House of Representatives
11 October 1961

23rd Parliament · 3rd Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1961

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

page 1887

QUESTION

UNEMPLOYMENT

Mr REYNOLDS:
BARTON, NEW SOUTH WALES

– I preface a question addressed to the Minister for Labour and National Service with the remark that if 110,000 persons were on strike, and many thousands more were on a go-slow or regulation strike, the Government would be informing the Parliament frequently of the colossal loss in production, profits and wages. Has the Government made any assessment of the weekly loss of production, wages and profits being sustained as a result of the numbers at present totally unemployed and the greater number whose employment has been curtailed? Is it a fact that the number of man-hours lost through unemployment between January and August, 1961, is three times as great as the total man-hours lost through industrial disputes for the ten-year period 1950 to 1960?

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

– The first part of the honorable member’s question was unduly provocative. J do not think he can say that each time there is some industrial trouble, or an industrial dispute, much is said about it from this side of the House.

As to the second and third questions asked, he should realize that to answer them would require a major mathematical exercise. He should also know that, even if I had seen the figures previously, it would be extremely difficult to remember them and to give them in answer to a question without notice.

page 1887

QUESTION

NEW GUINEA

Mr HAWORTH:
ISAACS, VICTORIA

– I address a question to the Prime Minister with relation to the statement made yesterday by Mr. Lappin the Soviet delegate to the United Nations Organization in the General Assembly, when he accused Australia of leading people in New Guinea to extreme poverty and not observing the charter of its trusteeship. Does the Prime Minister propose to reply to this ill-informed, false statement here in Canberra, or does he propose to leave the reply to be made ‘by the leader of the Aus tralian mission, Mr. Plimsoll, at his first opportunity in the General Assembly of the United Nations now in session? Is not this statement by the Soviet delegate monstrous, to say the least, especially as it comes from one whose government in 1958 refused the committee specially appointed by the United Nations and headed by Sir Charles Leslie Munro permission to enter Hungary to investigate repressive measures against the Hungarian people and to report on the liberty and political independence of Hungary-

Mr SPEAKER:

– Order! The honorable member is going a little too far.

Mr HAWORTH:

– And the Hungarian people’s enjoyment of the fundamental human rights of freedom?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– The statement reported to have been made by a representative of the Soviet Union about Australia leading the native inhabitants of Papua and New Guinea to poverty is, of course, an outrageous falsehood. I have no doubt that he knew it was, but he did and said what he was told to do and say. There is no novelty about this, and once more the charge will no doubt be answered in the appropriate place. I heard a similar allegation made in the General Assembly and took the opportunity to dispose of it, I hope in fairly trenchant terms.

This is part of the Communists’ propaganda. They seek to conceal the fact that they have reduced free people to a state of servitude by accusing others, who are leading under-developed people into a state of freedom, of doing exactly the opposite. The record of this country in the trusteeship territory of New Guinea and in Papua is magnificent. Year by year we spend more money, divert more human effort and divert more skill and courage in the field to the improvement of the lot of these people than the Soviet Union ever did in any country in the whole of its history. But, of course, it suits Communists to make these statements. The one odd point is that people can still be found who are sufficiently gullible to believe them. Everybody on both sides of this House knows* this allegation to be completely untrue. The honorable member may take it that at every convenient opportunity in plenary assembly or in committee these lies will be nailed by the representatives of Australia.

page 1888

QUESTION

TELEPHONE SERVICES

Mr COSTA:
BANKS, NEW SOUTH WALES

– I desire to ask the PostmasterGeneral a question. What is the number of telephone applications outstanding in Australia to-day? What is the number of duplex services operating in the Australian telephone system? Is it the policy of the Postmaster-General’s Department to provide a second-rate telephone service - the duplex system - instead of providing a first-class exclusive service for all applicants? Is the Minister aware that existing telephone subscribers resent their services being converted to duplex services? Why does the Postmaster-General not initiate a development plan that will provide an exclusive service for all who apply?

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

– The honorable member for Banks asks why a plan for the provision of an exclusive service to all intending subscribers has not been or is not being developed. I advise the honorable member that of course that is the policy of the department and that the department is steadily moving towards the completion of its plan. It is making steady progress and improvement each year. The honorable member asks how many outstanding applications there are. I have not the exact figure, but I will get it for him. Taking all forms of applications into account, it would be more than 70,000.

The honorable member also refers to the use of the duplex system in providing a telephone service. This is a method which enables the department to provide a service for very many thousands of applicants who otherwise would not be able to obtain a service for the time being. It is used only where the existing subscriber has a low call rate, so that the service can be provided without interfering with the existing service. The honorable member calls the duplex system a second-class service. Certainly it is not an exclusive service, but nevertheless, as I have just said, it is a very good method of providing telephones where otherwise they could not be provided. Immediately an exclusive service can be substituted for a duplex service, action to do so is taken.

page 1888

QUESTION

COMMONWEALTH MUSICAL FUND

Mr FAIRHALL:
PATERSON, NEW SOUTH WALES

– I direct a question to the Prime Minister. In the likely event of the Government’s return to office in December, will the right honorable gentleman give sympathetic consideration to the establishment of a Commonwealth musical fund to give encouragement to Australian musical composition similar to that given to Australian literature through the Commonwealth Literary Fund?

Mr MENZIES:
LP

– The suggestion that has been made by the honorable member is very interesting. I do not think it lends itself to an offhand reply because there are various aspects of it to be taken into account, but I shall certainly have a look at it.

page 1888

QUESTION

EMPLOYMENT

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES

– Is the

Prime Minister aware of the alarming increase in juvenile delinquency and crime as reported by the Commissioner of Police m Queensland yesterday? As it would seem that the steep increase in crime, both among adults and juveniles in Queensland, is directly related to stealing, and as Queensland is controlled by a government of similar political colour to his own, will the Prime Minister use all the means at his disposal to ascertain whether the high level of unemployment and the lack of job opportunities for the youth of Queensland is not directly related to the alarming upward trend in crime in that State?

Mr MENZIES:
LP

– I must compliment the honorable member on the ingenuity with which he associates these matters. Criminal processes or incidence in Queensland, I am happy to say, are not within my bailiwick.

page 1888

QUESTION

MEAT

Mr ENGLAND:
CALARE, NEW SOUTH WALES

– In reply to a question in the House on 12th September, the Minister for Primary Industry stated that the Australian Meat Board would survey the full export position at its next meeting, and that he looked forward to its recommendations. In view of the growing interest on the part of meat producers generally in the scope of activities of the Austraiian Meat Board, is the Minister able to divulge the recommendations made by the board?

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

– At its meeting last week, the Australian Meat Board examined various proposals to develop meat export outlets with particular reference to the Middle East and Asian countries. The board decided to appoint a representative exporter, in whom it would have confidence, to examine all market potentials. It also gave the executive authority to appoint a representative to the trade delegation that will go to the Middle East early next year if the executive thought such an appointment was worthwhile. So the board has taken action. The American market and exports to the American market up to the present are about as good as last year, and prices remain about the same.

page 1889

QUESTION

PAPUA AND NEW GUINEA

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– My question is directed to the Minister for Territories and arises out of a statement by him when introducing legislation affecting the Territories some time ago to the effect that only a comparatively small proportion of the native people of the Territory of Papua and New Guinea came under the labour laws and ordinances, and the majority lived in the traditional way in villages. I ask the Minister whether the labour ordinances and laws are regularly reviewed to make certain that they do not leave the Australian Administration in the Territory vulnerable to the kind of criticism that is directed by the Soviet representative in the United Nations concerning the living standards of native people.

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– As I explained to the House in a recent statement which is still on the notice-paper, a series of measures relating to industrial legislation in Papua and New Guinea is at present before the Legislative Council for the Territory. Under that legislation, if it is passed, one body of workers in future will have access to something in the nature of industrial tribunals so that they may present their own case. They will have assistance in the presentation of their cases from the Public Solicitor and will negotiate their own conditions. In respect of a less advanced group of workers, the ordinances, and the regulations made under those ordinances, are reviewed periodically. For some particular groups, adjustments were made during the last twelve months.

page 1889

QUESTION

GRAVE OF VISCOUNT DUNROSSIL

Mr CHIPP:
HIGINBOTHAM, VICTORIA

– I ask the Prime Minister a question. Can the right honorable gentleman inform the House whether a permanent memorial will be erected over the grave of the late Viscount Dunrossil at St. John’s Church, Canberra? I ask this question because there have been some inquiries about whether the present treatment of the grave site is temporary and whether something more substantial and lasting will be erected.

Mr MENZIES:
LP

– The present treatment of the grave is purely temporary. The Prime Minister’s Department is constantly in touch with the church authorities to see that it is kept in a tidy and respectable condition. The intention is to erect a permanent memorial, and this will be the responsibility of the Commonwealth. Designs for it will be discussed with the family of the late Governor-General because, of course, it is very desirable that whatever is done shall be in accordance with their feelings. All this will be done without any avoidable delay.

page 1889

QUESTION

UNEMPLOYMENT

Mr KEARNEY:
CUNNINGHAM, NEW SOUTH WALES

– My question is directed to the Minister for Labour and National Service. I ask whether it is a fact that the number of people throughout Australia receiving and dependent on unemployment benefit increased from 19,257 in January last to 62,066 in August. I ask, further, whether the Minister is concerned at the deepening and the permanency of unemployment which are clearly indicated by these official figures. Can he state the total number of dependants of the 62,066 persons receiving unemployment benefit at the end of August, 1961?

Mr MCMAHON:
LP

– I have no doubt that the facts are stated correctly in the honorable gentleman’s question. There has been a significant reduction in the number of persons receiving the unemployment benefit since the date he mentioned. A statement relating to the employment position will be issued on Monday and will show the position clearly at the latest recorded date. The number of dependants of persons receiving unemployment benefit, to which the second part of the question relates, has not been contained in the statistics released.

I shall try to ascertain the number of dependants - that is, of wives and the first child - and I shall let the honorable member have the figures if I can obtain them quickly and without difficulty.

page 1890

QUESTION

TELEPHONE SERVICES

Mr ASTON:
PHILLIP, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. As many telephone subscribers are of the opinion that the number of calls charged for is in excess of the number actually made, will the Minister consider providing, in subscribers’ premises, if desired, a meter which would automatically register a live call?

Mr DAVIDSON:
CP

– This is a matter to which Post Office engineers have been devoting considerable attention recently. It has been receiving attention by other telephone authorities throughout the world, also. So far, we have not been able to devise a completely satisfactory instrument for this purpose, but investigations are proceeding with the intention of developing one as quickly as possible. I hope that, before long, we shall be able to install meters for any subscriber who wants them. We shall provide this facility just as soon as we can.

page 1890

QUESTION

IMMIGRATION

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Is the

Minister for Immigration aware of a report which Sir Thomas Playford tabled in the South Australian Parliament, and which showed that the council of the University of Adelaide was fully aware of all the circumstances surrounding Mr. Brenner’s history, and that nothing that the council learned as a result of investigations it made, or of interviews that were conducted, or of anything that the Minister for Immigration was able to tell it had caused it to alter its view that Mr. Brenner is a suitable person to come to Australia as a teacher? Is it also true that Sir Thomas Playford has stated that the university has not yet told Mr. Brenner that his services will not be required?

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

– All I know of what the honorable gentleman refers to is what I read in a newspaper this morning. I have not seen the report furnished to the Premier of South Australia by the university authorities, but I gather from what I have read that the report referred to events leading up to Mr. Brenner’s appointment, whereas, as I have told the House on several occasions, what the Australian Government has been concerned about has relation to information received after Mr. Brenner made application to come to Australia following his appointment.

page 1890

QUESTION

BANK INTEREST

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I direct a question to the Treasurer. The right honorable gentleman no doubt learned during his recent discussions with the International Monetary Fund that interest rates are being used to an increasing extent by various countries as a means of achieving economy control. In view of the fact that excessive pressures in our economy have been eased and most monetary restrictions imposed by the Government have been abolished, will the Treasurer consider a reduction in the bank overdraft interest rate? I ask this question, Mr. Speaker, because the lending capacity of the banks at the present time could be increased, because of a higher level of deposits and the reduction of statutory reserves to the lowest levels reached since the end of the war.

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– The overall economic position, and, of course, such aspects of it as the interest rate to which the honorable member has referred, are studied from time to time by the board of the Reserve Bank of Australia at its periodic meetings. A representative of the Treasury, usually the secretary or his deputy, is normally in attendance at those meetings. It would not be appropriate for me to attempt to give the honorable member a specific answer at this time, but I shall consider his submissions and see that his views are put before the board of the Reserve Bank when it meets, by the Treasury representative, and that the board considers them.

page 1890

QUESTION

COAL

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– My question is directed to the Treasurer. I refer to the substantial subsidy granted by the Commonwealth Government on the haulage of coal from Leigh Creek to Port Augusta in South Australia, as a result of which coal is transported by the Commonwealth for about one-third of the normal freight charges. As there are assured overseas markets for coal produced in the western New South Wales field, and as the exploitation of these markets would obviate the necessity to close some of our coal mines*, will the Treasurer recommend the granting of financial assistance to the New South Wales Government to cover the cost of reducing rail charges for the hauling of this coal to the same extent as charges are reduced for coal transported from Leigh Creek to Port Augusta?

Mr HAROLD HOLT:
LP

– The arrangement to which the honorable member refers was made, I think, when Mr. Chifley held office.

Mr Luchetti:

– Will the Government carry the Chifley plan a little further?

Mr HAROLD HOLT:

– What would be a reasonable freight rate for the carriage of coal would, in the first instance, appear to be a matter in which the New South Wales Government might be prepared to interest itself, in order to benefit coaloperators within that State. What the honorable member has suggested raises an issue of policy. He would be aware that the Commonwealth Government has shown its interest in encouraging the export of coal by the arrangements that it has entered into with the New South Wales Government for speeding up the provision of improved port facilities. In that way, and through our association with the Joint Coal Board, we have, I think, been very largely instrumental in securing an overall result which is such that, whereas when we took office this country was importing coal, we are now in the happy position of being able to export an increasing amount.

page 1891

QUESTION

BROADCASTING

Mr MURRAY:
HERBERT, QUEENSLAND

– I ask the PostmasterGeneral: Will he give some indication when north Queensland can expect either the establishment of an alternate Australian Broadcasting Commission radio station or a more satisfactory reception from the existing alternate station in Queensland so as to give north Queenslanders the opportunity to receive the wider range of programmes and services that is received by listeners in most other areas of Australia?

Mr DAVIDSON:
CP

– The departmental policy on the matter raised by the honorable member for Herbert is, because of certain frequency difficulties, not to establish new stations but to build up the power of existing stations in order to improve reception in areas a considerable distance from capital cities. For that reason it is proposed to increase from 10,000 to 50,000 watts the power of station 4QR in Brisbane, which provides the alternate service. We hope that the work will be proceeded with during this financial year. This extension will provide, we believe, a much better service in the areas in which the honorable member is interested.

page 1891

QUESTION

PACIFIC ISLANDS REGIMENT

Mr BRYANT:
WILLS, VICTORIA

– My question is to the Minister for the Army. Earlier we heard the Prime Minister give a stirring account of progress in New Guinea. I ask the Minister: How long has the Pacific Islands Regiment been in existence? How many Papuans have reached commissioned rank in that regiment?

Mr CRAMER:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– I welcome this question because it gives me an opportunity to give some perhaps valuable information to honorable members. The Pacific Islands Regiment was established by this Government in 1950, and it has many Papuan non-commissioned officers and underofficers up to the rank of sergeant. The point of interest, I think, is that in addition to the Pacific Islands Regiment we have also established a cadet unit in New Guinea. On Sunday last I had the. opportunity of seeing, at the Holy Cross College in my electorate, five young men born in New Guinea, who had reached the position of under-officers. One, as a matter of fact, was the commanding officer of his own cadet unit at the Holy Cross College at Ryde. Great progress is being made in this respect and we are paying great attention to the training - and it is very valuable training indeed - of the the natives in New Guinea.

page 1891

QUESTION

SALK VACCINE

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– My question to the Minister for Health relates to the shortage of supplies of Salk vaccine and the anxiety of mothers of young children arising therefrom. I ask the Minister whether specific inquiries have been made overseas with a view to augmenting supplies. If so, can he give details to provide a convincing assurance that this avenue has been, and is being, thoroughly and assiduously explored? Finally, can he say whether, if such supplies could be obtained, the vaccine would still have to be tested in Australia before being released, and whether diseases in animals or some other cause, at present holding up local production, would also make such testing at present impracticable?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The Government has been very concerned over the shortage of Salk vaccine and I think I can say that it has taken every possible step to make good that shortage. The honorable gentleman will probably recollect that some months ago we imported a consignment of Canadian vaccine when our local supplies turned out to be inadequate. We have also recently been able to make available 300,000 doses which have been distributed to the States. We appointed an expert committee, under the distinguished chairmanship of Sir Macfarlane Burnett, to review our own testing and production methods and we have now in preparation another consignment of 600,000 doses of Australian Salk vaccine which we hope to make available before the end of the year. We have no reason at this stage, at any rate, to think that it will not pass the requisite tests. In addition, we have placed a further order overseas for more Salk-type vaccine in case our own supplies are again proved to be inadequate. However, it is not easy to get supplies from abroad because the main producing countries, Great Britain, Canada, the United States of America and Japan, have all had difficulties in the production of Salk vaccine. However, we are doing our best to augment our own supplies and, as I say, some time ago we placed a further order for overseas supplies. With regard to the question of testing, the Government has always considered that, as it is responsible for issuing Salk vaccine for use in Australia, it should apply its own testing procedure in order to ensure, as far as is possible to do so, that the vaccine is not only safe but potent. Therefore any supplies that we do import from abroad are subject to our own testing procedure.

page 1892

QUESTION

RESERVE BANK OF AUSTRALIA

Mr CALWELL:
MELBOURNE, VICTORIA

– My question is addressed to the Prime Minister. On the 4th October I asked the right honorable gentleman whether he would furnish a statement giving the reason why neither of the two lowest tenders for the erection of the new Reserve Bank head-quarters in Sydney was accepted. He then said that he would look into the matter and I took it that he would make a statement in due course. I hope that he will now be able to make a statement on the matter because the Master Builders Association and the two unsuccessful lower tenderers are pressing for it.

Mr MENZIES:
LP

– I am sorry, but J thought this matter had since been debated. I will be very happy to have a talk to my colleague the Minister for Works about it.

page 1892

QUESTION

IMMIGRATION

Mr BANDIDT:
WIDE BAY, QUEENSLAND

– I direct a question to the Minister for Immigration. Is there any democratic country in the world that is obliged to give reasons for its refusal to grant a vise to any person? Is there any democratic country that grants an intending immigrant a right of appeal against its decision to refuse him a vise?

Mr DOWNER:
LP

– To the best of my knowledge the answer to each of the honorable gentleman’s questions is, “ No “. There has been for a very long time a generally accepted principle that any country in the world has the full right to say who shall or shall not enter it. I remind my honorable friend that this was specifically recognized at the Asian relationships conference in New Delhi as far back as 1947. But apparently there are some people who think that we should make some deviation from what has long been an accepted international practice, and that we should put ourselves in a weaker position than other countries - particularly those which in the international sphere are opposed to us. That, Sir, is a proposition which 1 am sure the Government, the majority of members of this House and most of the people of this country will not accept for one moment.

page 1893

QUESTION

WAR SERVICE HOMES

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– My question is addressed to the Prime Minister. Has the Government given any thought recently to the question of providing increased advances to recipients of loans to purchase war service homes beyond the present maximum of £2,750 in cases where families need threeor four-bedroom homes? Does the right honorable gentleman concede the impracticability of building a three- or fourbedroom home to the specifications laid down by the War Service Homes Division for that amount? If the Government has not considered this matter, will the Prime Minister ensure that it does so, with a view to assisting the parents of large families to house their children satisfactorily by granting supplementary loans?

Mr MENZIES:
LP

– All aspects of repatriation benefits, including war service homes, were examined carefully by the Government during preparation of the last Budget. The Government’s decisions were announced in the Budget. I have nothing to add to them.

page 1893

QUESTION

DISARMAMENT

Mr DRURY:
RYAN, QUEENSLAND

– I direct my question to the Prime Minister in his capacity as Minister for External Affairs. In view of certain statements contained in a paper issued by the Soviet Embassy in Canberra on 9th October on the subject of disarmament and the banning of nuclear weapons, and in particular the statement that the Soviet Union is prepared to sign immediately an agreement on general and complete disarmament with the strictest international control, will the right honorable gentleman give an assurance that, so far as Australia is concerned, the genuineness of this offer will be considered very carefully against the background of the long list of solemn treaties and international agreements which have been broken by the Soviet Union over the years?

Mr MENZIES:
LP

– Perhaps the best way to answer the question is to tell the honorable member that if leave is granted I propose, immediately after question time, to make a short statement on this problem of disarmament and to table certain documents which have passed between some of the major countries.

page 1893

QUESTION

POSTAL DEPARTMENT

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Did the PostmasterGeneral say yesterday that at one stage during the investigation which culminated in the resignation of Mr. Ray Roberts from the Postmaster-General’s Department in Brisbane he, Mr. Roberts, had asked to be advised of his position under the Crimes Act, and whether he was liable in any way to prosecution? Will the Minister state what reply Mr. Roberts received to his inquiry? Further, will the Minister state whether it is very unusual for a former public servant who has resigned to be reemployed in the same position after such a short interval? Was this action taken by the Government because of its anxiety to avoid exposure of the fact that certain provisions of the Crimes Act were intended, and are being used, to prevent public servants revealing public scandals embarrassing to the Government?

Mr DAVIDSON:
CP

– I did state that during the investigation Mr. Roberts asked twice to be advised of the terms of the relevant section of the Crimes Act. At his request, he was so advised. The honorable member for East Sydney also asks whether it is usual for a person who has resigned from the Postmaster-General’s Department to be re-appointed to his position shortly afterwards. As I think I made plain previously, consideration of the question of Roberts’s reinstatement arose from his own request contained in a letter to me which, I think, I advised the House I had received at the time of its reception.

page 1893

QUESTION

BROADCASTING

Mr BROWNE:
KALGOORLIE, WESTERN AUSTRALIA

– My question to the Postmaster-General is supplementary to that which was asked by the honorable member for Herbert. In view of the Minister’s statement in relation to his department’s policy of increasing the power of rural broadcasting stations, will he arrange for the wattage of the proposed station at Carnarvon in Western Australia to be increased from the proposed ridiculous figure of 200 watts which will provide reception only for the townspeople of Carnarvon, not for persons in the hinterland?

Mr DAVIDSON:
CP

– It will be remembered that some little time ago, in announcing the department’s proposals for improving radio reception, I referred to the fact that there were to be increases in the power of the Perth stations and that a low-powered station was to be established at Carnarvon. The intention was to provide a service for an area which it was difficult for the larger stations to service. At the same time, the power of the Perth stations either is being or has been increased to enable them to give service to a much wider area than was possible previously.

page 1894

QUESTION

PUBLIC SERVICE

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I preface a question to the Prime Minister by stating that the right honorable gentleman will recall that eight years ago the Arbitration Court ceased to adjust the basic wage in accordance with variations in the C series index, and that thereupon he repealed the regulations which provided for similar adjustments in the salaries of officers of the Second, Third and Fourth Divisions of the Public Service. Since the Conciliation and Arbitration Commission has now decided to adjust ‘the basic wage annually in accordance with variations in the consumer price index, I ask the Prime Minister whether he will amend the public service regulations to provide for public service salaries to be varied in the same way. If he will not take this course, will the right honorable gentleman explain why he adopted the tribunal’s practice when it resulted in public service salaries being frozen, but refuses or hesitates to adopt it when it would result in their being again adjusted automatically and periodically?

Mr MENZIES:
LP

– I do not want to be committed to the accuracy of what the honorable member has said about the history of this matter on the Public Service side, but I will certainly have a look at it and prepare, on the basis of the facts, some answer to him.

T think I should point out to the honorable member that, as I understood the last decision of the Conciliation and Arbitration Commission, it did not say that in future the basic wage would be adjusted on the basis of. or in accordance with, movements in ‘the consumer price index. I understood it to say that that was a matter which it would take into account in its annual fixation.

page 1894

QUESTION

TELEVISION

Mr KING:
WIMMERA, VICTORIA

– I address a question to the Postmaster-General relating to the establishment of television services at Mount Buangor, Victoria. As it is expected that the Ballarat commercial station will come into operation early next year, I ask whether it is the intention that both the commercial and national stations will use the same mast and transmitter to be situated on Mount Buangor. If so, will this mean that the national station will come into operation at or about the same time as the commercial station? If not, can the Minister explain the reasons why? Further, as it is reported that vertical polarization of antennae will not work satisfactorily in the Goulburn valley for receivals of the Melbourne stations, can the Minister say just how parallel polarization will work in the Wimmera area after the establishment of the station at Ballarat?

Mr DAVIDSON:
CP

– The commercial station at Ballarat will not use the same transmitter as the national station. Separate transmitters will be installed, but both stations will use the same mast. This will assist the commercial station with its capital problems in establishing its own service.

The honorable member asked whether the national station and the commercial station would begin televising at approximately the same time. The position is that we expect that the commercial station will begin televising before the national station. That is due to the fact that, while the commercial licensee at Ballarat has only one station to establish, the PostmasterGeneral’s Department and the Department of Works have the task, at this period, of establishing thirteen national stations. It is obvious, therefore, that there will be some delay as the national job is a much bigger one.

The honorable member asked also how vertical and horizontal polarization would affect reception in the Wimmera area. That is a highly technical problem. I shall obtain detailed information on it for the honorable member.

” HANSARD “ REPORT.

Mr SPEAKER:

– Yesterday, the honorable member for Mackellar (Mr. Wentworth) asked a question in which he queried the accuracy of the “ Hansard “ report of a passage in the speech of the honorable member for Lalor (Mr. Pollard) on the motion for the adjournment of the House in the early hours of Thursday, 5th October. The passage appears on page 1688 of “ Hansard “ where the honorable member for Lalor is reported as having said -

  1. . when referring to another prominent Australian - a non-military man - he said, “ He is a Com.”. I said: “ On what do you base that statement? I resent it. I know the man. He is not a Com.”. He said that it is not a disgrace to be a Com.

I have been informed by the Principal Parliamentary Reporter that in the original text of the report, which was submitted to the honorable member for Lalor for approval, the final part of the quoted passage read -

I said: “ On what do you base that statement? r resent it. I know the man. He is not a Com.”, not that it is a disgrace to be a Com.

When the typescript proof was returned to the “ Hansard “ office the text had been altered to the version that appeared in the printed report, and was accepted in good faith by the “ Hansard “ staff when the honorable member for Lalor explained that this was what he meant to say, and what he believed he had said.

I take this opportunity to remind honorable members of the restrictions imposed upon them in correcting the typescript proofs of their speeches. The slip which accompanies the typescript proofs clearly states -

Necessary corrections may be made, but alterations of sense or the introduction of new matter are not admissible.

In this instance the correction involved a clear alteration of sense, and therefore should not have been made.

Mr Pollard:

– I wish to make a personal explanation.

Mr SPEAKER:

– Order! If the honorable member wishes to make any comment, it will be necessary to obtain leave.

Mr Pollard:

– I ask for leave to make a personal explanation.

Leave granted.

Mr Pollard:

– All I wish to say is that 1 exercised the right that every honorable member exercises to correct the proof to give to the report the meaning that I intended to convey to the House. I have no apologies or explanations to offer other than to say that I hope I have in no way reflected upon the accuracy of “ Hansard “. If I have done so, I regret it very much and I apologize to the “ Hansard “ staff.

page 1895

QUESTION

DISARMAMENT

Mr MENZIES:
Prime Minister and Minister for External Affairs · Kooyong · LP

– by leave - I lay on the table of the House the following papers -

United States Declaration on Disarmament - A Programme for General and Complete Dis.arment in a Peaceful World; and

Joint Statement of Agreed Principles for Disarmament Negotiations prepared by the Governments of the United States and the Soviet Union during their bilateral negotiations on disarmament.

