answer to 3 above. Reliable data on which to base the estimates sought are not available.
Mr Cairns:

s asked the Minister for Social Services, upon notice -

  1. What was the number of persons in receipt of a full age and invalid pension on 30th June, 1959?
  2. Of this number of persons how many received - (a) no other income, (b) income of 10s. per week or less, (c) income of £1 per week or less, (d) income of £2 per week or less, (e) income of £3 per week or less, and (f) income of £3 10s. per week or less?
  3. What was the number of persons in receipt of a part age and invalid pension on 30th June, 1959?
  4. Of this number of persons how many received - (a) income of £4 per week or less; (b) income of £5 per week or less, (c) income of £6 per week or less, and (d) income of £7 per week or less, in addition to the pension?
Mr Roberton:
CP

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

  1. There were 468,558 persons in receipt of an age or invalid pension of £227 10s. per annum (£8 15s. per fortnight) or more on 30th June, 1959.
  2. It is not possible to answer fully this part of the honorable member’s question. However, the estimated numbers of age and invalid pensioners receiving pensions of £227 10s. or more per annum on 30th June, 1959, with incomes in the grades shown, were as follows: -

For this purpose income is halved in the case of married pensioners. The estimates are based on a survey of pensioners in New South Wales made in the latter part of 1958.

  1. There were 129,084 persons receiving an age or invalid pension at a rate less than £227 10s. per annum (£8 15s. per fortnight) on 30th June, 1959.
  2. It is regretted that the information sought in this part of the question is not available.

Cite as: Australia, House of Representatives, Debates, 22 October 1959, viewed 22 October 2017, <http://historichansard.net/hofreps/1959/19591022_reps_23_hor25/>.

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