The new United States declaration was presented, as honorable members will be aware, by President Kennedy to the United Nations General Assembly on 25th September. The declaration is one which accords with the most recent Commonwealth Prime Ministers’ communique on disarmament and has the support of the Australian Government. The Soviet delegate at the United Nations has attacked the United States plan and in doing so has again cast doubts on the sincerity of the Soviet claim that they genuinely seek disarmament.

The principles for disarmament set out in the United States Declaration must, I believe, be supported by all those who seek disarmament which is both controlled and verified. These two qualifications are essential to any disarmament plan. The Western powers cannot risk uncontrolled and unverified disarmament when the good faith of the chief country with which they negotiate is open to doubt.

The United States Declaration has as its object the disbanding of national forces, the elimination of armaments and the establishment of an international disarmament organization to ensure disarmament is in fact carried out. It envisages at the same time the establishment of a United Nations peace force to prevent international conflicts. To achieve these ends, it sets out certain principles. These principles which the

United States proposes to guide disarmament are - and they are quite brief -

  1. Disarmament shall take place as rapidly as possible until it is completed in stages containing balanced, phased and safeguarded measures, with each measure and stage to be carried out in an agreed period of time.
  2. Compliance with all disarmament obligations shall be effectively verified from entry into force. Verification arrangements shall be instituted progressively and in such a manner as to verify not only that agreed limitations or reductions take place but also that retained armed forces and armaments do not exceed agreed levels at any stage.
  3. Disarmament shall take place in a manner that will not affect adversely the security of any State whether or not a party to an international agreement or treaty.
  4. As States relinquish their arms, the United Nations shall be progressively strengthened in order to improve its capacity to assure international security and the peaceful settlement of differences as well as to facilitate the development of international co-operation in common tasks for the benefit of mankind.
  5. Transition from one stage of disarmament to the next shall take place as soon as all the measures in the preceding stage have been carried out and effective verification is continuing and as soon as the arrangements that have been agreed to be necessary for the next stage have been instituted.

These are principles which I commend to the House and ones which I believe would provide a sound basis for the immediate re-opening of disarmament negotiations.

The principles contained in the Joint Statement of Agreed Principles for Disarmament Negotiations prepared by the Governments of the United States and the Soviet Union, which I have also tabled, are also welcome to the Government, not least because they are the first positive result of the bilateral discussions which have been taking place since 19th June. The statement, like the declaration, lays stress on the need to implement disarmament in stages; on the need to have balanced disarmament; and on the necessity to combine measures of control and verification with the process of disarmament. But the Soviet Union insisted during negotiations that it could not accept the inclusion of a sentence in the statement which called for verification, after disarmament, of forces and armaments to ensure these did not rise above the prescribed levels. In agreeing to delete this sentence before the statement was publicized, the United States made it quite clear that it in no way abandoned its belief in the necessity for such a provision. It is the inclusion of this provision in the United States Declaration which has brought protests from Mr. Gromyko.

I need say no more regarding the necessity for control and verification during and after disarmament. What I do wish to suggest to the House is that the publication of agreed principles does not mean that the Soviet Union is necessarily ready to negotiate an effective disarmament agreement. In the Joint Statement of Agreed Principles the Russians appear to subscribe to the need for control of disarmament. But what does the Soviet Union mean by control? Mr. Gromyko said on 24th September that the Soviet Union proposed that control should be implemented through an international disarmament organization based on the “ troika “ system. This proposal, with each of the three delegates able to exercise a veto, would make any control system completely ineffective.

The United States, in the declaration outlined by President Kennedy, has challenged the Soviet to go beyond agreement in principle to reach agreement on actual plans for disarmament. It is now for the Soviet Union to show it means business.

I am arranging for copies of the documents I have tabled to be placed in the Library for the information of honorable members who may desire to consult them. Ilay on the table the following paper: -

Disarmament - Ministerial Statement– and move -

That the paper be printed.

Debate (on motion by Mr. Calwell) adjourned.

page 1897

COMMONWEALTH SERUM LABORATORIES

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– by leave - I am in a position to give the House the names of the members of the commission which will, from 2nd November, administer the Commonwealth Serum Laboratories, Melbourne, which have hitherto been under the control of the Commonwealth Department of Health. The four part-time commissioners will be:

The chairman will be Mr. Charles Sinclair Butt, who has been appointed for two years. Mr. Butt was formerly chairman, and is now a director of Olympic Consolidated Industries Limited, and associated companies. He was honorary Commonwealth Controller of Rubber from 1942 to 1945.

The vice-chairman will be Mr. James Arnold Hancock, who has been appointed for four years. Mr. Hancock, who is a chartered accountant, is a partner in the firm of Hancock and Woodward. He is a director of a number of companies.

The other members will be Professor Edgar Samuel John King, Professor of Pathology at Melbourne University, who is a prominent member of the National Health and Medical Research Council, and Mr. Oscar Gwynne Meyer, O.B.E., E.D., managing director of Australian Carbon Black Proprietary Limited, Victoria, who was a Victorian Railways Commissioner from 1950 to 1958. Professor King has been appointed for four years and Mr. Meyer for two years.

All four commissioners live in Melbourne.

The new Director of the Commonwealth Serum Laboratories, who will be the only full-time member of the commission, will be Dr. Ronald Wellesley Greville, M.B., B.S., B.V. Sc., D.A., F.F.A., R.A.C.S., a former Senior Medical Officer in the Consultant Division of the Commonwealth Serum Laboratories, who is at present Medical Superintendent at Geelong and District Hospital, Victoria. Dr. Greville was a captain in the Australian Army Medical Corps from 1940 to 1945.

The commission will assume control of the laboratories as from 2nd November.

I lay on the table the following paper: -

Commonwealth Serum Laboratories Commission - Appointment of Members - Ministerial Statement.

Motion (by Mr. Adermann) proposed -

That the paper be printed.

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

page 1897

COMMONWEALTH GRANTS COMMISSION

Mr HAROLD HOLT:
LP

– Pursuant to section 14 of the Commonwealth Grants Commission Act, I lay on the table the following paper: -

Commonwealth Grants Commission Act - Commonwealth Grants Commission - Twentyeighth report, 1961.

The recommendations contained in the report will be adopted by the Government and the enabling legislation will be introduced shortly.

page 1897

BUSINESS OF THE HOUSE

Suspension of Standing Orders

Motion (by Mr. Harold Holt) agreed to-

That so much of the Standing Orders be suspended as would prevent the consideration tomorrow of the notice of motion standing in the name of the right honorable member for Cowper with reference to the recommendations of the Joint Committee on Constitutional Review in relation to the formation of new States being continued until 6 p.m.

page 1897

SCIENCE BLOCK, ROYAL AUSTRALIAN AIR FORCE ACADEMY, POINT COOK, VICTORIA

Approval of Work - Public Works Committee Act

Mr FREETH:
Minister for the Interior and Minister for Works · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1960, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House: - Construction of a new science block at the Royal Australian Air Force Academy, Point Cook, Victoria.

The proposal provides for the erection at an estimated cost of £190,000 of a twostory, steel frame, reinforced concrete structure comprising laboratories, classrooms, lecture theatres and ancillary offices. The Public Works Committee has reported favorably on the proposal and upon the concurrence of this House in this resolution, detailed planning can proceed in accordance with the recommendations of the committee.

Question resolved in the affirmative.

page 1898

QUESTION

TARIFF PROPOSALS 1961

In Committee of Ways and Means:

Customs Tariff Amendment (No. 8)

Consideration resumed from 11th May (vide page 1800), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1796).

Customs Tariff Amendment (No. 9)

Consideration resumed from 11th May (vide page 1806), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1800).

Customs Tariff Amendment (No. 10)

Consideration resumed from 11th May (vide page 1807), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1807).

Customs Tariff Amendment (No. 11)

Consideration resumed from 11th May (vide page 1808). on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1807).

Customs Tariff Amendment (No. 12)

Consideration resumed from 11th May (vide page 1809), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1809).

Customs Tariff Amendment (No. 13)

Consideration resumed from 15th August (vide page 85), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the eleventh day of May

. (vide page 80).

Customs Tariff Amendment (No. 14)

Consideration resumed from 15th August (vide page 86), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 85).

Customs Tariff Amendment (No. 15)

Consideration resumed from 17th August (vide page 199), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 199).

Customs Tariff Amendment (No. 16)

Consideration resumed from 17th August (vide page 200), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 199).

Customs Tariff Amendment (No. 17)

Consideration resumed from 17th August (vide page 201), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 200).

Customs Tariff Amendment (No. 18)

Consideration resumed from 17th August (vide page 202), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 201).

Customs Tariff Amendment (No. 19)

Consideration resumed from 17th August (vide page 202), on motion by Mr. Osborne -

That the Schedule to the Customs Tarin’ 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 202).

Customs Tariff Amendment (No. 20)

Consideration resumed from 17th August (vide page 212), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 203).

Customs Tariff Amendment (No. 21)

Consideration resumed from 17th August (vide page 212), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 212).

Customs Tariff Amendment (No. 22)

Consideration resumed from 17th August (vide page 212), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 212).

Customs Tariff Amendment (No. 23)

Consideration resumed from 17th August (vide page 215), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 213).

Customs Tariff Amendment (No. 24)

Consideration resumed from 7th September (vide page 990), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 989).

Customs Tariff Amendment (No. 25)

Consideration resumed from 14th September (vide page 1222), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1219).

Customs Tariff Amendment (No. 26)

Consideration resumed from 14th September (vide page 1223), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1222).

Customs Tariff Amendment (No. 27)

Consideration resumed from 14th September (vide page 1224), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1223).

Customs Tariff Amendment (No. 28)

Consideration resumed from 14th September (vide page 1225), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1224).

Customs Tariff Amendment (No. 29)

Consideration resumed from 5th October (vide page 1743), on motion by Mr. Cramer -

That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1742).

Customs Tariff (Canada Preference) Amendment (No. 2)

Consideration resumed from 17th August (vide page 215), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Canada Preference) 1960-61 be amended as set out in the Schedule to these Proposals …. (vide page 215).

Customs Tariff (Canada Preference) Amendment (No. 3)

Consideration resumed from 17th August (vide page 216), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Canada Preference) 1960-61 be amended as set out in the Schedule to these Proposals …. (vide page 215).

Customs Tariff (Canada Preference) Amendment (No. 4)

Consideration resumed from 14th September (vide page 1225), on motion by Mr. Osborne -

That the Second Schedule to the Customs Tariff (Canada Preference) 1960-61, as proposed to be amended by Customs Tariff (Canada Preference) Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1225).

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Amendment (No. 1)

Consideration resumed from 11th May (vide page 1810), on motion by Mr. Osborne -

That, on and after the twelfth day of May, One thousand nine hundred and sixty-one …. (vide page 1809).

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Amendment (No. 2)

Consideration resumed from 15th August (vide page 86), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Federation of Rhodesia and Nyasaland Preference) 1960, as proposed to be amended by Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Proposals introduced into the House of Representatives on the eleventh day of May . . (vide page 86).

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Amendment (No. 3)

Consideration resumed from 17th August (vide page 216), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Federation of Rhodesia and Nyasaland Preference) I960, as proposed to be amended by Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Proposals introduced into the House of Representatives on the eleventh day of May . . (vide page 216).

Customs Tariff (New Zealand Preference) Amendment (No. 3)

Consideration resumed from 17th August (vide page 217), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1961 be amended as set out in the Schedule to these Proposals . . . (vide page 216).

Customs Tariff (New Zealand Preference) Amendment (No. 4)

Consideration resumed from 14th September (vide page 1225), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1961, as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1225).

Excise Tariff Amendment (No. 2)

Consideration resumed from 15th August (vide page 86), on motion by Mr. Osborne -

That the Schedule to the Excise Tariff 1921-1961 be amended as set out in the Schedule to these Proposals . . . (vide page 86).

The CHAIRMAN (Mr Lucock:
LYNE, NEW SOUTH WALES

– Is that procedure acceptable to the committee?

Mr Pollard:

– I wish to register a protest. These proposals cover a very wide range of commodities and it is proposed to lump all the proposals together to facilitate consideration of them. They embrace some hundreds of items and provide for some increases and some reductions of tariffs. The first of the proposals was introduced on 11th May and the last on 5th October. It is pretty tough to expect honorable members to have at the back of their minds all the relevant information and the material they have obtained from reading reports of the Tariff Board, and to debate these items so long after they were introduced.

While I am prepared to fall in with the suggestion of the Minister for Repatriation (Mr. Osborne), it savours of smart tactics. In future when tariff proposals are introduced, the decks should be cleared within four or five weeks. A month would be preferable. The proposals would then be fresh in the minds of honorable members. We are expected to debate to-day, on 11th October, proposals that were introduced on 11th May. It is rather extraordinary that such a long time should be allowed to elapse, and it is unreasonable to ask the committee to debate these proposals in the circumstances. However, in view of the fact that the Opposition favours protective tariffs and the Parliament will end soon, we propose to accept the Minister’s suggestion and take all the proposals as one although some members will be limited in debating specific items.

Mr Osborne:

– With all goodwill to the honorable member for Lalor (Mr. Pollard) I am not unduly impressed by his protest. On the one hand, he claims that the committee will be inconvenienced by the procedure I suggest, but on the other hand he agrees with it. There are two points of substance I want to make in answer to his objections. The first is that the debate on these measures has been brought on with commendable promptitude considering the volume of them. The honorable member remembers as well as I do that when I first assumed responsibility for tariff matters in this chamber nearly six years ago, he objected to long delays in tariff debates. On one occasion, his objection related to a delay of eighteen months.

I gave him an assurance when I was Minister for Customs and Excise that I would do my best to see that such matters were brought on more promptly. We have observed that assurance and the longest period that any of these proposals has been waiting for debate is since last May. The majority of them relate to this sessional period. There is no substance whatever in the honorable member’s complaint about long delays, and that point should be made clear. If the honorable member goes back to the days of his own government, he will find delays in tariff debates, not covering weeks or months or sessions, but years and years.

Mr Pollard:

– That was in an active war and post-war period and we had more difficulties.

Mr Osborne:

– So much for the honorable member’s complaint. The honorable member has suggested that there will be inconvenience ‘because the committee has been invited to debate the proposals as a whole. I think it will meet the convenience of honorable members who take an interest in tariff matters to be free to direct their attention to items of their own choice in the course of one speech better than to be subjected to machine-like discussions of one matter after another in the few minutes available. There is no substance in the honorable member’s objection.

Motions - by leave - taken together.

Mr POLLARD:
Lalor

.- I wish to refer to Customs Tariff Proposals Nos. 8 to 12 which were introduced by the Minister for Repatriation (Mr. Osborne) on 1 1 th May. They deal with canvas and duck, cotton sheeting, animal and vegetable fats and oils, umbrellas, hand tools, barytes, and xanthates. The list covers a fairly wide selection of commodities. Regarding canvas and duck, the Minister has informed us that the Tariff Board has recommended that protection be extended to a larger range of cotton sheeting than at present but that the duties be reduced. The proposition was that, generally, duties ought to be increased in order to protect Australian industry, but the Tariff Board has recommended some reductions, which amount to approximately 10 per cent, ad valorem, on most kinds of sheeting.

I suggest that more time should have been allowed before reducing duties, and I take this opportunity to say that there is abroad in the community - I think with some justification - a feeling that, whereas, until some months ago, the Tariff Board showed a fairly strong protectionist tendency, some of the board’s more recent recommendations have shown a tendency to reduce some duties and not to grant the measure of protection previously accorded when the board has been appealed to by Australian industry. That is the current belief, and I am inclined to take some notice of it. In saying that, I do not mean to say that the board should not at times remove some measure of protection when it is considered no longer necessary.

The Minister for Repatriation told us that the protection in regard to cotton sheeting does not extend to sheeting weighing less than 4 oz. a square yard and that this has led to a diversion of demand to very light sheeting. The proposals aim at closing this gap in the present protection. He told us that the Tariff Board considers that reduced duties on normal weights of sheeting will provide adequate protection. In effect, this means, I take it, that a measure of protection on one kind of sheeting tended to create too high a demand for another kind. To be just to the Tariff Board, we must agree that perhaps this was hardly suited to the maintenance of the industry as a whole in a sound economic condition, I think the Minister will agree that that is the reason why the reduction in duties has been suggested. In those circumstances, a reduction is probably justified, but that does not say that we ought not to guard closely against any decision to reduce tariffs.

At this stage, I suggest that the reasons for the large number of items having been before the Tariff Board are, without a shadow of doubt, the removal of import restrictions with the abandonment of import licensing, the Government’s economic squeeze and credit restrictions, and a partial crippling of Australian industry. These things have forced a vast range of Australian industry to appeal to the Tariff Board for protection. In some instances, protection has been refused. In other instances, such as the cellulose acetate flake industry, a bill concerning which will come before us at a later stage, protection has been accorded from time to time by bounty. I notice that the report of the Tariff Board on the cellulose acetate flake industry suggests a bounty in order that the price of the manufactured textiles shall not tend to increase. That being the case, 1 do not know why cellulose acetate flake is singled out for protection by bounty on the one hand and why, on the other hand, we have very many cases in which tariffs are increased. In most instances, although a rise in consumer prices results, we have tariff protection rather than protection by bounty. That, I think, describes the situation properly.

The Minister told us, also, that the tariff proposals will make twill sheeting dutiable at the same protective rates that are imposed on the more common plain or matt sheeting. The situation in respect of canvas and duck is similar to that in respect of cotton sheeting.

Then we come to animal and vegetable oil and oil seeds. Here, again, the Tariff Board has recommended duty-free admission of oil seeds and nuts of types not grown in Australia, and no change in the duties on other seeds and nuts. Immediately there arises the question of whether the admission of these oil seeds and nuts duty free will in any way endanger Australia’s dairying industry. If the oils extracted from these seeds and nuts are suited to, and likely to be used in, the manufacture of margarine, the refusal of tariff protection will further endanger the Australian dairying industry. The Tariff Board has, in general, recommended duties of 4s. a gallon most-favoured-nation rate on edible oils and ls. 6d. a gallon on inedible oils. Exceptions are linseed oil, for which the board has recommended a duty of 2s. a gallon, and olive oil, for which a bounty of ls. 6d. a gallon is recommended. Duty-free entry has been recommended for some oils which are not produced in Australia or which the board found did not require protection against imported oils. Examples are palm oil and unrefined coconut oil. These two oils are to come in duty free, but, as I understand the situation, Mr. Chairman, they are the very oils that can be used in the production of margarine. I should like to know what is in the mind of the Government and of the Tariff Board in allowing in duty free these oils which can so easily be used in the manufacture of margarine, thereby further endangering our dairying industry.

The Tariff Board has recommended, also, that a proportion of the local requirements of linseed oil, safflower oil, which, I think, can be used in the production of margarine, soya bean oil and peanut oil be admitted under by-law. The board has recommended that the Australian olive oil industry receive increased assistance. I concur in that. A bounty of ls. 6d. a gallon has been recommended. The board has recommended no change in the duties on animal and fish oils, free entry of oil cakes and meals, and increased duties on tall oil and fatty acids. These last products are used in the soap and paint industries. It looks to me as if this is an instance in which an Australian industry which has asked for the imposition of increased duties has been refused something which probably would have been amply justified.

I come next to hand tools. The rates of duty proposed by the Tariff Board vary from 25 per cent, to 27£ per cent, under the British preferential tariff and from 32i per cent, to 35 per cent, under the intermediate tariff. The result will be increased duties on some tools and reduced duties on others. So, here again, we get a 50-50 kind of recommendation, favoritism being extended to some Australianmade hand tools. My own opinion is that all Australian-made hand tools ought to be amply protected. The Australian industry provides a very large measure of employment for Australian workmen, artisans and technicians. The quality of the Australian product is very good. In most instances, it is altogether equal to that of the imported article. I suggest, as I have always suggested with respect to increased protection for Australian industry, that there ought to be some method of examining from time to time the quality of locally made articles.

Then we come to xanthates. The production of xanthates is accorded protection against imports of sodium and potassium alkyl xanthates from most-favoured-nation countries at a proposed rate of 15 per cent. ad valorem. The British preferential tariff remains unchanged, admission being accorded duty free. Sodium and potassium alkyl xanthates are used mainly in the mining industry as flotation reagents. Barium sulphate is the next item. Barytes is a mineral earth used mainly in the paint industry as a dry colour and filler and in the oil industry as a lubricant in drilling operations. In respect of barytes, which is the name given to barium sulphate in its natural state, the Tariff Board has recommended no change except the deletion of a redundant by-law item. The Minister told us that the opportunity is being taken to revise the wording of the main items for these goods without alteration in rates of duty.

Then we come to the section dealing with umbrellas. The Minister said -

As to umbrellas, on the advice of the Tariff Board the protective duties on the normal types of umbrellas are being increased. The duties now proposed are 3s. each plus IS per cent. British Preferential Tariff and 3s. each plus 47i per cent, otherwise.

The Opposition does not object to an increase in the tariff on umbrellas, because it we cannot make umbrellas in Australia we cannot make anything. They are comparatively simple articles to make. All we do suggest is that in regard to all these tariff items, some time, some day, some government will have to take action to see that the consuming public is protected against manufacturers who are receiving protection by means of tariffs.

Mr Osborne:

– You are now putting the opposite view to that which you were putting a while ago.

Mr POLLARD:

– Not at all. All I am saying is that when tariffs are increased, some time, some day, some government will have to take action to see that the sole benefit of the increase of tariff is not reaped by manufacturers, that some benefit should be passed on to the consumer, that the public should not be exploited.

The Minister then dealt with Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Proposals. These are associated proposals. Does the Minister intend that we should deal with all these items?

Mr Osborne:

– I think it would be best to go through with them all.

Mr POLLARD:

– There are 29 or 30 of them. I am quite agreeable to the suggestion that we deal with them all, but how much time will I have?

The CHAIRMAN:

– The honorable member will have the usual fifteen minutes. Then he can ask for a second call, if he wishes.

Mr POLLARD:

– That means I will have only half an hour to deal with 29 or 30 tariff items.

Mr Osborne:

– If the honorable member requires more time he will not find me unreasonable.

The CHAIRMAN:

– The honorable member can always ask for leave to continue.

Mr POLLARD:

– I am sure the Minister will not be unreasonable, because he knows that I am not unreasonable when dealing with tariff proposals.

The next matters to be dealt with are Customs Tariff Proposals Nos. 13 and 14, introduced on 15th August. Proposal No. 13 covers refined petroleum products. It was explained’ by the Minister, and the Opposition approves of it. It has been introduced mainly to cope with the situation that arose as a result of increased refining in Australia. Proposal No. 14 provides for temporary duties on certain man-made fibre piece goods and on certain sizes of nonfolding knives made from strip steel. The temporary duties are at rates of 25 per cent, ad valorem on the piece goods and 10 per cent, ad valorem on the knives and, in each case, are in addition to the existing duties. This proposal has some merit, because the industries concerned were very hard hit by the abolition of import licensing, by the credit squeeze and by other economic measures introduced by the Government. I do not think I need elaborate further on those proposals.

Mr Forbes:

– Tell us about that binder.

Mr POLLARD:

– You can have that story at a later stage if you like. It is always worthwhile as an illustration.

Mr Kelly:

– Is it still in repair?

Mr POLLARD:

– No, it has gone into the discard, but the parts will be very useful.

The CHAIRMAN:

– Order! The honorable gentleman’s time has expired. The committee agreeing, the honorable member may take his second period.

Mr POLLARD:
Lalor

.- I thank the committee for its indulgence in allowing me to continue. I shall now deal with proposals introduced by the Minister on 17th August, covering nitrogenous fertilizers, woollen textile fabrics weighing over 4i oz. per square yard, certain papers and paper boards, polyethylene resins and moulding compounds, electric clocks and movements, chloropicrin, glucose, and copper and brass sheet and strip of less than i in. in thickness. I do not intend to deal with them all. It would be an impossible task. It would take at least fifteen minutes, and even half an hour, to deal with any one of these items. It is impossible to deal with them adequately and I shall not attempt to do so.

Mr Anderson:

– You have very few Labour Party members in your audience.

Mr POLLARD:

– That is all right; you look after yourself.

I now come to proposals, Nos. 25, 26, 27 and 28, introduced on 14th September. These provide for alterations in duty on vinyl and vinylidene products, canned meats, and Styli of the type used with sound reproducers. They also deal with twine used for fishing and rabbit netting - no doubt the honorable member for Mallee (Mr. Turnbull) could hold forth at length on that item - micrometers, and goods exported for repair or renovation by the original manufacturer. There are also some Customs Tariff (Canada Preference) and Customs Tariff (New Zealand Preference) Proposals consequential on the main proposals.

In his speech explaining these proposals the Minister referred to the fact that, following a report by a deputy chairman of the Tariff Board, a temporary duty of £10 a ton was being imposed by Proposal No. 28 on various writing and typewriting papers.

I want to refer to the subject of canned meats, because there has been a lot of controversy in this Parliament recently concerning the importation of canned meats. I have read the report of the Tariff Board on “Canned Pigmeats, Customs Tariff (Industries Preservation) Act 1921-1957, and Meat and Preparations of Meat in Airtight Containers “. I was rather surprised at some of the information revealed therein. It appeared to me that certain big meat processors in this country were not interested in protecting some of their products. It seemed to me that the reason for this disinterest was that they were, in the main, members of an international organization and were quite happy to go along under the existing conditions. However, the Tariff Board made certain recommendations, as a result of which a measure of increased protection will be afforded in regard to some of these items. The board’s report lists the following findings and recommendations: -

On the reference from the Minister for Customs and Excise the Board finds that -

a subsidy has been paid on the production of canned hams and canned pork luncheon meat exported from Canada to Australia and those goods are of a class or kind produced in Australia;

expressed in the currency of the country of origin the amount of the subsidy paid on the canned hams was 48.42 Canadian dollars per 100 lb. and that on canned pork luncheon meat 35.42 Canadian dollars per 100 lb.;

as a consequence of the importation of subsidized Canadian canned hams, detriment has been caused to an Australian industry and may continue to result if further quantities of subsidized canned hams were imported from Canada;.

detriment may result to an Australian industry if subsidized canned pork luncheon meat were to continue to be imported from Canada.

On the reference from the Minister for Trade the Board recommends that -

meat and preparations of meat in airtight containers, at present classifiable under Tariff Item 74 (c), but excluding poultry, game, or soups, be dutiable as follows:; -

Then follows the rates of duty. The board recommends - and this puzzles me - that -

  1. liquid meat extracts be admitted free of duty under the British Preferential Tariff and that the rate of duty imposed on imports from Most-Favoured-Nation sources be fixed at the lowest level consistent with international commitments; and that -
  2. the rates of duty on the goods under reference at present classifiable under Tariff Item 74 (b), but excluding those mentioned under (b) above, be not varied.

In regard to (b) it appears to me that the recommendation is made with a knowledge of the fact that we have certain obligations under international commitments - under the General Agreement on Tariffs and Trade, I suppose - and therefore, despite our balance-of-payments problem, there is no proposal to impose a. higher tariff on liquid meat extracts. That is to say, that whilst this country produces an enormous quantity of liquid meat extracts and, I think, exports some, it appears that it cannot impose a duty on such extracts imported from Canada. That seems to be a very strange state of affairs, because I cannot see any reason why, apart from these so-called international commitments, liquid meat extracts should be allowed to come in here and endanger the Australian industry.

Now I turn to the boards’s report on styli for sound playback equipment. This is a product used for the making of playback equipment such as gramophones and dictating machines. The Tariff Board recommends that this equipment - be admitted free of duty under the British Preferential Tariff and that the rates of duty under the other columns of the Customs Tariff be set at the lowest levels consistent with international commitments.

Again the recommendation is based on some international commitment - probably Gatt, although the board does not say.

Then we come to vinyl products which include vinyl monomers, &c, which are products of the chemical industry.

Mr Kelly:

– What do they do?

Mr POLLARD:

– If the honorable gentleman will see me after, I will make an endeavour to explain it to him. Such goods are products of the chemical industry in Australia, and I understand are made mostly by C.S.R. Chemicals Proprietary Limited, Imperial Chemical Industries of Australia and New Zealand Limited, and Moulded Products (Australasia) Limited. This product has all sorts of industrial uses. Again we find there is an alteration in duty giving an additional measure of protection. To me it seems strange that a great, powerful and financially strong company or corporation like the I.C.I.A.N.Z. concern should expect tariff preference on some of its products which at the moment it might find it unprofitable to produce. It sometimes intrigues me to find these big companies applying for this measure of assistance from the public purse. When they cannot get it, what do they do? They promptly stage a strike. This applies to the C.S.R. Chemicals Proprietary Limited in respect of vitamin C products. I have a press cutting here which bears the heading “ Vitamin ‘ C ‘ Production Here Ceases “. The item reads -

The only Australian firm which produces Vitamin “C” and its derivatives - C.S.R. Chemicals Pty. Ltd. - has ceased manufacture of the commodity.

The company has said it will import Vitamin “ C “ to supply existing Australian customers.

C.S.R. said the Tariff Board’s refusal to grant a protective duty had forced it to abandon production.

That is a very bad state of affairs. Here is an Australian company able to produce Vitamin C but, being unable to get the price it wants for it, decides to import this product from the United States of America, thus further affecting our already seriously adverse trade balance with that country. That is what you would call an unseen strike. If wage earners decide that they will not work any longer because it is not profitable for them and strike in order to increase wages, their trade union is sometimes fined as much as £500 for what is termed by this Government an offence.

I think that I can leave the rest of the items covered in these reports, and say that to the extent that they are protected we are all for the protection, and that to the extent that they are not protected we are not very enthusiastic about that lack of protection. I now come to the item which deals with ball point pens. We have in Australia a ball point pen industry which recently found itself in difficulties, and under Customs Tariff Proposal No. 24 there is provision for a temporary duty of Id. each on ball point pens and pencils which have a value, for duty, not exceeding 4id. That is pretty cheap. The new rate was to take effect on 8th September, the day after the proposals were brought down, and was imposed on the recommendation of a deputy chairman of the Tariff Board. Here again we have a situation where an Australian firm, I think situated at Lithgow, in the electorate of the honorable member for Macquarie (Mr. Luchetti), is affected. We cannot object to that, because it is much better to have an Australian industry turning out the enormous quantity of ball point pens used in Australia than to import them. That is all I have to say on these subjects.

Mr Kelly:

– What about the binder?

Mr POLLARD:

– The honorable member would not suggest that the binder is not a very good illustration of the capacity of either importers or exporters, operating under tariffs or bounties, to exploit the Australian consumers. It reinforces my point that at least we can get at people who exploit the Australian consumer, by means of income tax and in other ways, including the payment of adequate wages and salaries to their workers. I do not intend to go into any detail on that illustration so I will leave it at that.

Mr KELLY:
Wakefield

.- I was relieved that at the end of his speech the honorable member for Lalor (Mr. Pollard) again brought out his ancient reaper and binder and drove it round the paddock at least once. I think we all look forward to these tariff debates, and I know the anxiety with which the honorable member for Lalor goes down, greases the machine up, brings it out and drives it round clinging a bit precariously to his seat and maybe using the whip a bit and his voice a lot when the going gets tough. At least we know that we are going to see it again, and we hope that we will see it for many years yet.

I want to direct attention to the quality of some of the recent Tariff Board reports on which these tariff alterations are based. I take it that it is a function of the Tariff Board to make an economic judgment as to whether an industry is economic and efficient, and to calculate the extra cost to the economy and other industries of any recommended duty. The Minister having received the economic assessment then has to make a political judgment. It is not only the Minister who relies on this economic assessment. The ordinary private member relies on it, and so does the rest of the community. So it is important that a Tariff Board report be a competent economic assessment. The cases I will now give are clear evidence that sound judgments are not always made.

In the recent Tariff Board report on umbrellas the majority report of the board recommends that the existing duty of 47± per cent. M.F.N, be raised by a specific duty of 3s. per umbrella in addition to the existing 47± per cent. rate. This would give a total duty of approximately 100 per cent., allowing for the difference in quality between the imported and locally made umbrellas. The majority report stated: -

Having regard to the efficiency of this longestablished industry -

Remember that the industry already had the advantage of a 47* per cent, duty before the inquiry - - the board considers that the industry warrants increased protection.

The minority report, signed by Mr. Boyer, recommended against an increase of duty. He pointed out that the industry was far from being an infant industry, that most of the components in the locally made umbrellas were imported and assembeld here and that - this is a remarkable figure - it appeared that the cost of the imported umbrella was 40 per cent, less than the cost of the imported components from which the locally made umbrella was assembled. In view of these facts and others Mr. Boyer felt that the industry was not efficient and not economic and that additional protection could not be justified. J also find it difficult to find that an inefficient industry needs a 100 per cent, duty.

In the case of canvas and duck, the majority report of the board recommended for lightweight material a combination of a specific anil ad valorem duty, which appears to give a total protection of approximately 80 per cent. The minority report, again signed by Mr. Boyer, recommended against an increase in duty on the ground that the industry did not appear to be economic or efficient. He made these points: That an increase in duty would raise the costs of other industries, including export industries; that the industry was not an infant industry, and that the industry had made faulty judgments as to the potential total demand and that the rest of the community should not be expected to pay for them. He also said -

There appears to be little price competition in the Australian industry and extending protection will remove the major element of competition.

He then made the devastating calculation that the excess cost to the community of providing the extra employment worked out - 1 would like the committee to remember this figure - at about £750 a year for each person employed, in addition to the wages received. In view of these comments, which the majority report made no attempt to refute, it is hard to escape the conclusion that the majority report is a quite unsound judgment. It is worth remembering that these prohibitive duties are aimed at Indian production. We in Australia are very vocal about our desire to help India, but when she starts to climb out of the morass by establishing industries and trying to do the things that we are always urging her to do, we raise prohibitive duties against her products. We give her Colombo Plan aid with one hand and slap her down with the other.

The third report that I want to deal with is that on narrow fabrics, and in order to keep things simple I propose to deal with this question under the same broad classifications as were used by the board, namely, tapes and webbing, mainly made from cotton, and ribbons, mainly made from man-made fibres. In the case of tapes and webbings the full board recommended increases of the duties, which were then 5 per cent. British preferential rate and 22i per cent, mostfavourednation rate, to 27£ per cent. British preferential and 45 per cent, most-favoured-nation. This recommendation was accepted by the Government. This is a big increase in the rate of duty in both columns and must be loked at with suspicion. It appears to me to transgress the Government’s announced policy of protecting only economic and efficient local industry. A well-established industry that requires protection at the rate of 45 per cent, must be either uneconomic or inefficient.

However, it is the other classification of narrow fabrics, namely ribbons made from man-made fibres, which alarms me. The old rates were 22i per cent. B.P. and 40 per cent. M.F.N. This can only be regarded as very heavy protection, but after inquiry three members of the board recommended an increase of the already high rates. Taking the M.F.N, column, the duty was to be a specific duty of one penny a linear yard, less 12i per cent, ad valorem, with a proviso that the duty would not fall below 40 per cent, ad valorem. No attempt was made in the report to estimate what this rate is on an ad valorem basis, and I think this is a very significant omission.

Again, Mr. Boyer submitted a minority report on this section and recommended that the old duties be unchanged. The reasons for his opinion are set out and should be carefully considered. He argued that the rate of duty recommended by the other three members would give a minimum tariff rate of 40 per cent. M.F.N., rising to several hundred per cent., and with an average incidence of over 80 per cent. In his opinion protection of this magnitude was unjustified, in terms of the Government’s policy to protect only economic and efficient industries. He pointed out that the Australian demand was so variable and so limited that the Australian industry was not able to make sufficiently large quantities of any particular size, quality and type of ribbon ever to be able to compete with large-scale production overseas. He also pointed out that the yarn from which these ribbons are spun had already received a bounty to keep it competitive with imported yarns, so it was not the cost of the raw material which led to the increased cost.

With regard to the cost of existing protection Mr. Bayer had some telling comments to make. He said -

The existing duties on ribbons (22i per cent. B.P. and 40 per cent. M.F.N.) seem likely to have involved an extra cost to users of approximately £210,000 in 1959-60. Customs receipts accounted for approximately one-third of this amount. A “ net national cost “ (in terms of resource utilization) assessed on this basis would thus be about £140,000 per annum. This subsidy to sustain local ribbon production in that year approximated 35 per cent, of the funds employed. In terms of maintaining employment in this industry it was equivalent to a subsidy of about £700 per employee per annum.

And this was at the existing rate and not at the higher rate recommended. He then went on to try to assess the cost of the proposed increase in protection, but found that he could not assess it sufficiently accurately to state a figure. But he con cluded that the cost of the additional protection would certainly be higher than at present, which is a 35 per cent, subsidy on funds employed, and that there would be a £700 subsidy for every person employed in the industry. The other board members dismissed these arguments with the bland statement that they could not agree with them, but made no attempt to refute them. They did not even attempt to put an ad valorem figure on the specific duties they recommended.

I am sorry to say that the Government followed the majority recommendation. After all, if the Government really means what it says - that it only believes in protection of economic and efficient industries - how can it justify a duty of 80 per cent, for an industry that is already protected by a 40 per cent, duty and has been in operation long enough to be able to stand on its own feet? It should be realized that the increased duties are mainly aimed at Japanese production, and that Japan buys most of our wool. One would think that the Japanese Trade Agreement would be in jeopardy if this kind of thing happened often. And then where would we be, particularly with Britain likely to join the European Economic Community?

I would like to congratulate the board on its searching examination of the complicated and difficult subject of vegetable fats and oils. It is complicated because of the interrelation between the various fats and oils involved. In my opinion the Tariff Board gave the matter a very careful examination. I was particularly impressed by the section of the report dealing with peanuts. I had occasion to look very closely at the Queensland peanut industry during my work on the Forster committee and I came to the same conclusion as the Tariff Board, namely, that the Queensland Peanut Marketing Board is only really interested in the production of edible peanuts, but also hopes to get as high a price as possible for the reject nuts or surplus edible nuts. In my opinion the Queensland peanut industry has been particularly well treated, although I am well aware that it does not share this view. The duty on imported peanut oil before the Tariff Board report was 5s. a gallon M.F.N. The Queensland Peanut Marketing Board asked for 10s. a gallon duty, instead of which it received a 4s. a gallon duty - a drop of ls. a gallon. But in addition, they receive a very considerable benefit by duty-free entry under by-law. About two-thirds of the peanut oil which comes into Australia is duty-free so that it can be mixed with the dearer Australian peanut oil and sold at a price which enables it to compete with the oil on which duty is paid. This concession is of tremendous value to the Queensland peanutgrowers, but it is one that not many people know about. Nor do many people realize the true significance of by-law entry. The amount of avoided duty on peanut oil which was imported in 1957-58 was £324,000; in 1958-59 it was £284,000; and in 1959-60 it was £249,000, making a total in three years of nearly £858,000. This considerable amount can be .regarded only as a subsidy paid out of general revenue to the Australian peanut-growing and crushing industry. It represents a considerable assistance to any industry, and I think that the Australian people should be told what is going on. But this matter was not even mentioned in the Tariff Board report. Some honorable members may say that it is only peanuts, but over £300,000 is a considerable amount of money.

The CHAIRMAN:

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

Mr KELLY:
Wakefield

.- With the concurrence of honorable members I shall take my second period now.

When I was at Kingaroy with the Forster committee I was met by the continual complaint that the Minister for Primary Industry (Mr. Adermann), who represents the district in this place, was not giving the Queensland peanut industry a fair go. Knowing something of the amount of this hidden subsidy, I must confess that I was amazed at the complaint. On one occasion I went so far as to suggest to the Queensland Peanut Marketing Board that it should erect a statue to the Minister in the town square and crack a bottle of port wine over it every New Year’s Eve because if ever an industry has received great consideration it is the Queensland peanut industry.

The benefits of by-law entry for imported oils are not confined to peanut oil. From 1957 to 1960 linseed oil which was imported under by-law avoided duty amounting to £276,000, safflower oil avoided duty of £5*6,000 and soya bean oil avoided duty of £14,000. The total amount of these hidden subsidies for peanut, linseed, safflower and soya bean oil for three years is over £1,200,000. This is a very considerable assistance to the fats and oils industry. But again, there is no mention of these figures in the Tariff Board report.

If the new rates of duty had applied, and if the same quantities had been imported and avoided the new duty, the amounts of hidden subsidy would have been lower for peanut oil. The amount for the last three years would have been £739,000. However, the rates on the other oils would have been higher. Linseed oil would have risen from £276,000 to £676,000 and safflower and soya bean oils also would have shown an increase. The total amount of hidden subsidy for the four oils had the new rates of duty applied for the three years to which I have referred would have been just over £1,500,000.

The exporting industries have become almost resigned to having to carry the cost of protection. In this case, although they still are carrying the cost of the increased duties, it is very refreshing and a pleasant surprise to find the general taxpayer also being asked to carry some of the load. We ought to realize exactly what we are doing with this by-law entry provision. It sounds such a delightfully simple solution and no one seems to be paying the cost. But the general taxpayer is paying the cost, as general revenue does not receive the amount of duty that the increased cost of the various oils justifies. It is a very neat, hidden subsidy.

This hidden subsidy or, to put it more politely, this loss in excise revenue, is much more serious for the tobacco industry. If some one looked at the tobacco industry critically, came out in the open and told us what the tobacco industry was costing the country in loss of excise revenue, most of us would be surprised.

Let me return to the peanut industry. It was the opinion of the Forster committee that if the Northern Territory grower could gear himself to the production of peanut oil as distinct from edible peanuts, and could concentrate on oil varieties of nuts and could make use of the economies of bulk handling, he could probably undersell the Queensland peanut-grower who has a much smaller acreage and runs a considerable risk of damage at harvest time. However, we had to turn away from this because we could not find an economic use for the peanut meal which is a by-product of peanut oil production. But if at some time in the future an economic use is found for this meal the people of Australia should realize that the peanut-grower in the Northern Territory has as much right to this kind of generous protection as has the peanut-grower in Queensland. 1 should like to make one other comment on this matter. In reading through the evidence in the board’s report I must admit that I was most concerned about the attitude of the Queensland Grain Growers Association. Evidently, when it comes to asking for assistance for any of the association’s various industries it has no principles such as one would think would guide an industry group which was alive to the need of keeping down the cost of protection. The association evidently works on the principle that because secondary industries in Australia receive a large measure of protection it is justified in asking for excessive protection for any industry in which it is interested. The association does not seem to realize that by asking for these ridiculously high rates of protection it loses all the moral force of the argument which it advances on other occasions, namely, that the cost of protection to, say, the woolgrowers or the wheat-growers should be kept within bounds.

I should like to direct one question to the Minister for Repatriation (Mr. Osborne) who is in charge of these tariff proposals in this place. The Tariff Board recommended a bounty of ls. 6d. a gallon for five yeaTS on olive oil produced in Australia. The Government, however, did not follow this recommendation. Instead it imposed a duty of 3s. 6d. a gallon M.F.N. Why was the Tariff Board’s recommendation not followed in this matter? It seems to me to be much fairer that a new industry should receive its protection in the form of a bounty where the cost is clearly seen rather than that the industry should receive protection in the form of an increased duty where the cost to the community is hidden. I would appreciate the

Minister’s explanation of why the Government did not follow the Tariff Board’s recommendation.

Let me deal now with hand tools. The Tariff Board report recommends that the duty on axes be raised from 22£ per cent. M.F.N, to 35 per cent. M.F.N. The humble axe is not notable for the number of its moving or constituent parts. Honorable members will remember the story about the old man who pointed with pride to his axe which, he said, had been his constant friend for 55 years. And during that time the axe had had only two new heads and five new handles! The steel in the axe head costs less in Australia than it does overseas and the hickory for the handles comes in duty free. It is very hard, therefore, to see how a duty of 35 per cent, against axes imported from most favoured nations can be justified.

The same comments apply to spades and shovels. They do not seem to me to be marvels of mechanical ingenuity but they too need a duty of 35 per cent. M.F.N. Then there are pitchforks. I admit that they have three prongs, but surely they are not as hard to make as they are to use. Where is this kind of thing to end? I can well imagine how the local industries justified their early protection 20 or 30 years ago by claiming that they were infant industries, or that they were forced to use local expensive steel, but neither of these excuses holds good now. What other justifications can there be for the industry’s need for this high rate of protection except that it does not happen to be good at making axes and shovels? So we all pay more, and surely no one can call an axe or a spade a luxury!

I have dealt with several particular Tariff Board reports, and have said how I could not help but have some doubt about their conclusions. With this thought in mind, I eagerly awaited the annual report of the Tariff Board. I hoped that I would be able to obtain from this a clearer picture of the principles the board follows. Again I was disappointed. The annual report gave no clear picture of the ability of the exporting industries to absorb excess costs of higher protection. There was no measurement of movement in freight and handling costs, though these are obviously important from two points of view. High freight costs affect the competitive position of our export industries, and they also increase the protection for local industries. But they are not mentioned. The effect of primage duties is not mentioned.

In paragraph 82 of the annual report mention is made of the high cost of caustic soda and soda ash in our economy, and of how these are important to other industries. Comparative prices are given in Table 14. They show that dense soda ash costs £34 in Australia as against £17 in the United Kingdom, that light soda ash costs £37 5s. in Australia as against £17 lis. 5d. in the United Kingdom, and that caustic soda costs £65 in Australia as against £40 3s. 3d. in the United Kingdom. But there is no mention of the fact that these prices are made possible by a freight cost of £14 a ton and by high rates of British preference duty of up to £7 a ton. And these were recommended by the Tariff Board! In the statistical section where wages costs are compared, no examination is made of how many of the industries which come before the board asking for increased protection are paying over-award wages. Surely this is important. It is very simple for an industry to come before the board and ask for higher duties because it has higher wage costs than its overseas competitor when these high wages often have a large component of over-award payments. The question whether we should be channelling protection to those industries which may have some hope of exporting in the future is not mentioned. In fact, the ability of manufacturing industry to export is not mentioned at all. I expected to find a break-up of secondary industry exports. But there was nothing. There was no mention of the actual performance of those industries which justified their protection 30 years ago on the score that they were infant industries then. Do they still need their mother’s milk at 35? Nor was there any mention of where we go from here. Should not we be turning away from the labour intensive industries where we are at a great disadvantage with cheap labour countries and concentrating our efforts on the capital intensive industries, particularly those based on our cheap iron and steel, where we have a natural advantage?

The examination that the Tariff Board’s report gives of the economy can be com pared to the examination given a car on a long-distance trial - the air in the tires and the oil level are checked, and fuel consumption is measured, but no one troubles to discuss the road ahead, what changes have occurred in the surface or what obstacles have to be avoided. In short, where are we now? Where are we going, and how do we get there?

Perhaps this is not the function of a Tariff Board’s annual report. Perhaps it is proper that the report be confined to the trivia of tariff making. But if this is so, to whom shall we look? It seems to me that the Tariff Board is just drifting with the tide, with no clear principles to guide it. This discussion brings into clear relief the necessity for another inquiry into our tariff policy. Do we really know where our past tariff making has got us? Do we know where we are going from here, and the road we should follow? If the Government can answer these questions, then well and good, but if it cannot, I suggest the time is ripe for a high level inquiry into the effects of our tariff policy.

Mr FORBES:
Barker

.- I should like to congratulate the honorable member for Wakefield (Mr. Kelly) for introducing into this debate on the customs tariff proposals a good deal of erudition which I have not noticed in past debates on these matters. It is obvious that the honorable member for Wakefield has read some of the Tariff Board’s reports. I should think that that, too, would be uncommon amongst members of this chamber. That he has also applied to the reading of those reports a good deal of erudition and a penetrating mind is obvious from the analysis which he gave of the tariffs.

I suggest that one of the reasons why Tariff Board reports are not read more frequently by honorable members of this chamber, certainly by me, and why we do not have more discussion on them, is that they do not contain enough of the type of information which honorable members of this Parliament require to enable them to make a judgment on the level on which members of Parliament can make a judgment. It is not the responsibility of most of us, at any rate, to make judgments with relation to the detailed technical side of this question, but it is our responsibility, as the honorable member for Wakefield has said, to try to see where protection is taking us and where it fits in with the rest of our economic structure. I submit that we cannot do that on the information contained in the Tariff Board’s reports. They contain all sorts of other information, which I suppose is very useful to somebody, but they do not contain information of the type required by members of Parliament who, after all, have the final say, as this debate indicates. If he would, I should like the Minister to suggest to the Tariff Board that it might give some thought to this particular aspect.

I am not as good at reading Tariff Board reports as is the honorable member for Wakefield, but I do want to say something about the reports of the deputy chairman in connexion with applications for emergency duties. I have read some of those reports because they are much shorter than the annual reports. As honorable members will know, the purpose of the legislation which made it possible for deputy chairmen to make reports in connexion with emergency duties was to prevent excessive damage to industries by imports pending full examination of the industry by the board. The full examinations are required to be extremely detailed and thorough, and rightly so. For that reason, they take some time to complete, and the Government introduced the emergency duty procedure to overcome the difficulty of damage done by imports pending completion of the full examination. I should like to deal with three of these reports which appear - to me at any rate - to depart from the basic principles which should govern tariff protection. The first two come into the same category.

The first is the report of the deputy chairman on pile carpets and the second is the report of the deputy chairman on man-made fibre piece goods of a value for duty of over 5s. per square yard. These two reports have one characteristic in common. The matter was referred to the deputy chairman for inquiry and in each case initially the report was that an emergency duty was not justified. The point they have in common is that in both cases the Minister sent the report back to the deputy chairmen and asked them to have another look at the matters. In the case of pile carpets, the matter was referred to the deputy chairman on. 21st April. On 25th May, he reported that emergency action was not justified. About eighteen days later, on 12th July, the Minister again referred the matter to the deputy chairman asking - I would like the committee to note the words - whether in the present circumstances emergency action was justified. This was the only difference in substance between the original terms of reference to the deputy chairman and the terms of the second reference. On the second occasion, the report of the deputy chairman recommended against emergency action.

With man-made fibre piece goods, it was the other way round. The matter was referred to the deputy chairman on 17th May. On 16th June, he reported quite definitely that no emergency action was justified. On 11th July, the Minister referred the matter back to the deputy chairman, using the phrase I mentioned earlier, and asking whether in the present circumstances an emergency duty was justified. On 11th August, the deputy chairman recommended, using the Minister’s own phrase, that in the present circumstances emergency action was justified and an extra duty of 25 per cent, should be applied.

My purpose this afternoon is to examine the rather ominous words, “ in the present circumstances”. In both instances, as I have said, this was the justification for referring the matter again to the deputy chairman, and in one instance it resulted in a change in the recommendation. What do the words “in the present circumstances” mean? The committee should note from the dates I mentioned previously that only six weeks elapsed in one case and three and a half weeks in the other between the first hearing and the second hearing. These were very short periods and it is unlikely that circumstances in respect of damage caused by imports would have changed. Honorable members will remember that the object in introducing the procedure for a deputy chairman to take a quick look and to recommend emergency action was to meet cases in which an industry was being damaged by imports. Certainly, there is nothing in either report to suggest that these circumstances had changed. I have examined them very carefully and I cannot find one word to show that there had been a change in the import situation in that period. Of course, one would not expect such a change in three and a half weeks or in six weeks.

If the words “ present circumstances “ do not mean the present circumstances in relation to imports, they can only mean the circumstances created by a recession in the industries concerned. This is what worries and alarms me and why I wish to bring this to the attention of the committee this afternoon. It would appear that in this instance .the tariff is being used, not to protect an economic and efficient industry from competition from imports, but to compensate an industry for a decline in internal demand. Surely this is a departure in tariff making. There are all sorts of principles on which the Tariff Board has worked in making its determinations, but to the best of my knowledge it has never attempted to use this principle before. What the Government appears to be doing is pursuing policies, through the Budget and by other means, which are designed to redistribute resources from inefficient and uneconomic industries to efficient and economic industries, on the one hand, and that is a policy with which I agree and which I support in this chamber. On the other hand, it is using the tariff to restore the status quo. I disagree with this policy.

As I said, I thoroughly approve of the Government’s attempt to divert Australia’s scarce resources into industries which can operate as viable units in Australian conditions, but this present policy appears to me to be working against that aim. It seems to me to be the other side of the coin. But my main concern is to point out the effect of such a departure from precedent on the Tariff Board’s system of protection. What the Minister is saying to the board, when he uses the words “ present circumstances “, is that he desires the board to adopt a criterion in. recommending protection which is not a normal criterion and which, if generally applied, would certainly load a huge cost burden on to the Australian economy and particularly on to Australian primary industry.

What I want to know from the Minister is whether I have correctly interpreted the meaning of the words “ the present circum stances “. If I have, can the Minister tell me whether this is to be regarded as a precedent for the board and to become a new criterion in tariff making. Or is it only to be applied in special circumstances so that in effect on these occasions the Government is using the board as an instrument to pursue its policy but outside the normal tariffmaking system? If the latter proposition is correct, the Government should make it clear that this is not normal tariff-making procedure but tha,t the Government is using the Tariff Board as an instrument in pursuing some other policy. It appears to me to be vitally important that this be made clear. I would like some enlightenment from the Minister on these points. Whatever the answer may be, it is worth considering where the adoption of the criterion “ the present circumstances “ takes us.

In the report on man-made fibres, it is shown that Australian production was at its peak in November, 1960, that it dropped from December to March and rose again in June, 1961, until it was 5 per cent, greater than for June, 1960. Which “ present circumstances “ is the deputy chairman supposed to take into account - November, April, June or what date? If the words “ present circumstances “ mean the position in June and duty is applied to suit those circumstances, what happens to the duty in the circumstances of October or December? Is it taken off or is the matter submitted again? What is precisely the procedure? When do. we adopt this magnificent criterion, “ in the present circumstances “, to decide what our tariff policy will be.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– It is only temporary.

Mr FORBES:

– The honorable member says it is only a temporary duty, but how long is it going-

The CHAIRMAN:

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

Mr FORBES:
Barker

.- I thank honorable members who have refrained from seeking the call in order that I may take my second period of fifteen minutes now. The honorable member for Wannon (Mr. Malcolm Fraser) has pointed out, quite rightly, that this is a temporary duty. Nevertheless, we do not know how long it will remain a temporary duty.

Mr Osborne:

– Yes, we do. It can only operate three months after the Government receives the Tariff Board report.

Mr FORBES:

– The Tariff Board has been known to take years before it makes a permanent report. In any case, the Government did not indicate when it introduced legislation on this matter that the measure was designed to depart from normal basic procedures in respect of tariff making.

Mr Chaney:

– How does this affect the primary producers?

Mr FORBES:

– It affects the primary producers quite considerably, because every departure from normal tariff -making procedures imposes an additional cost on primary producers which exists anyway because of the mere existence of the tariff. I said that the general adoption of the criteria of present circumstances would load a huge and unbearable cost burden on the Australian economy. This is the answer to the honorable member for Perth (Mr. Chaney), and I ask him to listen.

Let me explain to the committee, and to the honorable member for Perth, what I mean by reference to the situation as it applies to man-made fibre piece goods. The duty has been increased repeatedly in recent years. Twenty months ago, the duty on the better-class materials was raised to 2s. 8id. a square yard, which equals 100 per cent, duty on many lines. This has increased the price of women’s frocks from 5s. to 17s. a garment. The recent emergency duty will mean that each frock will cost from 18s. to 30s. more than it did twenty months ago.

I make this point because honorable members can imagine what would happen to the Australian cost structure if the general principles employed in this case - the adoption of the criteria of present circumstances - were applied in such a way that you obtained an increase in production over the whole range of Australian industry.

I said there was a third report to which I wished to refer briefly. This is in a different category and it concerns the deputy chairman’s report on nitrogenous fertilizers. In this case, the deputy chairman recommended a duty which has the effect of guaranteeing to Australian producers 100,000 tons of the local market, which is their capacity. In other words, the duty has been designed at a level so that local producers can sell what emerges from their full capacity. Excess requirements can come into Australia duty free under by-law.

When they went before the deputy chairman, the producers claimed that imports of cheap Japanese urea were ruining their market for sulphate of ammonia in Australia. I want to look briefly at the effect of this decision. Although it will not permit lower-priced nitrogenous fertilizers, which would have been possible if the trend to the use of cheap Japanese urea had been permitted to continue, at least in theory it should not have led to increased prices to the user. But what has happened? As soon as the Australian producers got protection which assured them a guaranteed market for the whole of their production, they bunged up the price by £3 a ton. That is the price which is operating, or will shortly operate, to consumers of Australianmade sulphate of ammonia. This is very different from the classic argument that protection is justified because it produces a bigger output, and therefore a cheaper price.

The Tariff Board has power to take account of this action on the part of the producers of sulphate of ammonia when it undertakes its full inquiry. I ask the Minister for Repatriation (Mr. Osborne) to ensure that this is brought to the attention of the board. It uses that section of the act which specifically authorizes it to recommend a reduction or elimination of duties in cases where industries use the tariff for bad pricing policy.

A second result of this decision is that users are being told that they must take their nitrogen in the form of sulphate of ammonia and not urea. Urea is a more concentrated form of nitrogen than is sulphate of ammonia, and there is no doubt in my mind that this decision will have an adverse effect on development in the Northern Territory and the north-west of Western Australia where there is every evidence of the growing use of urea. The effect of this, of course, is that because urea is a more concentrated form of nitrogen, transport costs are cheaper, and over those long distances, it eventually makes a good deal of difference to the cost involved. In my view, this is a classic case where protection should not be afforded at all.

Most of this product is used in primary industries. There is no doubt that we are on the threshold of an era where it is about to be used in increasing quantities as its capacity to increase production is more generally realized. The huge production increases in the United States of America and the United Kingdom owe much to the increased use of nitrogenous fertilizers and they are heavily subsidized in both countries.

What do we do in these circumstances? We award increased protection which puts up the price. Perhaps this could be, justified if a great Australian industry were involved which owed its existence to the manufacture of nitrogenous fertilizers; but this is not the case. Sulphate of ammonia is a by-product of coke production and copper smelting. The companies concerned are the Broken Hill Proprietary Company Limited, the Electrolytic Zinc Company of Australasia Limited and the Australian Gas Light Company. The manufacture of sulphate of ammonia, therefore, is a mere frill on the fringe of their vast activities. It would not make the slightest difference to their overall operations if they went out of the manufacture of sulphate of ammonia to-morrow. And yet, so that these companies can sell their production, we take the risk of jeopardizing an extremely important move towards greater efficiency in primary industry! I think it is in cases like this that many of us support the case for a detailed inquiry into the Australian tariff. It is obvious from this case that there should be more balance in our approach to the tariff. Let the tariff go deep but not spread so widely. In some instances in which a particular product is vital to our primary industries, and in which no great or important Australian industry will be adversely affected, we ought to be able, for the sake of efficient and economic production in our primary industries, to say, “ There will be no tariff protection at all “.

I conclude by supporting the honorable member for Wakefield (Mr. Kelly) in his plea for a detailed inquiry into the Aus tralian tariff, not only in relation to the normal reports of the Tariff Board but also in relation to the recommendations made by the deputy chairmen of the board. I thank you, Sir, for your indulgence.

Mr TURNBULL:
Mallee

.- Mr. Chairman, I appreciate very much what has been said about these tariff proposals so far on both sides of the chamber. 1 believe that these proposals are very much more important than one would think if one judged only by the attention that proposals such as these receive in this chamber. Proposals of this kind are of very great importance with respect to our balance-of-payments problems. They have a great influence in determining whether we shall overcome or aggravate those problems. Therefore, I think that tariff proposals such as these ought to receive very special attention in this place.

Over the years, conditions have changed considerably in Australia. Certain industries, at the time of their establishment, needed high tariffs so that they could become established and soundly based. It has been said truly, very often, that our home market is the best market for our primary products. Tariffs protect industries in Australia that employ many people who buy our primary products on the home market. However, as secondary industry has expanded, greater supplies of raw materials for them have been required from overseas. Therefore, we need to export more in order to provide overseas funds out of which to pay for certain raw materials that we have to import because we cannot produce them here. All these factors, taken together, raise many problems that come within the ambit of the discussion on these tariff proposals.

With respect to protection, primary industry is in a category quite different from that of secondary industry. Certain secondary industries are protected and, generally speaking, almost certainly any secondary industry that is protected cannot export. It is protected so that it can sell on the Australian market in competition with overseas goods. This means that it has no chance of exporting at its local price, because it would be priced out of overseas markets.

Certain primary products that are in very light supply in this country could be produced in sufficient volume, under protection, to supply Australia’s requirements. I refer in particular to olive oil. Near Robinvale, in my electorate, is a very fine olive plantation known as “ Oliveholme “. It is one of the prettiest and most productive plantations that one could wish to see. The owners of this plantation, in conjunction with the Olive Growers Association of Australia, submitted to the Tariff Board proposals for a bounty of 12s. 6d. a gallon on olive oil. The request was refused, and the board recommended a bounty of ls. 6d. a gallon. This was converted to additional tariff duty, making a total tariff duty on imports of olive oil of 3s. 6d. a gallon.

The Tariff Board, in its report on animal and vegetable fats and oils, referred to the position of the Australian olive oil industry and stated -

Present Australian production of olive oil supplies only about S per cent, of what appears to the Board to be current usage of olive oil on the domestic market. The O.G.A. estimated that existing plantings of olive trees would yield sufficient olives in ten years’ time to meet the current total market requirements of olive oil. However, additional crushing facilities would have to be installed. The information available to the Board suggests that existing facilities could crush only about 10 per cent, of annual requirements.

If, in ten years’ time, existing plantings of trees will produce enough olive oil to meet our requirements, surely the industry is worth encouraging. The additional crushing machinery needed could easily be installed in appropriate areas. I was very disappointed when, instead of a reasonable bounty per gallon, a tariff addition of only ls. 6d. a gallon was recommended. This would bring the total protection to only 3s. 6d. a gallon. As only 5 per cent, of our present requirement of olive oil is produced in this country, I can understand that a high tariff would considerably increase the cost of 95 per cent, of the olive oil bought by Australian consumers. The bounty asked for would have had that effect temporarily. It would have encouraged producers and increased the supply of olive oil over the next ten years until the Australian industry was able to supply all of our requirements. The Australian olive oil industry, like other Australian industries, having reached the stage at which it could supply all Australia’s requirement, probably would not be able to export - I speak subject to correction - because the overseas product is produced so much more cheaply than is our own.

Tariff protection on commodities that are used by primary producers increases the costs of production of primary producers and makes it difficult, if not impossible, for us to export the same volume of primary products that we could export if production costs were lower. I have pointed out in this chamber before the irony of the present situation, in which 80 per cent, of our exports are produced by primary industry, only 20 per cent, being produced by secondary industry. Our secondary industries cannot export more because they are priced out of world markets by production costs. Our primary industries are expected to buy on Australia’s high-cost market everything that they require and to sell in lower-priced markets in other countries which have lower standards of living. It is economically impossible to continue to do this, and I may say, in passing, that that is why the Government ended import licensing and applied what has become known as the credit squeeze. It sought to even things up a bit. But much can be done to even things up by means of tariffs.

As 1 look through the list of items, I notice, for instance, that in the category of cultivators, grubbers, weeders, &c, the duty on forks is to be increased by 12± per cent, and duties on other types of cultivators are to be reduced by 2i per cent. Those items should be duty free. If I read these proposals correctly, they will not be duty free. The honorable member for Wakefield (Mr. Kelly) mentioned articles such as axes. The duties on axes and hatchets are to be increased by 12i per cent. But these implements are used to clear the land, and surely they ought to be duty free. I do not intend to go through the list in detail. Implements such as scoops and all earthmoving equipment should be duty free, also. I represent in this Parliament 80 per cent, of the producers of dried vine fruits and I look with dismay at the proposals with respect to pruning knives, grafting knives, hay or straw knives and cane-cutting knives, because duties are to be reduced only in the main and not in every instance. I know that certain industries need protection, but I believe that tools and appliances that are so necessary in primary production should not be increased in price by tariff.

The honorable member for Perth (Mr. Chaney) is expressing his disapproval. If he does not agree with me I cannot help it. I represent a vast primary-producing area. I do not represent the electorate of Perth; I represent north-western Victoria. The people up there are supplying a large proportion of the primary products that Australia exports, and which, therefore, help to maintain our standard of living. I want to make it quite clear that I am referring to articles and tools used in the production of these commodities that represent 80 per cent, of our exports. If we increase the prices of those articles the primary producer will be placed at a disadvantage compared with those engaged in secondary industry.

Governments of this country have given secondary industry too much protection at the expense of primary industry. This Government, during the last twelve months or so, has taken a step in the right direction, and the only fault I find is that the step was not taken earlier. Of course, one cannot hope to sell without ever buying in return. Consequently, there are many items that we must import. If we sell our goods to other countries we must buy goods from those countries. I believe in reciprocal trade. I have always supported the policy of preference to Commonwealth countries, Which seems to be in some danger at the present time.

These tariff proposals are of very great importance, and I would like to repeat what I said in my opening remarks, that I think they are far more important than one might be led to believe from the interest taken in them by honorable members of this Parliament.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I shall not detain the committee for more than a few minutes. I merely wish to refer to a matter that was mentioned by the honorable member for Barker (Mr. Forbes). I believe the honorable member has done the rural community of Australia a real service in directing attention to the temporary duty that has been placed on nitrogenous fertilizers. However, there are one or two aspects of this matter that the honorable member did not touch upon. As

I understand it, under by-law 10,000 tons of urea, a cheap imported nitrogenous fertilizer, will be allowed in duty-free - slightly more than came in last year before there was an emergency duty - and on any further quantities imported there will be a duty of 25s. a cwt., based on the nitrogenous content of the urea as it arrives in Australia.

It is most important to consider the uses to which imported urea is put. There are three main uses. First, it is used as a fertilizer. In this field it competes with sulphate of ammonia, particularly in the sugarproducing areas of Queensland. Secondly - and this is the use to which I want to devote particular attention - it is used as a stock feed supplement. When used in this way it is sprayed with molasses on to dry, useless pasture. It then builds up the protein content, so that stock are able to do pretty well on those pastures. Thirdly, it is used in certain kinds of plastics manufactures.

Because it is easy to identify the urea used in plastics manufactures, the manufacturers who use it will not be paying any duty on the imported urea that they use. However, because it is said that it is not administratively possible to distinguish the urea used as fertilizer from that used as a stock feed supplement, the people who use it for stock feed supplement will have to pay the duty. I consider it is most necessary for the Tariff Board, when making its final report, to suggest some procedure to be adopted so that people who wish to use urea as a stock feed supplement, in one form or another, will not have to pay duty. The use of urea for this purpose is in its infancy in Australia, and there is a very real possibility that it can be intensively used in the northern parts of Australia, and even in some southern areas. Some experiments have been conducted in Victoria, under the supervision of the University of Melbourne Department of Agriculture, and they have shown that in certain circumstances urea can be used as a stock feed supplement in Victoria economically and beneficially. It will not be possible, however, to use it economically if this duty has to be paid.

I think the Tariff Board should be very careful to retain a proper sense of values when it makes its final report. I do not want to make too harsh a judgment on the basis of the temporary report that is now before us, but I suggest that the interests of the manufacturers of sulphate of ammonia in this country must not be given too much weight compared with the interests of farmers who wish to use urea as a stock feed supplement. I appreciate the reasons that motivated the board in bringing forward this temporary report. I realize that the board considered it necessary to hold the position until it had a chance to examine the whole situation. I merely ask the Minister for Repatriation (Mr. Osborne), who handles tariff matters in this Chamber, to ensure that the Tariff Board is made fully aware of this use of urea, so that it may give the matter full and balanced consideration.

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– This has been a very interesting debate. It is the first occasion for a very long time on which the basis of a Tariff Board report has been examined at all in this Parliament. I want to make it quite clear that, with very few exceptions, the matters discussed, concern the implementation of a protective tariff policy not the protective tariff policy itself. There is no argument in this committee about the validity of protection at this stage. The only discussion has been on the implementation of the policy. T take this opportunity to affirm again the Government’s belief in the need for a scientifically devised system of protection and support for Australian industry, not only for secondary industry but for primary industry as well.

I do not want to detain the committee for long, and I shall try to answer some of the questions that have been raised as briefly as I can. Just in passing I would like to point out an interesting phenomenon that has been apparent in this debate. All the interest has been shown on the Government side of the committee. The honorable member for Lalor (Mr. Pollard) spoke somewhat discursively on the various tariff measures before us, but the only real interest in this policy and the machinery for implementing it was displayed by honorable members on this side of the Parliament.

Mr Ward:

– You think so, do you?

Mr OSBORNE:

– Well, the facts speak for themselves. [Quorum formed.] The honorable member for Lalor, as I understood him, objected to the fact that the Tariff Board, accepted some applications for increases of duty but rejected others or preserved the status quo. He suggested that the trend in Tariff Board reports was against increases in duty and against the applications for new duties. That is not borne out by the facts.

Other honorable members taking part in this debate have objected to rates of duty that were too high and the increased cost of tariff protection in this country. I think it is clear from the general tenor of the debate that the consensus of opinion of this committee is that the Tariff Board has steered a middle course.

The honorable member for Lalor also objected to the Tariff Board’s refusal to recommend a higher rate of duty on cellulose acetate flake. I point out to the honorable member that cellulose acetate flake is used to make yarns, which themselves are used to make piece goods, which in turn are used to make apparel, and that if we raised the duty on the flake we would have to raise the duty on yarn, piece goods and apparel in order to continue the process all the way through. I believe that the Tariff Board’s recommendation was made on the basis that it is better to subsidize the basic material than to raise the prices of the subsequent manufactures all through the whole range of activity. Also, on behalf of the Opposition, he had some observations to make about pig meats and meat extracts. The point about imported pig meats is that they were reckoned to be receiving the advantage of export subsidies in the country of origin. That advantage has been countered by additional duties under the anti-dumping legislation, not under the tariff. Concerning meat extracts, on the other hand, the Tariff Board found that the Australian producer had an advantage, and did not in fact need protection because of his favorable local cost of production and the competitive standard of his product.

Mr Pollard:

– There is a case for prohibition of imports.

Mr OSBORNE:

– The board did not find so. The board found, in effect, that the Australian manufacturer of meat extracts is so situated that his manufacturing process is so efficient and his product can be produced at such competitive prices he does not need protection. In those circumstances he certainly does not need protection by way of prohibition.

I shall deal with some specific questions which I have been asked by honorable members. The honorable member for Wakefield (Mr. Kelly) asked me to explain why, although the Tariff Board had recommended a duty of 2s. a gallon on olive oil plus a bounty of ls. 6d. a gallon, the Government did not accept the recommendation for bounty but preferred to protect the industry by way of duty alone. I can only point out to the honorable gentleman that there are problems of administration in these matters, and that in some industries, the basis of which is very widely spread, administrative difficulties make it preferable to give support by way of duty than by way of bounty.

In the course of his speech the honorable member for Barker (Mr. Forbes) drew attention to two cases in which matters were referred a second time to a deputy chairman under the emergency duty procedure. He directed attention to the use of the words “ in the present circumstances “ in the Minister’s query as to whether action was justified, and if I understood him correctly seemed to see something sinister in their use. I remind him that we are dealing with an emergency procedure only under this new system of reference to a deputy chairman. We have set up this procedure to provide for an emergency inquiry in cases in which an urgent need may exist for protection of an industry. I remind him also that the protective duty, if any, which is recommended by the deputy chairman, can operate for only three months after the Government receives the formal report of the full board on the industry, which must follow the emergency reference to the deputy chairman. So the application of an emergency duty of this sort is a holding procedure only. In case the honorable member requires a more precise explanation of why matters were referred again to a deputy chairman I shall quote to him a press statement issued by the Minister for Trade (Mr. McEwen) on 11th July concerning man-made fibre piece goods. The statement reads -

Explaining the decision to call for a further report Mr. McEwen said that the Government was in some doubt as to whether the report fully covered the question which the Government had wished the deputy chairman to examine.

I think it is inevitable that in an emergency procedure of this sort, where time is of the essence and does not permit the meticulous and detailed preparation of cases, it sometimes must occur that the particular circumstances which were sought to be examined are not fully examined, and that a second reference is justified.

I should like to turn again for a few minutes to the speech made by the honorable member for Wakefield, in which he referred particularly to the minority reports which have accompanied three Tariff Board reports in recent times. There is no novelty in a member of the Tariff Board making a minority report. Indeed, the honorable member’s father was a distinguished member of the Tariff Board for some eleven yeans and he made a minority report on occasions. Problems concerned with tariffs are so involved that it is not at all surprising that a body of men such as constitute the Tariff Board do not always reach unanimity. The honorable member for Wakefield went on to express disappointment that in one case in particular the Government had not adopted the minority report. I want to assure him that the minority reports are just as carefully studied by the Government as are the majority reports. The Tariff Board is an advisory body, and it is the Government’s responsibility to consider the advice given by the board and to act on it, either accepting it in whole or in part or rejecting it. In the nature of things, the board being appointed for the purpose of advising governments on the needs of industry, in order to enable them to implement a protective tariff policy, and the members of the board being highly qualified people, chosen very carefully for their experience and ability, one would not expect occasions to arise very often when the board’s advice is rejected. Much the same considerations apply to a minority report, because we start with the fact that the member of the board who makes the minority report has himself been unable to convince the majority of his colleagues of the validity of his views.

I think that honorable members, particu larly the honorable members for Wakefield and Barker, have made very thoughtful contributions to this debate, and I am sure that the Tariff Board will be interested in the views that have been expressed in this committee, , as is the Government.

Questions resolved in the affirmative.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Ordered -

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

page 1920

CUSTOMS TARIFF BILL (No. 2) 1961

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

page 1920

CUSTOMS TARIFF (CANADA PREFERENCE) BILL (No. 2) 1961

Bill presented by Mr. Osborne, and read a first and second time and reported from committee without amendment or debate; report adopted.

Third Reading

Motion by Mr. Osborne proposed -

That the bill be now read a third time.

Mr CHANEY:
Perth

.- The only remark I want to make is that no honorable member has received copies of these bills, due to the speed with which they are being shot through.

Question resolved in the affirmative.

Bill read a third time.

page 1920

CUSTOMS TARIFF (FEDERATION OF RHODESIA AND NY AS ALAND PREFERENCE) BILL 1961

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

Second Reading

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– I move -

That the bill be now read a second time.

I take the advantage of this opportunity to point out to the honorable member for

Perth (Mr. Chaney) that these bills merely embody in the schedules to the appropriate tariff legislation the matters contained in the proposals which we debated in full and adopted in the Committee of Ways and Means this afternoon. From my careful research during the past eighteen months I believe that ‘the procedures which the House is now following are the minimum which can be used to embody the tariff changes in the respective acts.

Question resolved in the affirmative.

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

page 1920

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BELL (No. 2) 1961

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

page 1920

EXCISE TARIFF BILL (No. 2) 1961

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

page 1920

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL (No. 3) 1961

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

That leave be given to bring in a bill for an act to amend the Customs Tariff (New Zealand Preference) 1933-1960, as amended by the Customs Tariff (New Zealand Preference) (No. 1) 1961 and by the Customs Tariff (New Zealand Preference) (No. 2) 1961.

Bill presented, and read a first time.

Second Reading

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to insert in the Customs Tariff (New Zealand Preference) 1933-1961 a new provision indicating the time at which a duty expressed to be a temporary duty will cease to operate. The time, as honorable members will see, is three months after the date on which my colleague, the Minister for Trade (Mr. McEwen), receives the final report of the Tariff Board on the goods. This action is necessary in view of the amendment proposed by Customs Tariff (New Zealand Preference) (No. 2) Bill 1961 which provides for temporary duties on woollen piece-goods. A similar provision was enacted in the main customs tariff in August last year. I commend the bill to honorable members.

Question resolved in the affirmative.

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

Bill - by - leave - read a third time.

page 1921

CELLULOSE ACETATE FLAKE BOUNTY BILL (No. 2) 1961

Second Reading

Debate resumed from 14th September (vide page 1227), on motion by Mr. Osborne -

That the bill be now read a second time.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– We have carefuly considered this bill and offer no opposition to it.

Question resolved in the affirmative.

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

Sitting suspended from 5.46 to 8 p.m.

page 1921

ESTIMATES 1961-62

In Committee of Supply: Consideration resumed from 10th October (vide page 1877).

Department of the Treasury.

Proposed Vote, £98,685,000

Refunds of Revenue

Proposed Vote, £30,800,000

Advance to the Treasurer.

Proposed Vote, £16,000,000

Mr CREAN:
Melbourne Ports

.- I should like to address myself to the estimates for the Department of the Treasury. As has been indicated, the total amount involved is £98,685,000, but the major part of that sum is taken up by the single item, “ Loan Consolidation and Investment Reserve, £83,279,000”. I think that in the next few years the government of the day, whoever may form it, will have to face up to certain changes in the role of the Treasury in our economy. I should like to draw the attention of the committee to a document published recently by Her Majesty’s Government in Great Britain entitled, “The Control of Public Expenditure “, and known familiarly as the Plowden report. It is a report made to Her Majesty’s Government in Great Britain, a conservative government, as we all know. In 1958, the Select Committee on Estimates had suggested to it that a small independent committee, which should have access to Cabinet papers, be appointed to report upon the theory and practice of Treasury control of expenditure. As we all know, under our parliamentary system, Treasury control of expenditure and parliamentary control of expenditure are significant to our scheme of government. The British Government, acting on that principle, appointed a committee under the chairmanship of Mr. Plowden.

The committee sat for a considerable period of time and, on 9th June, 1961, presented its report under the title, “ The Control of Public Expenditure “. In paragraph 10 on page 6 of that document, the committee directs attention to the role which the government now occupies in the economy as a whole. Largely, what is true of Great Britain is also proportionately true of Australia. That paragraph reads -

In our judgment, the social, political and economic changes of the last twenty years have created a new situation. First, the scale of public expenditure is far greater.

It goes on to say that in Great Britain the Government is responsible for spending about 22 per cent, of the gross national product. That is largely the situation in Australia, for under our system, almost one-quarter of our gross national product of £7,000,000,000 is expended on public activity of one kind or another by our Commonwealth and State governments. The committee goes on to say -

As a consequence of these changes the public sector of the economy as a whole now employs about one-quarter of the total labour force.

The second point which the committee notes is -

Public expenditure has become more complex, including as it does, the cost of the most advanced technological projects and of scientific research; the financing of commercial risks that the private sector cannot take; aid of many different kinds to a variety of under-developed countries; and social insurance schemes of unprecedented scope.

Thirdly, the committee points to this fact -

There has taken place a great change in economic thought; the Keynesian revolution in the role of public finance and its relationship to the national economy as a whole.

It goes on to suggest certain changes in the presentation of the type of parliamentary documents which we are considering. In paragraph 12, the report states -

We would favour a reconstruction based on four elements: -

Regular surveys should be made of public expenditure as a whole, over a period of years ahead, and in relation to prospective resources; decisions involving substantial future expenditure should be taken in the light of these surveys.

Last night, there was presented to this Parliament a bill relating to joint expenditure by the Commonwealth and State governments on a railway project in Western Australia. That bill envisages an aggregate expenditure of some £40,000,000, the prime impulse for which is the development over the next several years of a great steel industry in Western Australia. This points to the kind of problem that faces the Australian nation in the years ahead. I suggest that what should be faced critically by this Parliament is the fact that while apparently this steel project is looked upon as being of some urgency to Australia, the total project will not come to fruition until 1968 - seven years from now. A day or two ago, when discussing the estimates for the Department of Defence, we discussed the expenditure over five years of £40,000,000 on foreign ships to be used by the Navy in our defence scheme, of which only £700,000 is to be spent this year. This in itself points to the fact that, in view of the significant role which the Government occupies in the economy as a whole - something like onequarter of the total economic productivity in any one year is spent by the government

Mr Harold Holt:

– By all governments.

Mr CREAN:

– I am using the word “ government “ in the collective sense. I accept the rebuke. It is spent by all governments. But it does not stop there. Onequarter of the gross national product is expended by all governments, so that, in the aggregate, governments are the most significant source of expenditure in Australia, and what governments do or do not do has relation to the expenditure of the other three-quarters of the gross national product. What the Plowden report suggests is that we can no longer consider government expenditure in terms of a document such as the Estimates now before us, which relate only to expenditure for the one year. That committee suggests that there must be overall planning by the government of expenditure in the public sphere. Another suggestion that is finding currency in British thought at the moment is that an endeavour must be made to set out some long-range plan for private industry. Here I refer the committee to a publication of an organization known as Political and Economic Planning entitled “ Economic Planning in France “, copies of which may be seen in the Library. It is one of the organization’s most recent documents, document No. 454, and was published on 14th August, 1961. It is a record of a conference held in London examining the experience of economic planning in France. The last paragraph of the document reads -

Professor de Wolff-

He was one of those taking part in this symposium - concluded his remarks by saying that the type of planning adopted in any particular country was a political choice; and that, historically, “ planning had usually been introduced as a response to challenge “.

We had a challenge issued here a month or two ago when we debated the effects on Australia’s economy of Great Britain’s entry into the Common Market. Whatever may ultimately result from the Common Market, at least it has made the Australian economy realize what may happen in the next few years. It was a challenge. The document continues -

Planning in France had been adopted as a response to the post-war situation. Many of the institutions peculiar to the Netherlands-

The Netherlands formed part of the examination - e.g. those relating to wage policy, took shape just after the war. In Belgium-

That is another country that has had to plan - a planning board - called, however, not the “ planning “ but the “ programming bureau “-had been set up in response to the difficulties of the Belgium economy during recent years, now aggravated by the Congo crisis.

It then goes on - and these are the significant words -

The slow pace of economic development in Britain might also prove to be the kind of challenge which led to a greater interest in economic planning.

I suggest that this is the kind of challenge that faces the Australian economy at the end of 1961 and the beginning of the term of office of a new government in Australia in 1962. I suggest also that whatever government occupies the treasury bench in the course of the next few years must face up to fundamental changes in our parliamentary approach, in the relationship of private activity to public activity, and in relation to overall economic planning in the Australian economy. As I have stated on previous occasions, it is not so many years since “ planning “ was regarded as a dirty word. Planning now is recognized as one of the fundamental conditions of survival in Europe and I should think that, belatedly or not, it must be so accepted in Australia. We are a people, small in number, occupying a large area, but surrounded by millions of people. One of the ironies that became apparent in the debate on the European Common Market was that Australia seemed to be worried about losing markets which catered for some 200,000,000 people whilst at our doorstep we have nearly 2,000,000,000 people. That is the challenge to Australia.

Mr Harold Holt:

– They have not the same purchasing power as the Europeans have.

Mr CREAN:

– That is the problem and that is the challenge. They are human beings with the same right to survival as you and I have, with the same right to a place in the sun and the same right to decent living standards. That is the challenge to us. How can we help them to reach the stage at which they can become positive purchasers rather than merely poverty-stricken multitudes? That is part of the battle that is sometimes rather abstractly referred to here as the battle for freedom. What is freedom, when all is said and done? It is a very relative term.

The challenge is here and we must meet the challenge and respond sensibly. We should be willing to hold the kind of examination that the conservative government held in Great Britain. We should set up a committee at least to look at the public role, and after all that is all that Parliament can do directly. Private enterprise must be pushed along or must accept the challenge in its own way. Whether the Government likes the term “ socialist ‘ or not, it must recognize that government is the biggest single factor in business or in any other activity in Australia to-day. Of every £4 that is expended in Australia directly, the Government expends £1.

The CHAIRMAN (Mr Lucock:

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

Mr BLAND:
Warringah

.- I do not want to quarrel with the remarks of the honorable member for Melbourne Ports (Mr. Crean). I always listen with great interest to what he has to say. To-night he told us something of the principles of public finance and the controls exercised in Great Britain and elsewhere in the management of public finance. I am more interested in the machinery for controlling public finance and it is to this subject that I wish to direct my remarks.

First, I want to pay a compliment to the Treasurer (Mr. Harold Holt) and to his staff for presenting the Budget as early as they did in this financial year. When the Public Accounts Committee has investigated these matters, it has found that the government departments are most anxious to have the Budget presented early in the financial year. This gives them a greater opportunity to disburse the moneys granted to them by the Parliament. But this early presentation of the Budget presents problems and coordination of the activities of the departments and of the Treasury is necessary. However much we may praise the Treasurer for what he has done, I think we must regret that little advantage has been taken of the early presentation of the Budget. Now, almost four months after the beginning of the financial year, the Estimates have not yet been passed by the committee. This means that the departments have been unable to organize their expenditure in the most satisfactory way. If their financial provision is not approved until four months of the financial year have gone, they must cram into the eight months that remain expenditure of the money that is granted to them for a full twelve months.. It is obvious that there must be inefficiency in this kind of activity.

I want to address my remarks now to the Treasurer’s Advance Account. In this account, we are appropriating £16,000,000 for contingencies. In other days, we said loosely that the Treasurer’s Advance Account was used’ to provide for unforeseen contingencies.. A famine in one part of the world or a flood in Australia demanded some relief to be granted by the Government and this relief was granted by using the Treasurer’s Advance Account. However, the use of the Treasurer’s Advance Account has been extended. Honorable members will see under Division No. 209 that the purpose of the Advance to the Treasurer is said to be -

To enable the Treasurer to make advances which will be recovered within the financial year; and to make moneys available to meet expenditure, particulars of which will afterwards be submitted to Parliament, or, pending the issue of a warrant of the Governor-General specifically applicable to the expenditure.

That is a much wider purpose than the purpose for which we believed in other days theTreasurer’s Advance- Account was established. Since the’ Public Accounts Committee has inquired into the system, the whole method of handling this account has been changed. The Treasurer used to believe that the expression “ particulars of which will afterwards be submitted to Parliament” required an appropriation for each of the items as it was debited against the various accounts of expenditure during the year. This meant that we had an appropriation by Parliament of £16,000,000 and then an appropriation by Parliament of all the separate items that went to make up the £16,000,000. The committee took the advice, of the Commonwealth law officers. They suggested that this practice of making a second appropriation was not necessary at all. The money had been appropriated, in the first place in the £16,000,000, and all these separate items of expenditure under the separate heads were, therefore, already included in the £16,000,000. You did not achieve any new benefit or advantage by having another appropriation. Therefore, the. Public Accounts Committee in its wisdom recommended to the Treasurer - and the Treasurer has found it in his heart to agree- that it is not necessary to have this appropriation at all. It would be sufficient for the Parliament to have a statement of accounts presented to it by the Treasurer so that the. Parliament would know what the actual items were upon which the expenditure: had been made.. I think that is an entirely satisfactory method.

There is an item, on the business paper which requires the acceptance or receipt by the Parliament of the statement of accounts which has been presented covering the various items of expenditure in the Treasurer’s Advance. I want to conclude by saying that this is, another illustration of the advantage the Parliament has derived from having, a Public Accounts Committee which has been able to show savings in the way in which things, can be done and has provided a more useful way of handling a. series, of items, which are included in the. Treasurer’s Advance of £16.00.0^000.

Mr PETERS:
Scullin

.- Should this country, through its Treasury, determine in any way the amount of capital that should flow into Australia from overseas, or should the Government in any way determine the use to which foreign capital is put in this country? 1 consider that those are two very important questions. They are questions, that this Government should answer immediately. They are questions that countries in other parts of the world have failed to answer with disastrous results to themselves.

The position in connexion with the inflow of capital into Australia in recent years has been this: In 1947, there was invested in. Australia less than £200,000,000 of foreign capital. In 1959, foreign capital invested in Australia totalled £950,000,000. At. the end of 1960, capital from overseas invested in Australia totalled £1,100,000,000. The investment of overseas capital in. Australia to-day totals £1,400,000,000. The growth of investments from, overseas in, the past three financial years is shown in the following figures: -

That represents an increase in the inflow of foreign capital into Australia of more than 50 per cent, during the last three years. I have endeavoured to find out from the Treasurer (Mr. Harold Holt) and the Prime Minister (Mr. Menzies) in two questions that 1 asked what they estimated the flow of foreign capital into Australia would be during the next few years. The Treasurer said it was most desirable that foreign capita] should flow into Australia, but he did not tell me to what extent it was desirable. He gave me the impression that he did not want any diminution of the amount that was flowing into Australia; so I asked the Prime Minister at what rate he considered it should flow into this country. He said that, of course, members of the Opposition did not believe in foreign capital coming into Australia; but the Government did. “ We welcome it,” the right honorable gentleman said. “We consider it should come into the country in great amounts and that it will do so in succeeding years.”

If foreign capital flows into Australia at the increased rate at which it has been coming in during the past three years, and if that rate is maintained for the next five years, the investment in Australia at the end of that period will’ be more than £5,000,000,000 of foreign capital. The dividends payable upon foreign capital invested in Australia at 30th June, 1960, totalled £114,000,000 per annum. That was on private and overseas foreign investments. Upon the total of £1,472,000,000 that is invested to-day, the annual payment overseas in dividends would be £147,000,000.

Mr Harold Holt:

– Most of it is ploughed back inside Australia.

Mr PETERS:

– The Treasurer says that the money is ploughed back in some way. If the increase, as. I estimate, continues, at the rate of 50 per cent, per annum, and we have £5,000,000,000 of foreign capital invested at the end of the next five years, then the amount payable in dividends will be £500,000,000 per annum. The Treasurer smiles. He says, in effect, “ Of course, it will not be paid. The dividends will not be paid overseas.” No, they certainly will not be paid’ overseas, but for every £1 of interest that is not paid over seas, another increase in the investment of foreign capital takes place in Australia. So ultimately, because we cannot pay the dividends overseas as the dividends are ploughed back, a vast amount more of foreign capital becomes invested in Australia upon which dividends cannot be paid overseas.

What happens then? Then we have what has happened in- other countries such as Cuba, the Middle East and Indonesia. They are unable to give to their people the conditions they promised them and at the same time meet the demands of overseas bond-holders. That position has not developed and would not develop in Australia. This is what would take place: In order to pay overseas bond-holders, the standard of conditions of the people would have to be reduced. In reality, the trouble that faces Australia also faces other countries. It also faces Canada as is shown by an article- in a volume that is not a Labour publication, the “ Review “ of the Institute of Public Affairs of Victoria. The writer states -

  1. . a . . . cause of disturbance in Canada at the moment fs the growing ownership and. control of their industries and resources by American capital. This was certainly uppermost in the minds of the Canadians with whom I talked.

About 60 per cent, of Canada’s manufacturing industry is now owned by foreign capital, mainly American. In addition, American capital controls some of the major primary resources of Canada. Moreover, something like 50-60 per cent, of Canada’s exports go to the United States. All this makes Canadians wonder whether the big decisions affecting their economy are now being made in Ottawa, Toronto and: Montreal or at Washington, New York and Chicago!

Of course, the big decisions in the economic affairs of any country are made at the points from, which the capital- and the industries of the country concerned are controlled. That fact is self-evident, Mr. Chairman. The writer of this article further states -

As in Australia, United States’ companies have shown no disposition to make provision for Canadian participation in the ownership of the enterprises which they have initiated. Moreover, American enterprises do- not have to publish accounts of the sales and earnings of their Canadian operations. Canadians feel that many of the most vital activities in management and research areretained by parent American companies and that Canadians are. consequently denied the opportunities which should go. along with the industrial development of their country.

They believe that, politically as well as economically, their ability to determine their own destiny is being destroyed by the economic control over Canada now possessed by other countries.

I have stated the position in Canada. I now turn to Japan. Vast sums of money were flowing into that country from the United States of America and elsewhere to the detriment, the Japanese thought, of the industries of Japan and the welfare of the Japanese people. So the Japanese restricted the kinds of capital permitted to enter the country and determined the method of investment of foreign capital so that it would not militate against the welfare of the nation but would promote development and thereby the welfare of the Japanese people. Similar action is not being taken with respect to the inflow of capital into this country.

I have pointed out previously that if the inflow of foreign capital continues to increase in the next five years as it has done over the last few years we shall have a total of more than £5,000,000,000 worth of foreign capital invested here. On that investment we shall have to pay to overseas investors dividends of approximately £500,000,000 annually out of the earnings of our exports. We could not possibly pay so much in dividends to foreign investors and, at the same time, pay for the imported goods that are essential to the expansion of our secondary industries or even to the maintenance of the existing secondary industries. So, inevitably, there will be a slowing-up of the economy, not as a result of government action, but because of the flow of overseas capital to Australia in search of profitable investments.

I read in the press recently that overseas investments in this country would not increase in the manner that I visualize, but would slow down. An economist named Shrapnel, who is employed’ by a firm of capitalists in Australia and who is given to making statements on this matter, was reported in the newspapers recently as saying that approximately £200,000,000 per annum of foreign capital would come into Australia during the next few years. If the inflow continues even at that reduced rate, at the end of the next five years there will be a total of nearly £3,000,000,000 of over seas capital invested in Australia. Even with that total of foreign investment, we would find it difficult to pay dividends to the foreign investors.

If these commitments were not met, as the Treasurer so sapiently interjected, the dividends would be ploughed back into industries in this country. In other words, bit by bit, the industries and resources of Australia would be sold to overseas capitalists and the freedom and the right of the people of this country to control their own affairs and to democratic government would be lost to us. Those birthrights would be whittled away bit by bit as a result of the present Government’s conduct of our international financial affairs and our overseas trade.

Mr FOX:
Henty

.-Mr. Chairman, I wish to deal very briefly with what I consider to be an anomaly in the operation of the Defence Forces Retirement Benefits Act. The amendment to the act made in 1960 provided for the payment of special benefits to those members of the services whose engagement was terminated by a change of government policy - those who were retrenched before their period of enlistment had expired. These benefits do not extend to those members of the forces whose period of enlistment ended during what is decribed in the 1960 measures as the prescribed period. I refer to those members of the services who were eligible for re-enlistment and who were willing to re-enlist but were told that their applications would be rejected, not for medical or service reasons, but purely because a change of government policy had reduced establishments, and, therefore, the services of these members of the forces were no longer necessary. To all intents and purposes, these two groups of persons are in the same category, but the act does not treat them as being in the same category. One group receives special benefits; the other does not.

I understand that the Allison committee was appointed to inquire into this kind of anomaly, among other things. But, as the findings of the committee were never published, no one knows just what they were. There is a strong body of ex-service personnel who believe that the Government should establish another committee similar to that appointed to inquire into taxation anomalies, the report of which has recently been published, in order to examine the provisions of the Defence Forces Retirement Benefits Act and to report on the apparent anomalies in it.

Mr Chaney:

– We would not see that report, either.

Mr FOX:

– I understand that the Allison committee was appointed by the Cabinet. What is required in this instance is a committee which will make its findings public.

I also wish to direct attention to another aspect of the operation of the Defence Forces Retirement Benefits Act which is causing some concern. In a number of instances, there is a considerable lapse of time between the date of a serviceman’s retirement and the date on which he receives his first payment of pension. I have been told that this lag varies from six weeks to six months. In many instances, it causes embarrassment, because many persons have not sufficient money to enable them to carry on until the first pension payment is received.

Prior to the last amendment of the act, most servicemen received payment in lieu of furlough, but the last amendment considerably altered the circumstances of a number of persons. A member of the forces whose service began a comparatively short time before he would reach retiring age, and who wished to contribute for the maximum pension to which he would be entitled, would have to pay contributions which were so high as to leave him with little money to put aside to meet his commitments between the time of his retirement and the time when he receives the first pension payment. Most men who retire from the services find employment difficult to get, because, unfortunately, it is never easy for a person over 50 years of age to obtain a job. As a consequence, retired servicemen are seriously embarrassed by the delaying of the first pension payment for up to six months. I ask the Government to examine the possibility of having payment of some portion of the pension entitlement, perhaps 50 per cent, of it, commence within two or three weeks of discharge, with the balance of the entitlement to be adjusted within a reasonable time.

Mr WARD:
East Sydney

.- 1 take this opportunity to return to a subject about which I have previously spoken in this House, but about which I have not yet received a satisfactory explanation. I have raised the matter in the presence of the Minister for Works (Mr. Freeth), who finally washed his hands of the whole affair, saying that it was not his responsibility. As it concerns the letting of a contract for the building of the new headquarters of the Reserve Bank of Australia in Sydney, I think I am justified in assuming that the Treasurer (Mr. Harold Holt) must be the man who can supply the explanation.

This is an extraordinary story. For some reason or other a cloak of secrecy has been thrown over the whole matter. We could not get the Minister for Works to give us any information. The most he would say was that the decision on the letting of the contract had been made by the bank, on the advice of its own experts, and that it had nothing at all to do with the Government. I thereupon approached the Governor of the Reserve Bank, who was unable to explain why the two lowest tenders had been passed over. The Leader of the Opposition (Mr. Calwell) asked the Prime Minister (Mr. Menzies) a question about the matter a week or so ago. The Prime Minister promised us a statement, but when he was further questioned in the House to-day he answered evasively. He pretended that he had forgotten all about it. He said that he thought the matter had since been discussed in this chamber, but he has now assured us that he will have another look at it.

Let us consider the extraordinary circumstances associated with the letting of this contract. First, let me remind honorable members that a few years ago a royal commission was appointed to inquire into the letting of a contract for the extension of the General Post Office in Sydney in circumstances that did not appear to me as fishy as the circumstances surrounding the letting of this contract for the Reserve Bank building. If the Treasurer cannot supply the necessary answers to the questions I have been asking, I do not know to whom we can go for satisfaction. 1 do not suggest that the Governor of the

Reserve Bank is the person responsible for what has happened on this occasion, because he probably received his riding instructions, but the fact is that he is now in red China, having gone to that country in rather a mysterious manner. In fact, we knew nothing about his visit to red China or the reason for it until we heard the announcement of his arrival in Peking. I will venture an opinion that the Governor of the bank will not be back in Australia before the Parliament rises to prepare for the general election, and of course the Treasurer will be able to say to us, “ I will have to await the return of the Governor of the bank in order to consult him on the matter “.

Let me relate a few of the relevant circumstances. In May last announcements appeared in the press on two occasions that the Reserve Bank proposed to invite tenders for the construction of its new building in Martin-place, Sydney. The contract is a major one, involving a job costing about £4,500,000. Interested building contractors were invited to register with the Reserve Bank, and fourteen of them did so register. There may have been more than fourteen, but that is the number finally accepted as being suitable firms, from which tenders might be invited. For six or seven weeks the affairs of these contractors were thoroughly investigated. Each of them had to supply balance-sheets covering its operations for three previous years. The firms had to give authority for their private bankers to submit reports about their affairs, and they had to agree, if successful in having a tender accepted, to put up a performance bond of £250,000 to ensure completion of the work to the satisfaction of the Reserve Bank.

After this investigation had been conducted, the fourteen firms were invited by letter dated 24th June to submit tenders, and the fourteen of them did so. This was after they had been thoroughly investigated and had evidently passed all the tests conducted both by the Reserve Bank and by the Commonwealth Department of Works, which, according to the Minister, was acting as architect to assist the Reserve Bank in the matter.

The last day for submission of tenders was 4th August. Six days later four of the five lowest tenderers were told that they had been unsuccessful, but no reasons were given for the rejection of their tenders. I might also mention that those six days covered a Bank Holiday week-end, so that it was only three working days after the final day for submission of tenders that these firms were given this information.

Then we had to wait about a month before we were told who the successful tenderer was. Honorable members will recall, however, that before the Reserve Bank had released the name of the successful tenderer, I announced in this House who that tenderer was to be. It was common knowledge in Sydney which firm was to get the contract. These fourteen reputable building firms, any one of which would have been competent to undertake this great work, had been involved in unnecessary expense in the preparation of their tenders, to the extent of between £2,000 and £3,000 each. Thirteen of them had undertaken this expenditure without any possible chance of having their tenders accepted.

Why can these firms, who were the two lowest tenderers, not be told why their tenders were rejected? There was a difference of about £40,000 between the lowest tender and that which was accepted. To some people that may not appear to be a large amount of money, but what we must remember is that it is public money. The Minister for Works said it was the bank’s own money. Where does the bank get its funds from? It is the Commonwealth Reserve Bank, and it is the people’s money that the bank is dealing with; therefore, the people are entitled to know why the lowest tender was not accepted. It is not a case of the two lowest tenderers wishing to have the information suppressed. The fact is that these firms have been pressing to have the reasons made known. They want to be told, and I think they are entitled to be told, why their tenders were rejected.

When I first raised the matter in this House, on 29th August, the Minister agreed with me that if the lowest tender was not accepted a substantial reason for its rejection should be given and he undertook to have a full investigation of the matter, and to make a statement to the Parliament after that full investigation was completed. Two nights later, on 31st August, the Minister came into the chamber and read a statement. He did not make a statement of his own; what he did was to read a prepared statement, one that had been prepared, no doubt, by officials of the Reserve Bank. He gave us no other information, beyond saying that the decision was the bank’s own decision and that it had been based on the advice of its experts.

Who are the experts who would advise the bank on such a matter? One expert would be the architect, and the architect was the Commonwealth Department of Works. Has the Minister not found out what advice the Department of Works tendered to the bank, and why it was decided to reject the two lowest tenders?

Let us turn to another of the experts - a Mr. Bruce Cameron. Bruce Cameron and Associates, quantity surveyors, have done considerable work for the Commonwealth Department of Works. I am advised that about 90 per cent, of their jobs in the past have been undertaken for the Commonwealth Department of Works. Mr. Bruce Cameron, who was the quantity surveyor, surely would be one of the experts who would be consulted. I invite the Treasurer to produce in this Parliament and table the letter that was forwarded by Mr. Bruce Cameron to the Reserve Bank authorities protesting against the passing over of the lowest tenders and the manner in which the tenders had been handled. Mr. Bruce Cameron was taken off the job. The Minister for Works said in this Parliament that the reason Mr. Cameron had been relieved of this particular work was that he was going overseas. As a matter of fact, I think that the Minister said that Mr. Cameron had already gone overseas. The Minister said that because Mr. Cameron had gone overseas he would not be able to give the job his attention and therefore the work had been given to somebody else. I am given to understand - and up to date I have been right on the ball - that Mr. Bruce Cameron decided to go abroad only after he had lost the work - only after it had been taken from him by the bank and by the action of the Government, and after he had protested against the handling of this contract and the passing over of the two lowest tenders. Surely if there is any merit at all in the tender system it must be in the public interest, provided the tenderers are able to satisfy all other requirements - and in this case they were, because they had already been investigated - that the lowest tenders should be accepted.

When the Minister was making his reply in this Parliament he based his denial of what I had said on a statement published on 31st August in the Sydney “Daily Telegraph” and attributed to Mr. H. N. Barton, president of the Master Builders Association. In view of that alleged statement by Mr. Barton the Minister claimed that Mr. Barton was satisfied that everything was above board. So, said the Minister, that ended the matter. But on 7th September Mr. Barton wrote a letter, which was published in the “ Daily Telegraph “, in which he denied the accuracy of the statement attributed to him which had been published earlier. He said that he had been questioned over the telephone and that a wrong construction had been put on what he said in that telephone interview. Mr. Barton said that neither he nor the tenderers themselves were satisfied with the way in which the tenders had been handled.

The Master Builders Association has been pressing for some time, I understand, for the responsible Minister to receive a delegation from it, because the association is dissatisfied with what happened. How much longer have this Parliament and the public of this country got to wait until we get a satisfactory explanation?

Mr Jeff Bate:

– Three weeks.

Mr WARD:

– The honorable member interjects and says, “ Three weeks “. That means that the Government has to ride the storm for another three weeks until it can close the Parliament up. But the public of Australia will not be satisfied. It is their money, and they want to know what has happened in respect of this contract. There has been so much endeavour on the part of the responsible Ministers and the bank authorities, and everybody associated with this matter, to put a cloak of secrecy over the whole thing that in my opinion it smells to high heaven. The Treasurer (Mr. Harold Holt) laughs. What else has created the suspicion that surrounds this matter but the silence of the Government itself and its

Ministers, and their refusal to give any information? If the details of the matter cannot be brought to the light of day what, might I ask, is the Government hiding? What are the Ministers afraid of? The two lowest tenderers themselves want the reasons for the rejection of their tenders to be revealed. The Government may believe, as I have said, that it can stall on this matter, as the Prime Minister has attempted to do, but the members of the Opposition will continue to probe it as long as we are able to do so, and if we do not get an investigation this side of the general election the incoming Labour Government will attend to the matter itself.

Mr BARNES:
McPherson

.- The honorable member for East Sydney (Mr. Ward) must be getting very hard-pressed to find something for which to criticize this Government when he will spend a quarter of an hour in dealing with allegations of some mythical irregularity concerning this Reserve Bank project. Of course, it must be embarrassing for honorable members opposite to compare the financial position of Australia after twelve years of office of this Government with the position when they were in office.

I am particularly concerned, Mr. Temporary Chairman, with the financial position of our local government authorities in Australia. I realize that the Commonwealth feels that local authorities are more a State than a Federal responsibility. However, 1 believe that any relief given to local government authorities must have its genesis in the Commonwealth. Since the advent of the motor car the finances of our local government authorities have become increasingly difficult year after year because a tremendous share of their expenditure is necessitated by the building and maintenance of roads, and is an unfair burden on property owners. In Australia property owners pay 61 per cent, of all the income received by local government authorities compared with 50 per cent, paid by property owners in the United States of America towards the upkeep of local government in that country and 40 per cent, paid by property owners in the United Kingdom. Government grants and subsidies to local authorities amount to 15 per cent, of their income. The authorities themselves are responsible for 75 per cent, of all the roads in the Commonwealth, yet they receive assistance in this direction amounting to only 17 per cent, of their expenditure. In the United States 42 per cent, of the expenditure falls on local government. Debt charges alone take up 16 per cent, of rate revenues of local government authorities in Australia. Councils spend 50 per cent, of their loan funds on roads. I believe that a wider opportunity exists to assist local authorities by instituting some form of special tax for use on roads. I realize that nobody likes to see taxation increased, but I think that the seriousness of the financial position of local government in this country is a challenge which we have to meet. America imposes a tax on tires which provides considerable sums for expenditure on roads. I believe that a similar tax in Australia should serve this purpose.

Mr L R Johnson:

– Then why have you not supported the Labour Party’s policy in relation to the petrol tax?

Mr BARNES:

– Some honorable members suggest increasing the petrol tax, but I think that would be unfair because only 60 per cent, of petrol used in Australia is used on roads. I do not know how we could get the users of the remaining 40 per cent, to support an increase in that tax in order to enable further expenditure on roads, but at least tires are used on roads and we could have different rates of tax for different kinds of tires. There could be a special Tate for tractor tires, for instance. I believe that if a tax were imposed on tires and put into a special fund to subsidize road works by local authorities, the people of Australia would be perfectly prepared to pay the tax because they would feel that its purpose was to improve our roads and to ease the financial burden of the local authorities. I know that honorable members opposite do not have much sympathy for our local government bodies. You have only to see the situation in New South Wales where local government is being particularly penalized. This Government stands for complete democracy and in Australia democracy is complete only if you have the three arms of government - Federal, State and local. Our friends opposite are always trying to centralize power in the Federal Government.

That is the socialist aim. It is the Marxist theory. When government is centralized, it is easier to take over. This Government got into power in 1949 because it was opposed to socialist ideas. I believe it is continuing on those lines and will be returned to power by the people of Australia for that reason.

I particularly ask for consideration by the Treasury of this matter, because it is a problem that has to be tackled. Every year costs to our property owners are rising and most charges by local authorities fall on property owners. As I have endeavoured to show, most of the expenses of local authorities are on roads and I think that the cost should be borne by the people who use the roads.

Mr CAIRNS:
Yarra

.- The points just submitted by the honorable member for McPherson (Mr. Barnes) accentuate the need for increased public expenditure. The item that he chose to illustrate this is the need of local authorities for more money for their essential road works. As members of the Opposition realized while the honorable member was speaking, it is astonishing that conservative members of this Parliament, and particularly those on the Country Party side, who can recognize the need for increased funds for road building and for the rest of what goes to make up our national development, continue to support a government which is not prepared to develop the kind of economic policy which will make these things possible. This point, introduced at this stage in the debate, has a particular relevance to the matters I want to discuss - the purposes of economic policy in relation to the work of the Treasury.

It has become pretty clear that it is the Treasury - perhaps sometimes the Department of Trade, but usually the Treasury - which has a crucial influence upon the type of economic policy that the Government applies through its legislation. The Treasury, therefore - and the estimates of the Treasury - have a key importance in relation to this. Once we were able to assume that it had been generally accepted by everybody concerned with this problem that it was the objective of the government in any advanced country to achieve a rapid rate of economic growth without inflation and without unemployment. But if that test is applied to the record of the Commonwealth Government over the last ten years, there is no doubt whatever that it has failed. First of all, for the greater part of its term of office we have had an excessive rate of inflation. In the last ten years the gross national product, in money terms, has risen by about two and a half times. There has been an actual increase in retail prices, however you like to measure them, of well over 100 per cent. That is not over and done with. It is not finished yet. We are trying to live to-day with the harm that that inflation has done.

We have had, first of all, an artificial rise in the cost level. The cost of production of our exporters has risen by more than 100 per cent, in ten years and if the exporters are in any special position of difficulty it is very significantly the result of the increase in costs that the inflation of this period has brought about. They are competing with exporters or producers in other countries whose costs of production have not increased by more than 20 per cent. - about one-fifth of the increase that our people have had to face. Here, again, one is astounded at the continued support of the Government by Country Party members. They represent the export producers who have been forced into this position by the Government that the Country Party has continually supported for ten years.

Having finished with this very high rate of inflation - but not with inflation - since 1960 we now find that we are experiencing not only stable economic growth - perhaps stagnant would be a better word - but also excessive unemployment. There are at least 111,000 registered unemployed and probably another 30,000 or 40,000 on top of that. We have not only this level of unemployment but, at the very best, nothing but a very slow rate of recovery to hope for. We will have throughout this recovery period, because of this type of economy, a high permanent level of unemployment. Australia has, for as long as this policy prevails, finished with full employment. It is no longer the objective of the Government.

Not only do we have unemployment, but also we have unused capacity, estimated in the manufacturing industries alone at over £270,000,000. We have, in addition, a slow rate of economic growth. We cannot achieve a high rate of economic growth without inflation, it would appear, and we cannot achieve it without unemployment. We cannot achieve this because the Government is not prepared to develop the necessary kinds of anti-inflationary instruments for use in public policy.

Mr Forbes:

– What are they?

Mr CAIRNS:

– I can easily understand that the gentleman interjecting does not know. I will quote some statements by Professor Alvin Hansen, to whom I referred the committee last night in an endeavour to answer questions that honorable gentlemen opposite have raised. I recommend to them, if they have any time for reading when one considers the other things they do, that they read “ Economic Issues of the 1960’s “ by Professor Hansen. It is in the Library and has been there for six months although it has not been taken out by anybody but myself. On this question Professor Hansen says that it is wrong to rely on monetary policy, the thing which this Government has relied upon. At page 32 of his book he says -

Another thing we should not do: We should not make the inflation issue primarily a matter for monetary policy. Excessive use of the monetary weapon would force us fairly rapidly into very high rates of interest.

It is pretty clear that a policy which provides for high interest rates - the kind of policy which prevails in Australia to-day - does not reduce aggregate levels of activity. It merely makes them more costly and moves resources closer to the costly end of the scale.

Mr Harold Holt:

– What countries have a lower rate of interest than has Australia?

Mr CAIRNS:

– There are a great many. Even the United States has a lower interest rate policy.

Mr Harold Holt:

– A long-term policy?

Mr CAIRNS:

– Yes, long term and short term. I suppose the Treasurer (Mr. Harold Holt) has not read a book for a considerable time, but I shall refer him to Professor Hansen, who is one of the most respected authorities on the American situation. I emphasize the proposition which Professor Hansen states in this way -

We should stop using the inflation scare as. a political whip to keep much-needed Government expenditures down.

We should stop doing precisely the thing on which the Government’s case against the Opposition in the coming election will be based. The propositions which the Opposition will put to the people of Australia will involve increases in Government expenditure for social services, education and roads, with which the honorable member for McPherson was so concerned. The Government will meet our proposals with precisely the thing that Professor Hansen says should not be used. Let me repeat his words -

We should stop using the inflation scare as a political whip to keep much-needed Government expenditures down.

There is no necessity to use the inflationary whip for this purpose in Australia. Increased expenditures can be met from some of the sources which the Government has used in the past. Deficit finance in Australia to-day is a sound and safe economic policy. The Opposition’s proposals, which will involve a deficit of £100,000,000, will be the basis of a sound and safe economic policy - a policy which is necessary for the economic growth of this country. Why, in 1958 the Government was prepared to budget for a deficit of £110,000,000 when only 63,000 people were out of work! It was prepared the following year to budget for a deficit of £63,000,000 when 45,000 people were out of work, but to-day when 110,000 people are out of work the Government is not prepared to budget for anything more than an apparent deficit of £16,000,000. It is pretty clear that the Government has given up its policy of economic expansion. It is pretty clear that the Government has adopted a policy of conservative finance dictated by the requirements of overseas financiers upon it economically. It is pretty clear that beyond a certain point - it is advisable to go to that point - increased expenditure can contribute to inflation.

Staying with the authority that I am using to attempt to assist a little in the education of the honorable members in the back row opposite who are interjecting, I again quote Professor Hansen. He has stated -

Having reached this point, public investment becomes inflationary. Since the public is unwilling to pay higher taxes, it then becomes imperative for the Government to bold public expenditures to a bare minimum in order to prevent inflation.

The Government will not interfere with private expenditure to cure inflation. Not at all! It will keep down social services; it will pay lip-service to education; it will reduce the amount of public housing and it will not provide adequately for roads. It will do all those things to fight inflation, but it will not interfere with private investment. Professor Hansen went on to say -

I suggest that this philosophy, if long pursued, will make us a second-rate country.

The professor was referring to America. He continued -

I suggest that an optimum rate of growth cannot be reached without a change in social values which will permit a better use of our productive resources.

That is a statement by one of the most conservative economists in the United States. He wants a change in our social values which will permit a better use of our productive resources. When this change in social values is mentioned to the Australian people it will be labelled as socialism, lt matters not what the label is, the unfortunate thing is that the dogmatic use of terms like socialism, free enterprise and so forth prevents any kind of analytical thinking and prevents the people, who are scared or put off or put aside by the use of words of that kind, making an analysis of the problem. If public expenditure, is to be increased relatively, some forms of other expenditure will have to be reduced relatively. This is the problem of optimum economic growth. It must be solved. The. country which will not solve it will become rapidly a secondrate country. This Government and its advisers have made no progress in the solution of this problem. They have not even recognized it.

Mr Harold Holt:

– You think we are standing still?

Mr CAIRNS:

– You are going backwards. Let us look at some of the things that are needed. If taxation policies are to be adjusted the question arises of whether taxation will be passed on. Here we come to the significant problem of what is being called and recognized, at least by the Governor of the Reserve Bank of Australia, as the problem of administered prices. Large companies in the community, because they control the supply of a par ticular essential commodity, are able to maintain or increase their prices at a rate in excess of the movement of their own costs. This question of administered prices - the monopoly price system - is an essential problem which is standing in the way of the optimum rate of economic development in our country. Then there is the upward movement of private depreciation allowances. When the Labour Party puts forward a programme which may involve increased expenditure the cry goes up, “ Where is the money coming from? “

Mr Aston:

– Where will it come from?

Mr CAIRNS:

– A little of it will come from you, that is, if you do not dodge your taxes as I suspect you sometimes might. In 1953 this Government introduced a new system of depreciation allowances after the report of the Hulme committee.

The TEMPORARY CHAIRMAN (Mr Brimblecombe:
MARANOA, QUEENSLAND

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

Mr CLEAVER:
Swan

.- My remarks on the estimates for the Department of the Treasury will be confined to two committees for which estimated expenditure appears under the administrative expenses of the department, and later I shall make some remarks relating to accounting methods as applied in some Commonwealth departments. I shall deal, first, with the Decimal Currency Committee which was appointed on 15th February, 1959, and which submitted its report to the Government on 18th August, 1960. I think all honorable members will agree that this report is a splendid piece of work. Paragraph 3 in the summary of conclusions and recommendations reads -

Because of the uncertainty engendered in commerce and industry by the Committee’s appointment and inquiry, and its consequent effect on the sale of office and other machines which would be affected by decimalization, the Commonwealth Government is urged to announce its decision at the earliest practicable date.

We appreciate the immensity of the task which will face the Government if steps are taken to introduce decimal currency, but we underline the importance of the paragraph which I have read. Some of us noted also that on page 106 of the report the committee referred to the probability of observers from Australia gaining invaluable information from our South African friends. Paragraph 421 is in these terms -

The Committee wishes to point out that the South African situation will provide a unique and invaluable case-study for Australia. The change-over there will occur before the completion of planning for an Australian conversion, and no other country with a comparable degree of mechanization has as yet adopted a decimal currency.

So it was that, when the Australian Government wisely made arrangements for observers to go to South Africa not so long ago, the public in Australia felt that this was another move indicating the probability of decimal currency being introduced. Nothing has yet been announced by the Government. I say again that while this is not something which can be decided overnight, I am referring to it in the hope that the Government will recognize the uncertainty among people engaged in commerce. Indecision is something which we should endeavour to avoid. Furthermore, I express the view - which I think is substantiated by the excellent report to which I have referred - that the delay will become increasingly costly. Paragraph 402 of that report gives some idea of what this cost might be, for it reads -

An attempt was made to assess the possible effects of postponing the introduction of a decimal currency, although only the increase in the number of cash registers and adding and accounting machines was taken into account.

Varying estimates have been made of the cost of converting the machines. It is estimated that the cost of conversion in 1970 would be some 64 per cent, higher than the estimate for conversion in 1963. So I would hope that the Treasurer would bear those points well and truly in mind and relieve the community of Australia from much of this indecision. Perhaps, early in the life of the new Government, which we confidently believe will be the Government which holds office to-day, the decision of the Government might be announced so that there can be a sensible avoidance of unnecessary expense which could run to so many millions of pounds.

The second report to which I wish to direct some comment is also relevant to a discussion of the Estimates. I refer to the report of the Commonwealth Commit tee on Taxation. That committee presented a report which will go down in history as a magnificent piece of work by experts in their particular field. The committee was appointed on 3rd December, 1959. It received some 519 written submissions, and it submitted its report early this year, but I am sure that the recommendations contained in this very comprehensive piece of review work will not be capable of automatic adoption. I do not think the framers of the report would hope that in the final analysis every recommendation to which they appended their signatures would be adopted, but they would naturally hope, as would a very large percentage of those people of Australia who are interested in the science of taxation, that a very great majority of them would be adopted by the Government of Australia. I say that much in the report is worthy of implementation, and I suggest that the following extract from it is significant -

Also it is to be remembered that our recommendations to counter tax avoidance schemes, which, generally speaking, affect a relatively limited range of taxpayers, have permitted us to recommend relief through statutory deductions affecting many taxpayers to a greater degree than would otherwise have been possible within the Revenue limitations of our Terms of Reference

Those Terms require us, in making our recommendations, to have regard to their effect on Consolidated Revenue and to keep in mind the necessity for the Commonwealth to continue to receive from income tax an equivalent amount of Revenue to what might be expected under the existing laws.

We have paid due regard to this direction and our Report contains a chapter showing the estimated loss or gain to Revenue from our recommendations. We think that, making due allowance for the uncertainty of estimates, the figures show that if our recommendations are adopted in toto, the Revenue is likely to be substantially maintained.

There have been some critics of the committee’s recommendations in that direction, but I, for one, feel that the terms of reference were so restricted that the committee had no alternative but to find a field of increased revenue which would make possible, in the framing of its report, recommendations for tax relief which, as the committee says, affect so many whilst the avoidance of tax measures will primarily affect only a few.

As to the agreements which relate to tax avoidance, which comes within that paragraph of the report, the Government has given notice of retrospectivity only to the date of the submission of the report. The Treasurer’s original statement may have left some indecision in the minds of many people, but I frankly believe that the latest statements which he has released have made clear the Government’s intention in this connexion. However, I do suggest to the right honorable gentleman that he might again indicate the Government’s thoughts on this particular point of retrospectivity, for I know that the Taxpayers Association of New South Wales Incorporated recently expressed itself in this way -

In tabling the Report in Parliament on August 17th, the Treasurer indicated that such legislation as was eventually introduced to implement those regulations as were designed to close up technical loopholes (e.g., family partnerships, trusts, superannuation funds, leasehold improvements and private companies) would be made effective as from August 17, 1961.

What the Treasurer did not make clear was whether it was intended that restrictive legislation would apply only to family partnerships, trusts etc. set up on and after that date or that the restrictions would apply to income arising from that date, by such classes of entities already in exister . e.

In my assessment, the Government, through the Treasurer, has made it clear that it is not intended that any legislation which may be introduced to close up technical loopholes shall be made retrospective beyond the date of the tabling of the report, but any trusts, family partnerships, superannuation funds, leasehold improvements and private companies created prior to the tabling of the report will not be affected by the new legislation. The only reason for stating that the legislation to close up the loopholes will operate from ‘the date of tabling of the report was to prevent people creating trusts and partnerships after that date for the purpose of getting in before the amending legislation could be passed. So I underline the importance of introducing legislation at the earliest possible time. Those of us who have been endeavouring to read this comprehensive report by this team of experts recognize very quickly from our reading that this document, which is full of detailed work, will require a great amount of thought and checking before any steps can be taken, and therefore I, for one, would sympathize with this or any government which has the responsibility of reaching a definite decision on its contents.

Reverting to methods of accounting, which, of course, fall within the responsibility of the Department of the Treasury, I wish to refer for a moment or two to the importance of commercial accounting. First, I refer honorable members to paragraph 206 of the fifty-second report of the Joint Committee on Public Accounts, which reads -

Many of our investigations have concerned the form of accounts that should be prepared by commercial or business type activities operating within the Commonwealth Public Account. The annual financial statements which are the end result of conventional accounting methods would provide a ready means for the Parliament to judge the operations of such bodies not provided by the existing published information available in the Estimates, the Finance Statement or the Report of the Auditor-General. Accordingly, your committee proposes that:

a consistent set of “ commercial “ accounting principles should be established for and applied to all commercial or business type activities and undertakings operating within the Commonwealth Public Account.

In passing I refer to the steps taken recently by the Post Office to improve its commercial accounts. I hope that before the session ends, we will have an opportunity to discuss the reports of the committee of inquiry into the Post Office commercial accounts, which the Postmaster-General tabled some time ago. I know that time may present a difficulty, but I believe that there are principles in this matter to which we should devote our attention. It is rather significant that the move by the Post Office to improve its commercial accounts can be traced back to the twelfth report of the Public Accounts Committee, which was presented early in the history of the committee. In paragraph 476 of the report, the committee said -

The Committee cannot over-emphasize the importance of comprehensive commercial accounts, and it has constantly used them for evaluating the results of the Department as a whole, as well as for the branches in each State.

In this connexion, I believe that the Treasury officials should be unremitting in their review of the accounting methods of all government business-type activities and undertakings to ensure that there is no laxity in the preparation of detailed commercial accounts. This committee would find them very acceptable for purposes of comparison and to understand the trend of the affairs of these undertakings.

I wanted to speak on the absence from Commonwealth accounts in general of a provision for a reserve against losses by fire. I believe there is something here for the committee to note. In the final accounts of the Post Office for 1959-60, we note with approval that the provision for loss of stores by fire in the twelve months increased from £389,000 to £425,000. In view of the unfortunate recent loss by fire in the Australian Capital Territory, it is interesting for us when debating the estimates for the Treasury to note that whilst in these commercial accounts this sensible provision is made for loss of stores by fire, no similar reserve or provision exists in the public accounts for all other government departments.

The TEMPORARY CHAIRMAN:

–

Order! The honorable member’s time has expired.

Mr JONES:
Newcastle

.- I wish to bring a matter to the attention of the committee. I am pleased to note that the Minister for Social Services (Mr. Roberton) is in the chamber at present, because this matter affects his department as well as the Treasury. The Treasury is affected because the Department of Social Services has failed to render any positive assistance to the unfortunate people I propose to mention. I refer to those people in the community who have children suffering from cerebral palsy. These children are more commonly known as spastics.

As the Department of Social Services does not provide any positive assistance for these children, the Government and the Parliament should help them and I suggest that one way we can do this is by taxation relief. First let us consider the assistance that is given by governments. I can deal only with those children who reside in New South Wales and who receive assistance according to the policies of the New South Wales Government. They receive rail concessions from the New South Wales Railways Department, which provides a return ticket at single fare for one child and one adult. Most of these children, however, require the assistance of two parents or friends. Because of their handicap, it is necessary for them to travel with two people. Children in the city area are not affected so much, because they receive assistance from the Mosman centre, which is doing a marvellous job. But many hundreds of country children must be brought long distances to the city to receive treatment.

The positoin is clearly one which calls for assistance from this Government. I know of one lad who must travel to the city from the far west of New South Wales. Because of his affliction, he cannot travel by the normal train service but must travel by air to avoid a stop overnight. The parents must meet the additional financial burden; they cannot claim the concessional rail fare but must pay the air fare for the lad and a parent and friend, or two parents. This happens on at least four occasions a year because of the holiday recesses enjoyed by the school he attends. Once the lad reaches the city, he cannot travel by normal public transport but must use taxis.

Although the Treasury may not be able to make a direct grant to these people, something should be done by the Department of Social Services. If the Department of Social Services is not willing to accept the responsibility, we should ensure that these people are able to claim traveling expenses in connexion with their spastic children as taxation deductions under the heading of medical expenses. The transport of these children costs a considerable sum over a period of twelve months. As I say, a child and two adults must be transported over long distances to the city on four occasions a year. The treatment given at the centre makes it necessary for the mother of the child to spend five weeks in two periods at the centre. The mother must travel with her child and must stay at the centre so that she can learn the methods adopted by the centre. This places an additional burden on the parents, because the mother must pay for her board. This may be only a nominal amount but it still has to be met. I therefore ask the Government to consider what assistance can be given to these people. I suggest that the cost of travel in these circumstances be allowed as a taxation deduction.

Another costly item is clothing. I know of a family with two children of similar age. One is spastic and the other normal. The parents, from their experience, say that the cost of clothing for the spastic boy is three to four times more than that for the normal boy. If a boy attends a costly private school, his expenses are allowed as a taxation deduction under the heading of education. The Taxation Branch accepts the cost of uniforms and clothing associated with the education of the child as part of these expenses. So it is with a child attending any school whether it is a private boarding school, a private day school or a public school. The cost of providing uniforms and so on is allowed as a taxation deduction. Spastic children are in effect attending a school and they require much more clothing than the normal child needs for his schooling. As I have said, the wear and tear is three or four times greater than that to be expected with a normal child. They also require various accessories to assist them to walk and sit. The wear and tear is greater on their clothes because the children have not as much control over their bowels as have normal children. I ask the Treasurer, therefore, to consider giving some relief to the parents by allowing a tax deduction for the clothing of these unfortunate children.

Basically, this matter is the responsibility of the Department of Social Services, but if that department will not give relief, surely the Taxation Branch could help by tax concessions. These children are more susceptible to every-day complaints which normal people are better fitted to resist. For example, in winter it is necessary to have the home more evenly heated than normal homes. Radiators, gas fires and other heating appliances have to be in constant use. I suggest that all these expenses might be taken into consideration and a formula determined as the basis for a tax concession.

Medical and pharmaceutical expenses might also be considered. I know some parents who have worked out the comparative cost of providing pharmaceutical and other needs for these children. It has been found that the pharmaceutical expenses of one child when he is home are equal to those of the rest of the family. Some of these expenses can be claimed as a tax deduction but many of the expenses are not accepted.

These are matters that might well be considered by the Treasurer and the Minister for Social Services.

What I have said can generally be applied to physically handicapped persons other than spastics. The Government has accepted the principle that physically handicapped persons need some special relief by exempting from sales tax motor vehicles required by physically handicapped persons to enable them to make a living. This concession applies when a physically handicapped person needs a motor car to travel to work and cannot use public transport. This concession might be extended. Some wives are unable to do normal domestic chores and home duties and the husbands have to employ domestic help. In one case that has been brought to my attention, a doctor advised a man that he must get his wife outside the four walls of the home as often as possible so that she would not become depressed. The husband had to buy a motor car. A wheel chair was adequate in the horse-and-buggy days, but it is not practicable now. In such a case, the sales tax concession might be extended.

These days, it is possible for persons who could not go to a theatre to attend drive-in theatres. This is part of their enjoyment of life, and the Treasurer might consider granting a sales tax exemption for motor vehicles used by such persons. I do not mean that the Taxation Branch should accept the word of a person that he must buy a motor car for a sick or physically handicapped person. Any such claim must be supported by medical evidence. Such evidence might be endorsed by doctors in the employ of the Treasury or the Department of Social Services.

I turn now to the parents and citizens associations and the school canteens that they conduct. I have asked the Treasurer to exempt foodstuffs, sweets and confectionery sold in the canteens from sales tax. I do not suggest that this concession should be granted to private individuals who run canteens at schools on tender or contract. At present, anything that is bought by school canteens for use is exempt from sales tax. That concession applies also to anything that they buy from the proceeds of the school canteen for use in the school. But the things they buy to raise the money are not exempt from sales tax. The only reason the Treasurer could give for this provision was that a concession on such commodities would provide unfair competition with shops near the schools.

Many people voluntarily give their time and effort to assist the schools to buy amenities which are essential in modern times, such as public address systems, cleaning equipment and other knick-knacks that raise the standards of State and denominational schools. I ask the Treasurer to consider giving that little extra assistance that is so urgently needed.

The TEMPORARY CHAIRMAN:

–

Order! The honorable member’s time has expired.

Mr FAIRBAIRN:
Farrer

.- There are several matters in the estimates for the Treasury to which I wish to refer. The first was referred to by the honorable member for Swan (Mr. Cleaver) - the committee of inquiry on taxation matters which was set up by the Treasurer (Mr. Harold Holt). The right honorable gentleman should be congratulated upon setting up this committee. In the main, it has done a very good job. It has pointed out means that are used on quite a large scale to reduce tax payments.

I am sure that most honorable members have read the report of the committee fully. It mentions the case of a family of four brothers who, by forming 34 trusts, were able to reduce their gross taxes from f 27,000 to £7,000. The committee estimates that there has been tax avoidance on quite a large scale amounting, according to its estimate, to something like £14,000,000. I am glad to have the Government’s assurance that these loopholes will be closed.

The honorable member for Swan said that we should introduce legislation to do this as soon as possible. I would qualify that a little by saying that I realize it does need to be introduced as early as possible, because obviously there will be a period of many months when no accountant can advise his clients what action to take if they desire to form a company. At the same time, we have to realize that any legislation must be very carefully prepared and closely scrutinized, and I for one would say that we would do better to err on the side of introducing such legislation a little later, provided we make certain that it is closely examined and well prepared.

There is one matter connected with the committee of inquiry to which I wish to make passing reference. I understand that it has stated that in some cases it feels that sleeping partners should not be eligible for membership in a company if, as a result of having minors or wives, their taxes are reduced. I would say, from my knowledge of country women, that many wives are active members of farm partnerships. I am sure that other honorable members will agree with me that the wives of many farmers contribute greatly to the running of the farm by keeping accounts, cooking for shearers and even helping in mustering, and in many other ways. I do not think it can ever be said that there is any reason why a wife should not take an active part in a farm partnership. My only slight disagreement with the report of the Commonwealth Committee on Taxation relates to this matter.

I want to mention now a subject about which I have spoken on a number of occasions, both in this chamber and outside it. I refer to probate and estate duty, and I suggest that the Treasurer, as he did in respect to taxation, appoint a committee of inquiry to examine this matter. I realize, as does every honorable member, that it is not nearly as easy for the Treasurer to establish a committee to inquire into probate and estate duty as it was to establish the Commonwealth Committee on Taxation. The States, of course, were first in the field of probate and estate duty, and they still receive something like 50 per cent, of the total of moneys raised from these duties. First, my view is that the laws on probate and estate duty are more chaotic than are the laws relating to any other form of taxation in Australia. Secondly, I consider that there is probably a higher percentage of tax evasion in this field than there was in the field of income tax.

Perhaps I may cite a few examples of the operation of the probate and estate duty laws without wearying the committee. I may be as a voice crying in the wilderness, or I may be a crank, but it seems to me that an Australian is an Australian wherever he lives and wherever be dies. I cannot see any reason for a marked difference in the probate paid on his estate according to the particular place in Australia where he dies. If a person’s assets are in New South Wales and he dies in Canberra - provided, of course, that his affairs have been suitably arranged - his estate pays about half as much probate as would be paid if he had died in New South Wales. If a person whose assets are in Victoria dies in Melbourne, the estate pays higher probate than is paid on the estate of a person whose assets are in New South Wales and who dies in that State. One finds the same sort of thing throughout the probate and estate duty laws. For example, if a serviceman from New South Wales is killed on active service, no probate is paid on his estate. If a serviceman from Victoria is killed on active service, full probate is paid on the estate. One could go right through these laws and recite a long list of quite absurd anomalies.

Another example is the probate on an estate in which a life interest is left to a widow, the assets being left to the children on her death. This is a very usual means of providing for a widow. In New South Wales, after a certain length of time has elapsed, a complete new assessment of probate on the estate has to be made and probate paid accordingly. In Victoria, this is not necessary.

I realize, as I have said, that there are difficulties in the way of interfering in probate matters, mainly because this is a State field of taxation. But let us not forget that recently the Attorney-General (Sir Garfield Barwick), by consultation with representatives of the six States, has been able to get agreement on a uniform company law. Why cannot we introduce, in conjunction with the States, some uniform probate law which would remove these anomalies of the kind which I have described? Such a law would have considerable advantages. The first of these, I think, is that it would do justice to the taxpayers. That, probably, is the strongest reason for seeking such a law. A second advantage is that the amount of paper work necessary in probate matters would be greatly reduced. As honorable members realize, probate has to be paid first in the State in which a person resided at the time of his death. If there are assets in another State, or even shares on a registry in another State - for example, shares in Mount Isa Mines Limited are on a Queensland registry - probate has to be granted afresh in the other State concerned. This is described as a re-sealing of probate, but it amounts to a complete reassessment. After the States have their go, the Federal Government has its chop. How many people are concerned in all this and how long does the whole process take? I know instances in which people were asked to have stock re-valued two or three years after they were first valued for probate and the valuation was accepted by the

State in which probate was first granted. The Commonwealth will not take the valuation of the State authorities.

I emphasize that I am talking about the machinery of probate, not about the severity of the rates of probate charged. I could speak at length on this subject, which has many aspects. I think the time has come when we ought to adopt the same principle that is adopted in the United Kingdom, where probate is paid on country estates at a reduced rate. I think that there the rate on estates which are made up of rural holdings is about 45 per cent, of the rate on estates which are made up of industrial assets. I recently received from a constituent a letter on this subject. He did not sign his name; so I was not able to reply to him. He wrote -

Just a line to draw your notice to the high rate of probate. If it keeps on at the present rate it will have a lot more people off the land than on it. It has been known where the father died and paid probate on the property. He left it to his wife. She died and she paid probate on the farm. She left it to her family and they had to sell the farm to pay the probate. I for one do not think it fair.

I hope that this matter will be looked into.

The second matter that I want to discuss in the short time that we have available is the general policy of the Department of the Treasury towards decentralization. 1 am sorry that my friend, the honorable member for New England (Mr. Drummond), is not in the chamber now. He is very voluble on this subject. Decentralization is an ideal to which every one in Australia pays lip-service, but very little appears to be done about it. As a result of the neglect of this problem, we have seen a drift to the cities. There are probably fewer people in the normal country village to-day than there were 50 years ago. Country towns are probably just about holding their own, and some of the larger country cities may be growing. The places where population is expanding - one could almost say “ erupting “ - are the metropolitan areas. Very many people reared in country centres have to go to the metropolitan areas to find employment when they grow up. I think that the time has come when we have to do some hard thinking about this subject and decide whether we want decentralization. If we want it, let us see how we can go about getting it.

I realize that most of the fields which are important in decentralization are the province of the States. Transport and power costs, for example, are of great significance in decentralization. Why is it that, here in Canberra, only a few miles from the Snowy Mountains, the charge for power is the same as that to a consumer 300 or 400 miles away? This does not happen with petrol. The further one goes from the seaboard, where it is landed, the more one pays for it. But consumers close to the source of power do not get it any more cheaply than do those who are much further away.

Mr Bryant:

– That applies only in a State like New South Wales, where there is a Labour government. In Victoria, consumers farther away from the source of power pay more.

Mr FAIRBAIRN:

– Obviously, a highly debatable point is involved. Let us consider the payment of sales tax on the portion of the price of an article that represents the freight charge. This is another difficult matter to resolve. I realize the

Treasurer’s difficulties. Consider, for example, goods sent from Sydney to Wagga Wagga. Suppose those goods cost- £90 in Sydney, and that the transport of them costs £10. Sales tax is then levied on the full amount of £100 when the goods are retailed in Wagga. On the other hand, a Sydney retailer computes sales tax on only £90, and adds simply an extra £10 for transport costs. As a result, the city retailer can undercut the country retailer on every occasion. I quite realize that it is not as simple as I have made it sound, but this built-in assistance is always available to the city businessman.

I would like the Treasurer to give some attention to a scheme operating in Italy known as the Vanoni plan. The purpose of this scheme is to encourage the establishment of industries in the southern parts of the country.. Honorable members are no doubt aware that the north of Italy is the industrialized area, while the south has for a long time been a rural district, and a district of considerable poverty. The Vanoni plan provides for subsidies to be granted to industries established in the south. Loans are available to such industries, and tax concessions are granted. What would be wrong with introducing a similar scheme in this country?

I think the time has arrived when the Treasurer should prepare a white paper on decentralization, setting out plans for encouraging people to move from the cities to the country areas. It is well known that city workers have to pay a great deal of money to get from their homes to their places of employment in factories and other establishments. If such factories were situated in country centres the employees working in them would not have to face the difficulty and expense of travelling many miles to and from their work. I conclude by suggesting that the Treasury can do a worth-while job by deciding how it can assist- decentralization, and then proceeding to do so.

Mr DUTHIE:
Wilmot

.- I am glad to see the Treasurer (Mr. Harold Holt) sitting out this debate on the estimates for his department. This is one year in which we have had the unexpected pleasure of his company while debating these important matters. I want to recall to his mind a suggestion I have been making for the last three years, although it appears that there will be no chance of having it accepted until the Government is changed. I have asked the Treasurer on previous occasions over a period of three years to consider including the township of Shannon in the central part of Tasmania in the zone in which taxation concessions are granted. It is a very small township. Only ten families live there. It is at an altitude of 3,075 feet. Unfortunately it is situated outside the taxation concession zone by a mere stone’s throw. The Shannon River flows on the western side of the township, and it forms the boundary of the zone. In those circumstances the town is considered as being situated outside the zone. I do not think this is just. It is a very grave anomaly in our State, and as very little effort would be required to correct it - it could be done by a small amendment brought down in this Parliament - I feel that this injustice should be remedied.

The township of Shannon experiences worse weather than any other of the hydroelectric townships in the island. It is about 65 miles from Hobart, and to give some idea of the rigours of the climate I can say that on 8th July this year the maximum temperature was one degree below freezing point, the minimum being six degrees below freezing point. At that time the township had 11 inches of snow, and during five consecutive days, from 17th to 21st June, the sun did not appear. It was snowing all the time. The highest maximum temperature in this period was three degrees above freezing.

These are a few facts about this small isolated community. The people living there are doing a terrific job maintaining the hydro-electric station. This station was completed in 1934. It was one of the first of the big hydro-electric schemes in Tasmania to be completed. All of these hydroelectric projects, by the way, are in my electorate. All the other projects, on the southern part of the plateau, are situated within the taxation concession zone, while this one township, which has the disadvantage of the most rigorous climate and the greatest isolation, is outside the zone. It is the only township in the whole hydroelectric network, throughout the western and southern parts of Tasmania and the highlands, that is not included in the zone.

I sincerely suggest that the Treasurer should have another look at this matter. Whether an amending bill could be brought in before the next budget is prepared I do not know, but I do feel that justice should be done in respect of the people who live in this township.

The next suggestion I want to make is, I think, quite a new one. Representations have been made to me on behalf of members of local government authorities throughout Australia. A very interesting scheme has been proposed. We know that members of local councils give their time and energy freely, and that they do very important work. The local councils are the grass roots of government in Australia, and their members are not paid for their services. In some cases a small travelling allowance may be granted, but in many instances councillors do not get even this concession. Local councils are composed of business people, farmers and workers. They represent their particular districts on the councils. They play an important part in community life. They present many trophies. They show leadership in assisting all sorts of movements. They attend various functions, spending many nights in the week away from their homes. Yet they are not paid for one moment of their time spent in this way.

It has been suggested to me that all persons engaged in local government work, as elected representatives of the people, be allowed to claim a deduction of £50 or £100 each year from their gross income for taxation purposes. This would show some appreciation of the work they perform. It could not be open to abuse, because every local councillor is known. They are all elected by the people and their names appear on registers of local councillors. This scheme would provide a practical recompense for the hundreds of hours of voluntary service performed by these men.

During recent years the work performed by local councils has increased to a very great extent. This work must continue to increase, rather than to diminish, because of the expansion of fringe areas around towns and cities. I put forward this suggestion as a practical way of helping these people and recognizing the great value of their work.

I would like also to take the opportunity to refer to sales tax on certain foodstuffs. The Treasurer did not see fit to reduce these rates of tax in the Budget he recently brought down. I particularly mention the sales tax on biscuits. We have received a good deal of correspondence from biscuit manufacturers. It is interesting to note that the value of the products of this great industry last year was £19,973,000. The biscuit manufacturers are among the best customers of our primary industries. In 1958-59 alone biscuits absorbed 58,678 short tons of flour valued at £2,206,352; 16,409 long tons of sugar valued at £1,328,071; and 29,499 cwt. of wheat meal valued at £59,872. In addition, the industry uses enormous quantities of eggs, milk, butter, dried fruits, edible fats, processed milk products and other agricultural products. All biscuits manufactured in Australia are subject to sales tax of 12i per cent. This tax was instituted in the depression years purely as a revenue raiser and has not been abolished. It is high time it was.

The Treasurer speaks with two voices. After several years experience in this place I find it interesting to notice the difference between how one speaks when one is in opposition and how one speaks when one is in government. I suppose that that is the same in all parties. On 19th October, 1949, when the present Treasurer was in opposition and the Parliament had before it the Sales Tax (Exemptions and Classifications) Bill 1949, he said, as reported at page 1660 of volume 205 of “ Hansard “-

Some food items which still carry the full rate of sales tax are cocoa, coffee, custard powders, desserts, jelly crystals, meat puddings, plum pudding and salt.

He went on to say, referring to Mr. Chifley-

The Treasurer has told us from time to time that all basic items of foodstuffs have been exempted from sales tax. I should hate to live in a household which had to exist on a diet which consisted of the basic items of foodstuffs that are so exempt. The poorest household would regard biscuits as part of its normal diet

Mr Griffiths:

– Who said this?

Mr DUTHIE:

– The present Treasurer, when he was in opposition. He continued -

I suppose that there is no housewife with children who would not spend a certain amount of money every week on biscuits. Biscuits are indispensable in every household in which there are children.

Shortly after he made that statement the Treasurer became a Minister in the succeeding Government, and for a long time now he has been the Treasurer in that Government. As Treasurer he now refuses to put into effect what he advocated in 1949. He refuses to reduce or to abolish the 12i per cent, sales tax on biscuits. So there we have the Treasurer in two frames of mind. He has a sort of Jekyll and Hyde personality in this respect. It is marvellous how he could find all sorts of reasons for reducing the sales tax on biscuits when he was in opposition and now can find all sorts of reasons for not reducing it when he is in government. I cannot altogether understand that sort of attitude.

Mr Harold Holt:

– You may have to do the same thing yourself.

Mr DUTHIE:

– I would not mind being in the position to make these decisions, but we must be in government first. But the thing is to have the opportunity. I hope the Treasurer will later give consideration to this sales tax on biscuits. The Australian biscuit industry employs 6,000 people and more than 24,000 other people are dependent upon it. Biscuit companies pay almost £4,574,000 in salaries and wages and commensurate sums in sick, accident and superannuation benefits. The Acting Commonwealth Statistician has revealed that in 1949-50 - the financial year in which the Labour Government left office - biscuit manufacturers produced 117,000,000 lb. of biscuits. The production figure rose to 176,700,000 lb. in 1959-60. That is a wonderful performance for an industry which is shackled by sales tax.

Another industry which has asked for assistance in regard to sales tax is the toilet preparations industry. Sales tax on some toilet preparations is as high as 25 per cent., which is the highest rate. Items bearing this rate of tax include talc powder, hair shampoos and oils, lipsticks, razors and razor blades, and shaving soaps. Those items are used every day by almost everybody in Australia, yet they carry the highest rate of tax. It seems to be a very grave anomaly and a very grave injustice that the men of Australia are subjected to the payment of 25 per cent, sales tax on razors and razor blades.

Mr Cleaver:

– At least there is no discrimination against the ladies.

Mr DUTHIE:

– Not on that point. It may be said that electric razors are now all the thing, but I am still using the oldfashioned safety razor and, like many thousands of other people, I have to pay a tax of 25 per cent, on the blades that I use.

I should like the Treasurer to consider removing the sales tax from some other items of foodstuffs - the ingredients of chocolates. Cadbury Fry Pascall Proprietary Limited, of Claremont, near Hobart, produces some of the best chocolate in Australia. When I was in Queensland in early August at a place some 150 miles from Maryborough, the name of which I had never before heard, I bought Cadbury’s chocolates made near Hobart. That is a wonderful selling effort by this wonderful firm which employs many people in its plant near Hobart. The manufacturers want sales tax removed from the ingredients of chocolates because they feel that its removal would enable them to restore some of the value lost in recent years through pressure of increased costs. They say also that elimination of the sales tax on the ingredients would lead to an increase of weights or a reduction of consumer prices, and act as a great stimulus to sales, thereby increasing employment. They point out the growing importance of the cocoa bean crop to New Guinea. Exports of these beans from New Guinea are rising rapidly and reached 5,870 tons in 1959-60. Australia used about half of this quantity. With sales tax removed from chocolate a still greater quantity could be taken. I think that this should be considered, too.

The TEMPORARY CHAIRMAN:

Order! The honorable member’s time has expired.

Mr BANDIDT:
Wide Bay

– Whenever one starts to talk about Treasury figures immediately a feeling of dullness creeps in, although I suppose that nothing is so important to Australia as these same Treasury figures. I propose to deal with a few aspects of our revenue and also with ways in which revenue can be increased without tears. The Estimates show that for the year 1960-61 total revenue from taxation was £1,418,366,359. Estimated tax revenue for this year is £1,466,000,000. Last year other revenue of £60,590,280 brought total revenue to £1,478,956,639. Other revenue estimated this year, amounting to £64,285,000, brings this year’s total to £1,530,336,000. So it will be seen that Australia is really big business. We find that the estimated yield of income tax on individuals this year is £576,615,000 and from companies £291,000,000. In the course of the past few weeks or so the Opposition in this chamber has indicated that it is going to give a lot more handouts and benefits of various kinds if it attains office. According to its advance promises more than £300,000,000 will be required to fulfil those promises. It would find some of that amount of money by budgeting for a deficit of £100,000,000, which is approximately £84,000,000 more than the deficit envisaged by our Government. So, we can say, in effect, that the Opposition would have to find over £200,000,000 if it wished to carry out its promises. The amount required could be much more than £200,000,000 and might be £250,000,000 or £300,000,000 on top of this huge deficit. How does the Opposition hope to find this money? One way, in addition to finding the £84,000,000 by printing paper, is to increase company tax by taxing capital gains. It will be remembered that the revenue from company tax on the present basis is estimated this year at £291,000,000. If we are going to take another £100,000,000 from the companies by way of a capital gains tax it means, in effect, that companies will have to pay about one-third extra in taxation. Any one who is associated with a company these days and who knows what is required in order to get improved plant, new buildings, and all the other things necessary for increasing business, will shudder with horror when he thinks what it would be like to have to contribute onethird more on top of the present taxation.

To obtain another £100,000,000 through income tax would mean that the tax on the average individual would have to be increased by nearly one-sixth. In other words, the man who now pays £600 in income tax would have to pay approximately another £100 in personal taxation. That is a very nice prospect for the taxpayers of this community! For the Opposition to take an extra £100,000,000 from companies and a similar sum from individual taxpayers in order to carry out its various promises would be to increase seriously the taxation burden in Australia.

Although one or two members of the Opposition have suggested that we should reduce our defence vote by, say £30,000,000, in order to find some of this money, I am sure that the majority of the front-benchers opposite are not in favour of reducing our defence vote. I cannot think that they could suggest such a thing if they had Australia’s interests at heart. One of the important ways in which to assist the economy is to refrain from harming companies and individuals who are willing to work and earn money. But that is a negative way of assisting the economy. An important positive way in which to assist the economy is to see that greater production is achieved without increased costs. It is known that our primary production has just about doubled in the last ten or twelve years and that the production of secondary industry has also increased greatly, but we must have still greater expansion. The trouble about our primary commodities is that over the last eight years - I take that period for fair comparison - prices have fallen very seriously while costs have increased.

As the Minister for Trade (Mr. McEwen), who is also Deputy Prime Minister, has said, if we could put ourselves in the position that we were in with regard to our primary exports eight years ago, we would have another £400,000,000 or more to use to-day. Because of circumstances beyond our control, we are more than £400,000,000 worse off than we would have been had the conditions of eight years ago applied today. How can we increase our production in order to offset this situation over which we have had no control? One way, of course, is to grant more loan money to our export producers and to assist various development projects. We can increase the money that is available to the Development Bank, and I hope our Government will see its way clear, as time goes on, to increase the banks’ funds very considerably because if money and resources are made more readily available to our producers the Government can be sure that they will deliver the goods.

Another way of achieving our objective is to go out and sell our products, and the Government is doing a fine job in this direction and has done so for some time past, in spite of many difficulties. The Government has eased the way for industry to play its part. The Government itself cannot be expected to do the selling. That is a matter for industry, but the Government has introduced tax concessions so that industry can more readily go out and sell.

There is another and more important way, too, for primary production to be increased, and that is by means of additional water conservation. If money is spent on sound water schemes I submit that the expenditure is well worth while. The return from all sound water schemes is very substantial. Let us examine this aspect of the matter from the negative point of view. I wonder what my colleague, the honorable member for Mallee (Mr. Turnbull) would say if we took away all the water storage provisions on the Murray river?

Mr Turnbull:

– It would be “good night”, in that event.

Mr BANDIDT:

– The honorable member says it would be “good night” in that event. That is precisely the position. Water can increase yields, and the consequent increase of revenue can be ten-fold, one hundred fold, or as has been the case on the Murray river, and in many other parts of Australia one thousand fold. That is how valuable water is to our economy. The more water that is supplied the greater the revenue. I therefore suggest that the Government should contemplate the provision of headworks as a national responsibility as well as a national necessity. We know it is vital that the primary producer should have a sure source of water supply. He must know that water is available when he wants it, and he needs it nearly all the time except while rain is falling. The difficulty is that the States have not sufficient money to do the job quickly enough. In Queensland, my own State, less than £2,000,000 could be allocated last year to water supply schemes. How long would it take to develop the necessary water supplies in Queensland at that rate? lt is obvious that the Commonwealth will benefit immediately you put in a good water supply. If a farmer is able to make £3,000 a year instead of £500 because of improved water supplies, he will pay more tax and will spend more money. The man with whom he spends his money will, in turn, make a bigger income and pay more tax. The income that the primary producer makes goes through all these other avenues and everybody who makes more money pays more tax to the Government. If we analysed the figures I think we would find that the Commonwealth would gain very much more than any State would by the provision of headworks for water supplies.

The CHAIRMAN (Mr Lucock:

– Order! I suggest that the honorable member get back to the estimates under discussion.

Mr BANDIDT:

– Another way in which we can increase our revenue is to take positive action to make the big Western nations understand that because we are a comparatively small country we should not be kept down under their feet in the matter of prices for our commodities. The big Western nations should be made to understand that low world prices for primary products are harmful directly to the people who receive the low prices and indirectly to the big countries themselves. Can any one imagine a more ridiculous position than that which existed recently when grants in aid to small underdeveloped nations amounted to £1,500,000,000 and the losses in prices suffered by those nations amounted to £1,600,000,000? What future is there for us if we create this one-sided economy with the big industrial nations going ahead and the small nations slipping back? The Government should take the lead in calling the Western countries to a conference on trade so that they can be made to appreciate that it is in the interests of all that primary products should bring fair prices on the world markets.

Mr THOMPSON:
Port Adelaide

– 1 was interested to hear the honorable member for Wide Bay (Mr. Bandidt) trying to tell the Parliament, in a most discouraging fashion, about the sources from which the Australian Labour Party will obtain the money to do the things that we propose to do if we come to office. Then he talked about making large sums available for water conservation schemes and other works without attempting to tell us where the necessary finance for them will be obtained.

Mr Bandidt:

– We can borrow it overseas.

Mr THOMPSON:

– I am pleased that the honorable member has made that statement. He knows that the Government’s policy is the direct opposite of the Labour Party’s policy. We do not believe in borrowing overseas indiscriminately large sums of money which must be repaid together with interest. How would the honorable member repay the money which he stated he would borrow overseas if he had the authority to do so? He concluded his speech by saying that we were not receiving sufficiently high prices for our primary products.

Mr Bandidt:

– We have borrowed a lot of money overseas.

Mr THOMPSON:

– I know we have borrowed a lot of money overseas, and we have to repay it. The honorable member for Scullin (Mr. Peters) stated very clearly the immense amount that has to be sent overseas to pay the interest on our borrowings. I do not object so much to a straight-out government loan to obtain capital for our national development. Only this week the press carried a statement which was made, T think, by the retiring Ambassador of the United States of America relating to Australia’s capacity to absorb investment. He stated that America recognized Australia as one of the best countries in the world in which overseas investment could be made. But he did not mention the kind of investment as clearly as I would have liked him to do.

When the honorable member for Scullin referred to the dividends which we have to send out of Australia the Treasurer (Mr. Harold Holt) interjected to the effect that the money is being ploughed back into Australia. I admit that a good deal of money is being ploughed back, but the Treasurer cannot have it both ways. He cannot have the dividends ploughed back into Australia and at the same time have Australia better off for that reason. We may be better off because industries are being established here, but every year the amount which has to be sent from Australia to pay the cost of overseas investment or loans is increasing. I do not know whether the Treasurer has ever considered putting a safety valve on overseas investments here. No overseas company should be allowed to hold more than 49 per cent, of of the shares of any company established in Australia.

Mr Harold Holt:

– We would not have very many companies coming to Australia on those terms. In most countries the governments are doing all they can to attract investment from overseas. We are a very fortunate country in that investment is coming here in such quantities.

Mr THOMPSON:

– The Minister has said that we are a very fortunate country. We are very fortunate in having our industries assisted by overseas capital, but the Government has made a very poor showing in ensuring that we get the benefit of the production of those companies. What is the position in Australia to-day? Overseas companies have come to Australia since the end of the war and have established branches here, but about two years ago the Government deliberately lifted import controls which had afforded them some measure of protection. We encouraged them to invest their capital here; we encouraged them to establish factories here; and we encouraged them to provide machinery for their factories. When they did so and when they commenced producing in quantity the Government opened our doors to a flood of goods from other countries.

Mr Harold Holt:

– Was it not a Labour government which entered into the General Agreement on Tariffs and Trade?

Mr THOMPSON:

– I understand that, and I understand that when General Motors came to Australia-

Mr Harold Holt:

– Tb.at.is another proposition.

Mr THOMPSON:

– It is another proposition although some aspects are similar. The Labour Party, and the Minister know that when General Motors came to Australia Mr. Chifley- wanted the company to plough back part of its profits into Australia. That was a sound’ thing to do. But if we allow outside companies to increase their holdings we will end: by being controlled’ by outsiders. We know that the Government has taken a capital interest in certain companies and has insisted that it should hold 51 per cent, of the shares or capital of those companies. But what is the position to-day with General MotorsHolden’s Proprietary Limited? A big G.M.H. establishment is. located in my electorate. I know what it has done for South Australia. Although some honorable members may not agree with me, I believe that if the company had not become established in South Australia the State would not be in its present good position. I recognize that fact and I. recognize that South Australia has benefited, but there is a limit to what you can do in these things. Speaking from memory, I think that General Motors-Holden’s has capital in Australia of over £70,000,000. Only a very small portion of that amount - £2,000,000 or £3,000,000 - was invested by the overseas parent company. The remainder has been accumulated by ploughing back some of the profits the company has made. The investors are receiving dividends on the total capital, not on the £2,000,000 or £3,000,000 which was invested originally. Every company is entitled to earn a profit on the amount invested’ in it.

If a person who paid’ £500 for a house 40 years ago could get £5,000 for it to-day, naturally he would want to enjoy the profit he could derive from selling it for £5,000. These businesses are in much the same position. Although I do not expect the Government to take much notice of me, I warn it that the primary producers of this country will be, as they are now, the people who will be largely called upon to pay the price of having this money invested in Australia. Wool is our main primary export to-day, but we also export many other primary products. The products of our manufacturing, industries form only a small- part of our exports and therefore do little to pay for the goods we import. The Government, says on. occasions that our trade, balance- has improved, by £5,000,000 this month or this quarter, or that this year we are. £20,000,000 to the good whereas we- were £80*000,000 to the bad twelve or eighteen months ago, but the things which I have been mentioning are not included in those, figures. Those figures relate only to the cost of the. goods imported as against the return we obtain from the goods we export. They do not include such things as freight charges, insurance and many other invisibles.

We on this side have a different view from that held by the Government. We believe that we should not place Australia in pawn as is being done at the present time. We believe that some control should be exercised over the position. After all, the Department of the Treasury is responsible for advising the Government as to the amount of loan money needed. The Treasurer tells us what Australia is able to draw from, the International Bank or from some other bank, but. the important point is that the money does not come to us as a gift. Some of it might be ours because of the contributions we have made to the International Bank, but most of it does not belong to us. The point is that our overseas balances include loans we have raised in the United States of America and moneys we- have obtained from the International Bank, and those moneys are not revenue which we have obtained from the sale of our products. Their effect on our balances is similar to the effect of increasing a mortgage on one’s home. For instance, if a man owes only £1,000 on his home and his credit balance in the bank is only £1,000, his position is not improved if he borrows a further £2,000 on the home in order to increase his credit balance in the bank to £3,000. The only effect such a transaction has is to increase his mortgage and decrease his equity in the home. We on this side believe that the Government is not careful enough in these matters. 1 do not say that we must not import the capital goods we require, but I do argue that it is essential that we cut our garment according to our cloth..

Let me -remind honorable members that some years ago, when speaking of imports, the late Mr. -Chifley said - “We do not intend to allow imports to come in indiscriminately or at a rate far in excess of the value of -what we send out to pay for them, and we intend to control the type of goods being imported.

This Government has deliberately set about allowing into this country imports that are not needed. This fact has been disclosed in questions asked in the Parliament within the last day or two, when reference was made to the importation of Asfa and certain kinds of meat.

Mr Makin:

– Canned chicken.

Mr THOMPSON:

– Even canned chicken. At the moment these goods are allowed to come in indiscriminately at high prices. I remind honorable members that we have to export goods to pay for these luxuries.

In the few minutes left to me, I wish to deal with the estimates for the Department of the Treasury. First let me say to the Minister that, as a member of the Public Accounts Committee, I was very pleased to hear the former chairman of that committee, the honorable member for Warringah (Mr. Bland) speaking on this subject. He referred to the Advance to the Treasurer. I shall not deal with that matter, but I do wish to ask the Treasurer one or two questions about the department under his control. For instance, the appropriation for casual and temporary employees of the Bureau of Census and Statistics was £282,800 last year and the amount expended was £284,869; but this year the amount sought is £637,000. Further, when we examine the figures relating to the reimbursement of government departments and payments to agents for statistical services, we find that whereas the amount appropriated last year was £63,500 and the amount expended £65,171, the sum asked for this year is £732,500. I should like to know the reason for this increase. It might be argued that the recent census had something to do with it, and I agree that it might have, but we have not been told that that is so. I am concerned also about the fact that whereas salaries and wages for permanent employees at the Government Printing Office amount to £183,200, those for temporary and casual employees total £302,300. As a member of the Public Accounts Committee, I value the work done by Treasury officials, but I wonder why the large sum of £302,300 is required for temporary and casual employees in this establishment when the amount required for permanent employees is only £183,200.

The CHAIRMAN:

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

Mr WENTWORTH:
Mackellar

– I want to say only one or two things about general Treasury policy, and I say them largely in reiteration of the things I have been saying in this chamber over many years now. We in Australia meet many financial difficulties from time to time. The most recent example in our mind is the crisis which occurred during last year and which required the introduction of the Government’s November measures. I believe that all throughout this Government has been dealing with symptoms and not with causes. Because it has been failing to deal with prime .causes, these crises tend to recur In dealing with them, the Government uses the superficial measures of credit control. I do not say for one moment that these measures should not be used, but I do say they are only a temporary palliative, they are holding measures and nothing else, and unless we get to the prime causes of the trouble we shall have a continuation of these financial crises.

The prime cause of the trouble is the chronic short-fall in savings in the Australian .community. I know that sometimes statistics are produced which, it is alleged, show that Australia is saving quite a lot, but .they are compared with statistics based on a different method of calculation in other countries. The statistics are not comparable.

The inescapable fact is that Australia is not saving enough to create the capital asset needed to maintain her standard of life and her standard of consumption. Because of this chronic short-fall in savings, whenever we have a period of full employment and a period of prosperity, prices tend to rise because there are not enough savings to meet, from local sources, the requirements of these investments. That is a purely elementary demonstrable thing.

What has been done to bring the whole position into balance is to repress the tempo of local activity. It may be necessary, as a temporary measure; to use it as a recurrent measure, and to rely on it almost exclusively all the time is bad; it is foolish. While I do not say that we should avoid these temporary measures when a crisis is on us, I do argue that we should also be doing those things which will avoid a recurrence of the crisis.

We have not done that. We have not yet struck at any point at the root of the trouble. The root of the trouble is this chronic short-fall in Australian savings. There are various measures - I shall not go into them to-night - which can be undertaken in a positive and constructive way to cure this endemic weakness in the Australian economy. I do not think it is good enough to cure it all the time by these superficial measures of credit control which we have been using. These are simple .ind naive in a way; they do not reach to the root of our economic problem at all.

As I said, I put forward in this place, apparently without effect on the Government, some positive steps which I believe could and should be taken, and should have been taken a long time ago, in order to prevent a recurrence of the kind of crisis we have seen. I shall not go into the details. I simply say that by taxation adjustments and other methods we could increase the total savings in the Australian community without hardship to the Australian taxpayer or the Australian consumer.

I would not advocate any violent change. I believe that in all these matters which may involve some structural alterations in our economy, one should go gently. But I do advocate starting now and doing something. I put before the Government - it was not accepted, unfortunately - a concrete suggestion in the form of a private amendment, which honorable members will know about. That is one measure that could be adopted. There may be other measures, but at least, some long-term measures should be adopted.

The other method we have adopted to make good this chronic short-fall in savings, - which is or should be a reproach to the Australian economy in the eyes of the world - is to draw over-much on investment from overseas. We have been quite immoderate,

I think. If one looks at the table produced with the Budget, one sees that the deficits on current accounts for the last four years have been £152,000,000, £185,000,000, £219,000,000 and £369,000,000. It is not a very pretty story. In order to make this deficiency good, we have had to go overseas and let overseas investors come into the Australian economy at bargain rates. It may be said that this helps our international relations, that to have investment from overseas in Australia may help the whole of our relationship with the rest of the world - but I think this is said wrongly. In a moderate sense, this may be right, but not in any immoderate sense. As we have seen in many countries, once overseas investment has a strangle-hold on key points, it arouses political resentments in the country where it is. This does not cement international relations but tends rather to poison them and create sources of trouble.

It seems to me that it is much better to deal with this problem gradually, sensibly and quietly rather than to let it accumulate to a point where a crisis arises. Overseas companies should not be allowed to take over completely key points in the Australian economy. If honorable members look at the newspapers to-night they will see that it is reported that an offer has been made from overseas of £16,000,000 for one of our great companies, Broken Hill South Limited, which is a mining company with large investment ramifications. No doubt this offer will be welcomed by shareholders who see in it some short-term profit. Perhaps it will be welcomed by some financial people, who see in it a net addition to our liquid funds overseas. But this is a key point in the Australian economy that is going, and already too many key points have gone. I do not believe that we should sell existing companies to overseas interests. I know very well that overseas interests are trying, bit by bit, to buy into the greatest Australian company - Broken Hill Proprietary Company Limited, which is perhaps the most Australian of all our companies. I know that so far the incursions that have been made have been slight, but they are continuing incursions, and I do not think we should encourage them.

There is a reasonable weapon in the hands of the Government which would prevent an abuse of this process. Where a given proportion of a company’s capital, amounting to control of it, is not held in Australian hands, we would be justified in imposing upon it a higher rate of company tax. This could be done. It need be done only gradually. I would not advocate anything drastic. I would rather think of moving into this field little by little, so as to ensure not that foreign investment is stopped but that foregin investment is kept under control. We do not want in Australia the conditions that have arisen in Canada recently, where there is widespread resentment against foreign investment.

Mr Bryant:

– What about Cuba?

Mr WENTWORTH:

– We do not want the kind of situation in Cuba to arise in Australia, whether rightly or wrongly. For the protection of the long-term interests of the Australian community, I believe we should not cut off private capital but that we should keep it under reasonable restraint. Furthermore, we would do well if we need capital from overseas to draw a higher proportion of what we need in the form of debentures rather than equity capital. In this way, Government borrowings might be rather more justified than the maintenance of an inordinate level of private investment.

I come back to the point where I started. All these difficulties - the economic difficulties of rising prices whenever we have a high tempo of internal activity and the difficulties of having to rely on foreign investment to maintain our liquid funds - arise in the ultimate analysis from the chronic short-fall in Australian savings. Whatever the statistics may be alleged to prove - people using statistics for this proof are perhaps not fully conversant with the nature of the statistics - it is obvious that Australian savings are not sufficient to maintain the degree of investment that we need for Australia’s progress. What I am saying was considered heresy when I said it eight or nine years ago in this chamber. It is now almost the received opinion. The report of the Chairman of the Commonwealth Banking Corporation, which was recently placed in the hands of honorable members, contains this statement -

Development on the scale we desire, however, can only be achieved through the combined efforts of all sections of the Australian community. Australia’s future prosperity will depend largely upon achieving a higher level of savings, because savings are the essential basis of sound expansion. There is no doubt that Australia can save more, and this would enable more resources to be applied towards investment both in the private sector and in public works. For balanced growth, development of essential public utilities such as roads, power, water supplies and educational facilities must keep pace with our increasing population and industrial capacity.

This statement paraphrases words 1 used eight or nine years ago in this chamber and have repeated since. They were heresy then; they now appear to be the received doctrine put forward by the Commonwealth Banking Corporation only recently.

Mr L R JOHNSON:
Hughes

.- With my colleagues, I was interested in the speech of the honorable member for Mackellar (Mr. Wentworth) which indicates conclusively that he is capable of rational moments. It is a good thing to know that at least one member on the Government side would be inclined to support the very rational arguments that the honorable member for Mackellar has come to pursue after a great deal of badgering on the part of the Opposition over many years. I believe there are a number of other honorable members on the Government side who would accept these views also but for the fear of losing pre-selection ballots because there has been a spate of this sort of thing in New South Wales especially, and probably in other States as well.

The Opposition has been talking about these matters for years and it is good to know that the honorable member for Mackellar has been able to learn from his overseas experiences. He mentioned the countries where there has been a great reaction - a spontaneous reaction - against the domination of national resources by persons living in far-off climes. Of course, the Opposition has drawn attention to this matter. Although supporters of the Government and possibly the Government as an entity have recognized that Australia is being disadvantaged by the importation of excessive amounts of overseas investments, they have condoned it because of the apparent need to balance the budget. They know that the inflow of capital and the imbalance in respect of trade have caused great concern to the people of Australia but the Treasurer (Mr. Harold Holt), who is at the table, has been prepared to stand idly by while Australian assets have been sold out to overseas entrepreneurs so that the very birth-right of the Australian people is in jeopardy.

We know that our resources, including our bauxite and other minerals, and our industrial resources, are out of the control of the Australian people and its representatives. This, of course, is most undesirable. Even the land’ on which our young people in the future will be expected to build their homes is coming under the control and influence of great real estate concerns in which heavy overseas capital investment is evident. This is a sorry state of affairs and I am pleased that the honorable member for Mackellar has directed attention to it.. We hope the Government -will take notice of these statements.

I do- not want to be tempted to speak at greater length on this subject because I rose- in response to remarks made by the honorable member for McPherson (Mr. Barnes)’ about local- government matters. Here again, years after members of the Opposition have directed attention to tremendously important anomalies besettingthe welfare of the Australian people, we. see a Government supporter rising to speak on behalf of local government on the eve of an election. Undoubtedly the honorablemember did so for miserable political! reasons. Local government is the undernourished arm of government which is suffering most from financial malnutrition. Members of the Opposition have repeatedly referred these problems to the Government in speeches and questions. Who can deny that the honorable members for Batman (Mr. Bird), Gellibrand (Mr. Mclvor), Barton (Mr. Reynolds) and quite a number of others have been obsessed with the great problems of local government. Never have we been able to get Government support for our representations. It is a good thing that there is now a realization of the facts of life about local government, as there is inthe case of overseas investment in Australia.

I join with others in speaking on this matter and I am able to-night to voice the opinion, not of the New South Wales Local Government Association, the Municipal Association of Victoria or the Local Government Association of South Australia, but of the thirteen bodies affiliated with the

Australian. Council of Local Government Associations which, over a long period of years,, have made their position perfectly clear on this matter. They have made their views known in conferences with the Prime Minister (Mr. Menzies), by deputation and by inundating the Treasurer with letters emphasizing the crisis in local government.

Although supporters of the Government on occasions have attended a number of conferences of the Australian Council of Local Government Associations - and I refer to the Minister for the Army (Mr. Cramer), Mr. Speaker (Mr. McLeay) before he became the Speaker, the Minister for the Navy (Senator Gorton) and some honorable senators - they have given only lipservice to these problems. They have never obtained worthwhile action to meet the need to re-examine the financial crisis in local government.

The Australian Council of Local Government Associations since 1947 has repeatedly sought a conference to reexamine carefully this difficult problem. In its annual report, the council directs attention to a statement that was made by the Prime Minister many years ago. The report refers to - . . a promise by the Prime Minister at the Melbourne Convention organized by the Australian Council in November, 1950, that he would urge the holding of a Financial Convention in which the Commonwealth, the States, and Local Government should participate, to examine - not for a day but for a prolonged period - the financial relationships of the three Arms of Government.

This was the promise of the Prime Minister away back in 1950 when the right honorable gentleman- was still flushed with victory, having won an election just a short time before. Why has the Prime Minister forgotten the undertaking he gave on that occasion? It is interesting to study the relevant figures. We find that local government rates in Australia increased from £17,300,000 in 1946-7 to £71,700.000 in 1956-7 - a period of ten years. Throughout the country, the average increase in local government rates in that period was 313 per cent. Quite a number of municipalities and shires have increased their rates to a far greater extent. In my owe district, the shire of Sutherland, rates have increased by 583 per cent, in that time. Fairfield has the highest increase in

New South Wales with 597 per cent., but I have given the average increase in local government rates compared with other charges. State taxes have increased by only 291 per cent, and Commonwealth taxes by 185 per cent.; so there has been a far greater increase in local government rates.

We know what great responsibilities fall upon local government. Some involve services that are most important to the people such as health services. My own district on the outskirts of Sydney is a case in point. I have a letter from the shire clerk of Sutherland which, incidentally, was the first district in Australia to be visited by Europeans. This is what the shire clerk had to say on sewerage work in Sutherland -

The population of the shire which is somewhere in the vicinity of 100,000 people, receives 22,526 sanitary services each week . . . ratepayers are spending over £300,000 a year to instal their own sewerage schemes in providing septic tanks, septic closets and chemical closets.

These are all inadequate sewerage facilities, and this is not an isolated case. I have heard Victorians, South Australians and others talk along the same lines. So we have services of a most important nature starved for funds.

In Australia, governments contribute less to local government than they do in other parts of the world. In the United States of America government grants to local government amount to 42 per cent.; in Canada, government grants total 24 per cent.; but in Australia they amount to only 17 per cent. That is to say, there is less assistance for local government from the national government in Australia than is the case in the countries to which I have referred. Even loan moneys have not been flowing adequately to local government. In 1952-53, the loan allocation to local government was £127,000,000. In 1960-61, the loan allocation was £106,000,000. Of course, many local government authorities cannot even afford to borrow more money because they have reached saturation point. So many of them, like the local government area which I represent, are paying 25 per cent, of their income for the repayment of loans.

This Government has not even been fair in respect of the proceeds of petrol and diesel fuel taxes, not that that is any yardstick relating to local government problems or road development in this country. However, at least that much money is needed. I understand that at present we are spending about £48,000,000 of Commonwealth, money a year on roads, and we are holding about £14,000,000 of the proceeds from fuel tax. That is not good enough. In 1926, the Treasurer of the day when talking about petrol tax made it perfectly clear in the Budget Speech what the petrol tax was for. He said -

The State Governments, lacking the power to impose customs duties, are unable to effectively reach all road users. The Commonwealth, therefore, is co-operating with the States in a national roads policy and will impose special customs duties which will be hypothecated for road construction. The imposition of these duties at the source will ultimately result in the road users paying their special tax proportionately to their use of the roads.

This Government has failed to make all the proceeds of fuel tax available to local government authorities even though a lot more money than that is needed by them.

I cannot hear what is being said in the babble which, has suddenly emerged from Country Party members, newly interested as they are in local government problems on the eve of an election campaign. I am unable to hear what they say. They know they have lost the advantage in this matter. I do want to make a point with which I hope they will agree. It is that the Commonwealth should realize its responsibilities in regard to its own property and should provide some assistance through the payment of rates on such property. At the present time the Commonwealth makes an ex gratia payment in lieu of rates, but these payments, of course, very often fall well shy of the amount expected. In my area, in the vicinity of the atomic reactor, the local government authority decided to widen the road so that vehicles travelling to the Commonwealth reactor, as well as other vehicles in the military area of Liverpool and Sutherland, would have better traffic opportunities. The Commonwealth, incredibly enough, imposed on the local government authority the full valuation of the amount of the loan used for the straightening and widening of that road which; was being’ built for the convenience oi Commonwealth vehicles. That is indicative of the unreasonable attitude adopted by the Commonwealth in these things.

Then, of course, we hope sincerely that some consideration will be given to local government authorities in respect of pay-roll tax. It is amazing that in the year of grace, 1961, these poor struggling arms of government are subject to the imposition of payroll tax, and that there has been no relenting on the part of the Government. It is understood, of course, by local government people all over Australia that we on this side of the House have made a clear-cut declaration that when we are returned to office at the next election we will waive pay-roll tax on local governments. We will ensure that all the proceeds of the fuel tax - at least that amount, and I sincerely hope a lot more - will be directed to local government, and we have also given a solemn undertaking that we will, at the request of the Australian Council of Local Government Associations, convene a conference representative of federal and State governments and local government bodies in order that we can hear what the experts have to say - those dedicated people who have been giving their time voluntarily to local government services. We realize full well that at the present time local government is saddled with a money-raising system which is characteristic of the dark ages and which has very little relationship to contemporary problems. Since the present rating system was imposed conditions have changed completely. We initiated a scheme at that time to provide service roads into areas, but since then local authorities have become responsible for a tremendous variety of additional services.

The CHAIRMAN:

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

Mr CLEAVER:
Swan

.- I rise a second time only for a few minutes to complete some remarks which I left incomplete on the subject of losses by fire. I praise the Post Office report for disclosing in its commercial accounts a provision for losses of stores by fire which at 30th June, 1960, amounted to £425,850. In the same report the paragraph dealing with insurance is of interest. It reads -

The Post Office carries its own risks and does not insure against them with outside organizations.

It maintains a Provision for Losses of Stores by Fire because of the extensive holdings on specific premises.

To offset that which is commendable, 1 want to direct attention to the fact that paragraph 152 of the Auditor-General’s Report, recently tabled in this House, showed that losses by fire incurred by the Commonwealth Government in the last financial year totalled £299,514. The policy of the Commonwealth Government, as members of the committee will undoubtedly know, is that the Commonwealth carries its own risk. That means that to the greatest extent possible the Commonwealth acts as its own insurer of property under its control, and accepts insurable risks as early as possible in respect of the acquisition of new material.

It is interesting to note in the paragraph of the Auditor-General’s report to which I have referred the types of fires and the spread of fires throughout the Commonwealth. Some £89,000 odd was lost as the result of the materials laboratory at the Snowy Mountains Hydro-electric Authority going up in fire. At the Australian National University the loss of equipment and stores amounted to £77,000. Fire in a Department of Trade building in Victoria caused a loss of £11,900. The Army features in the list and also the Postmaster-General’s Department again, and there are many other losses of smaller dimension.

The point I want to make is that whilst Treasury officials can be complimented for accepting the recommendations of the Public Accounts Committee, and setting up effective commercial accounting systems in so many arms of the Commonwealth’s activities, the Government talks glibly about acting as its own insurer. As far as my understanding goes there is in the public accounts no reserve fund or no provision for fires of this kind. As recently happened to our distress, a fire in the Australian Capital Territory caused a loss estimated at something like half a million pounds. Earlier I pointed out how valuable it was that the Post Office, so affected by that fire, does have a provision for loss by fire, but I make the point that we have nothing comparable with what the Post Office has in the general framework of Commonwealth accounts. It is one thing to say that we carry our own risk, but it is quite another thing to have commercial accounting systems adapted to underline and confirm the statements that the risks are so carried. I will consider that our system is a loose one if at some future date the public accounts of the Commonwealth do not provide for a reserve account of this nature.

My friend the honorable member for Farrer (Mr. Fairbairn) in an earlier speech urged the Treasury to prepare a white paper on the subject of decentralization. From inquiries I have made I have ascertained that no research has been made into this problem of insurance, so I too would make the request to the Treasurer that officers of the Treasury could very profitably be asked to undertake up-to-date research to ascertain what provision other governments throughout the world make for losses by fire. I will be most interested to learn at some later date that this research has taken place and some scheme evolved so that when we talk about being our own insurers we will have a reserve fund in existence that will ensure that in the case of any disastrous fire the Commonwealth Budget need not be adversely affected.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– Mr. Chairman, this discussion on the Treasury Estimates has ranged over a wide field, and many topics of great interest to the committee have been canvassed. I do not think that the committee wishes of me, at this hour, a long or detailed reply to the observations that have been made. Indeed, quite obviously, a good deal of technical study ought to be given to some of the matters which have been raised before they are debated in a general way. Some matters raised have of themselves been very general in character. The honorable member for Yarra (Mr. Cairns) and some of his colleagues, for example, have opened what could be regarded as a general budget debate in this discussion of the Treasury estimates. Other matters of a detailed kind have been mentioned.

The honorable member for East Sydney (Mr. Ward) has raised again the question of the building to be constructed for the Reserve Bank of Australia. My colleague, the Minister for Works (Mr. Freeth), has pointed out earlier in this place that the decision on the tenders submitted was one for the governor and the officers of the bank entirely within their own jurisdiction. The tender documents contained the normal stipulation that the lowest or any tender would not necessarily be accepted. Although this is a matter in which the governor and his colleagues exercised their own jurisdiction, on the information conveyed to the Government, I can assure the committee that in our opinion the governor acted with judgment and in good faith in arriving at the decision that was made. I do not think that anybody in this country would imagine otherwise about a very respected senior member of the banking administration of this country, Sir.

Some of my colleagues have raised points about decimal currency and the Commonwealth Committee on Taxation.

Mr Ward:

– Will not the Minister give the reasons why the lowest tender for the Reserve Bank building was rejected?

Mr HAROLD HOLT:

– I shall not give the honorable gentleman any reasons, because these matters are entirely within the jurisdiction of the Reserve Bank itself. It has the right and the capacity to come to a judgment on these matters. If it does not choose to go into details - and there may be very good reasons why it does not wish to do so - the responsibility is not one that I consider it necessary for me to accept in this matter on behalf of the Government. That aspect of the matter is entirely between the governor of the bank and the public. But I think that most people will accept the general assurance that I give and will have sufficient confidence in the Governor of the Reserve Bank as, I hope, will those on the other side of the chamber who had a hand in his original appointment as Governor of the Commonwealth Bank of Australia, to accept the decision of the Reserve Bank Board as having been made in good faith in the exercise of sound judgment.

All the matters which have been raised in this discussion will be carefully studied by my officers and myself, Sir. There may be more suitable occasions later when we can debate them at greater length.

Mr WARD:
East Sydney

– Mr. Chairman, surely the Treasurer (Mr. Harold Holt) does not expect the committee or the Australian public to be satisfied with the reply which he has just given to observations made in this discussion on very important matters relating to the letting of a contract for the construction of a building for the Reserve Bank of Australia. Who is the Government trying to protect? The two firms which submitted the lowest tenders are not asking for the matter to be kept confidential. They are not afraid.

Mr Harold Holt:

– Is the honorable member trying to smear the Government or the bank?

Mr WARD:

– I want to know the facts; that is all. Public money is at stake here. Is the Governor of the Reserve Bank in so privileged a position as not to be required to give any explanation to anybody in this country about the expenditure of public money? What redress has the public? How can the people ascertain the facts? The firms which submitted the lowest tenders say, “ Let us know why our tenders were rejected “. They are not asking for any secrecy. The Master Builders Association of New South Wales is not asking for the matter to be kept confidential. Yet, apparently, nobody is prepared to give the information that practically everybody wants and to say why the two lowest tenders were rejected. The Government does not seem to regard the throwing away of approximately £40,000 of public money as being of any concern whatever. All that the Treasurer has said is that he is satisfied that the decision was made in good faith and that this is a matter purely for the governor of the bank. This is a most extraordinary situation, and I imagine that not many people will be satisfied with it. Will the Government see the delegation from the Master Builders Association that has been appointed to seek the reasons for the decision that was made. Will the Government seek an explanation from anybody or explain the reasons to anybody? Did the Government arrange that the governor of the bank be sent overseas behind the iron curtain for a period, until this Parliament went into recess for the election, so that no further questions could be asked of him? I do not suggest for one moment that the governor of the bank is the one who is covering up or that he is hiding something on his own initiative. He may be quite prepared to give the reasons for the decision that was made, but probably the Government does not want the reasons for the rejection of the two lowest tenders to be revealed. Donations to party funds may have been involved in the decision to give the contract to a certain firm. The influence of donations to party funds is not unheard of.

Mr Cleaver:

– Here it comes!

Mr WARD:

– It is of no use for honorable members opposite to try to laugh this off. I well remember that, after the 1949 election campaign, the late Mr. Chifley stated that the present Government parties had been financed by the private banks of this country. He challenged the present Government to have the matter investigated, but it was not prepared to do so. There is no doubt that evidence to show that that was the case in 1949 could have been produced. Why should we imagine that the situation is any different in 1961? This may be the answer. Probably, Dr. Coombs has been told that he must not answer the questions that are being asked. F. T. Eastment and Sons and E. S. Clementson (New South Wales) Proprietary Limited - the firms which submitted the two lowest tenders - want to know the reasons why their tenders were rejected. In New South Wales, there have been many instances in which the lowest tender has not been accepted, but I know of none in which the government of the day has not declared the reasons for its decision. That is all that is sought on this occasion - the reason for the rejection of the lowest tender.

Can it be argued that F. T. Eastment and Sons could not do the work successfully? This firm has completed some of the greatest projects undertaken in New South Wales in recent years for the present Labour Government and earlier anti-Labour governments of the State, and for the Commonwealth. It constructed the Yaralla Repatriation Hospital, the Greenway block of flats at the northern end of the Sydney Harbour Bridge - one of the greatest housing projects in the Sydney metropolitan area - and the Haymarket telephone exchange. I could enumerate a whole list of important projects successfully completed by this firm or at present being undertaken by it. Similar information could be given in respect of E. S. Clementson (New South Wales) Proprietary Limited, thefirm which submitted the second lowest tender, and probably in respect of every one of the fourteen builders approved to tender for the Reserve Bank building.

Let us examine this matter carefully. This is not a case in which the Government, by advertisement, invited building contractors to tender to undertake a particular work. It was not done in that way. In this connexion I invite the Treasurer to study replies that were given in the Senate chamber to questions directed to the appropriate Minister by Senator Willesee. Under the new procedure that has been adopted, the Government invites building contractors to register, to indicate their intention to submit tenders. When they have done so, they are investigated. It is only after they have passed various tests that they are invited to tender. According to the Minister who answered the questions in the Senate, this procedure is adopted designedly by the Government so that building contractors may be saved unnecessary expense. In this particular case, however, it seems that thirteen of them were involved in unnecessary expense, because I am satisfied that thirteen of the fourteen never had a chance of getting the contract, from the very time when they were invited to submit tenders.

Mr James:

– It was cut and dried!

Mr WARD:

– Yes, it was all cut and dried. If it was not cut and dried - and this is the pertinent question - why can the Government not say why the two lowest tenders were rejected? Was it because it was decided that those firms were considered incapable of completing the work? Were they considered financially unsound? Has the Government some other objection to these firms?

The Treasurer asked me who I was trying to smear. What about these two building contractors whose tenders, although the lowest, have been rejected without any reason having been given? They are the people who are being smeared by the Government, because in the building world in Sydney all sorts of speculation is being indulged in as to why either the Clementson or the Eastment firms were not given this contract.

I say to the Treasurer that he cannot simply brush this matter aside with a few words. I think the Australian people are entitled to know the facts. If any authority in this country is spending public money, whether it be the Governor of the Reserve Bank, the Treasurer or the grinning Minister for Works (Mr. Freeth), who is grinning only to hide his embarrassment over the whole matter, then the public is entitled to know how it is being spent. The people should have evidence that it is being spent to good purpose. If any such authority accepts a tender £40,000 above the lowest tender, then some one in this country sooner or later will have to give a reason for such acceptance.

Proposed votes agreed to.

Progress reported.

page 1957

ADJOURNMENT

Immigration - “ Hansard “ Report

Motion (by Mr. Adermann) proposed -

That the House do now adjourn.

Mr Allan Fraser:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

. -I have some further information for the House which I think is important on the Brenner case. As a preface, let me clear away two side issues. First, I agree entirely with the Minister that the Government should have unfettered power to keep out of Australia persons from other countries. A man not subject to our laws should haveno right of appeal to a court to over-ride the refusal of an entry permit. In raising that issue, the Minister for Immigration (Mr. Downer) is clouding the real issue, because there is no substantial disagreement on that point. For Australian residents against whom security charges are made it is appropriate that there should be a tribunal to decide the issue. There is no good reason to provide such a tribunal in the case of people of other nationalities.

Mr Murray:

– Why didn’t you adopt this attitude previously?

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I took this stand right from the beginning. My objection is not to the power of the Minister, but to the way in which he uses it. Since he has no control over security, and since he knows by his ministerial experience that security reports can be and sometimes are wrong, he should not condemn and damn a man on the basis of a security report until he has checked its accuracy in every way possible. For this purpose he should have at least an independent advisory committee which could, where desirable, itself examine the applicant for an entry permit. My quarrel throughout has been, not with the exclusion of Brenner, but with a procedure which is wide open to error and, therefore, to cruel injustice.

Further, the facts show that the Minister is utterly wrong in blaming the Opposition for his own public defaming of Brenner. The exclusion of this man was announced in the press before it was ever raised in this House. I originated the question here without using any name, simply asking the Minister whether he could give the House any information. The Minister replied by naming Brenner and by branding him as a person unfit to enter this country as a university lecturer or in any other capacity. There was absolutely no need for the Minister to make those statements. His denunciation was uncalled for, it was made without providing any information at all, and he followed it later with a further gratuitous and even stronger denunciation, but again without providing any supporting information.

If the Minister has aroused public anger he should not be astonished. There is still a sense of fair play, a sense of a fair go, in this community. The Minister has said either too much or too little. Having gone so far in damning this man and his family for life - who would employ him now? - he should at least accede to Mr. Brenner’s urgent request to state these dreadful grounds for exclusion and give Mr. Brenner the chance to clear his name if he can.

Originally I had no opinion on the merits of Mr. Brenner’s exclusion, which, of course, I had no way of judging. I suppose I assumed that the action would not have been taken without the strongest grounds. But, while I still lack the necessary information on which to base judgment, the further my inquiries have gone the more my doubts have grown. I feel now that there is a substantial possibility that Mr. Brenner has been falsely condemned.

Mr Turner:

– Why do you think that?

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I will tell you. Primarily I was impressed by Mr. Brenner’s reaction to the decision. He was quick to acknowledge his youthful membership of the Stern gang and his application to join the Israeli Communist Party. He has gone to great lengths, both in public statements and in private letters, to explain these things as though they, and nothing else, must be the grounds of objection to him. The Minister’s subsequent statement that the exclusion is based not on these two grounds but on something else of the gravest nature seems to have left Mr. Brenner completely baffled. Of course he may be a very clever actor. He may be a most brazen hypocrite. But, having studied his letters to the Adelaide University Staff Association and to friends of his, as I have had the oportunity to do, I must say that he appears to show a genuine bewilderment, and also despair if he is not given the chance to know and answer the charges made against him.

I have said that the Minister knows from his experience that decisions based on security reports can be wrong. I cite five cases that I have handled myself - four of which I have taken to the present Minister - in which, after studying the rebutting information given by me, the Minister has reversed the original decisions. These cases concerned, first, a public servant refused an overseas posting after having been informed that it had been approved; secondly, a British subject refused registration as an Australian citizen; thirdly, two rejected applications for naturalization; and fourthly, a refusal of an entry permit to a man whose brother was already here, and against whom all that could be discovered, apparently, was that in his homeland he had been on the committee of a trade union the secretary of which was a Communist. In all these cases, the reversal of the decision is a tribute to the Minister’s fairness in reconsidering these matters on the evidence I was able to give him, and at the same time an admission that the security reports on which the original decision was based were either false or grossly exaggerated.

Honorable members will be aware that in these cases, not knowing the nature of the security accusation on which the decision has been based, you have to go into the man’s past life as far as possible and submit as much detail as you can. You do not know what you have to answer, therefore you provide all the information and all the evidence that you can get hold of. I did this, in the case of Brenner, over the weekend, particularly talking with people who knew him in London, and the information that they gave rather discounts the picture of a dangerous security risk. Of course, they were going on their recollection, which may not be accurate in all details and, of course, Mr. Brenner may have been able to keep his wicked activities entirely hidden from his Australian friends.

But look at these points: Brenner has been in England for six years, and the United Kingdom security service has seen no necessity to interfere with his activities or to seek his deportation. He has been employed by the British Broadcasting Corporation on its Hebrew service, surely only after the most careful screening. He has been a contributor to “ The Economist “, which is scarcely considered a subversive publication. He was offered an engagement by the University of Maryland, United States of America, to give extension lectures to American troops in England. Such an offer seems to be the highest testimonial to a man’s security character. Brenner did not take up this appointment, because of his appointment to the University of Adelaide, for which he had already prepared twenty lectures when notified of his exclusion. His specialty is the study of price movements in the fifteenth and sixteenth centuries, particularly the examination of Latin scripts revealing bread prices and other price movements at that period - something which seems far removed from the role of an up-to-the-minute espionage agent.

The referees, whose statements supported his application for appointment to Adelaide, included one of the most highly respected professors at London University and Brenner himself was interviewed in London, both by the professor of history at the University of Adelaide, and by another senior member of the history department of that university, before his appointment was recommended. The three referees were also interviewed, both in regard to his personal character and his academic suitability, and in both respects the information obtained was favourable, as shown by the unanimous statement of the council of the University of Adelaide. The facts of his early career, since made public by himself, were freely disclosed at that time, and in the light of all the inquiries and interviews the university considered him an appropriate person for the appointment. The university has learned nothing since to cause it to change that view.

An extraordinary fact which has come to my knowledge is that at the same time as Brenner applied for the Adelaide post, he applied for a history lectureship in the University of New South Wales. He received an official letter offering him the position in that university and stating that a letter would follow from the registrar, covering arrangements in detail; and he then received instead another official letter from the University of New South Wales, stating that the position was no longer available. This will be of particular interest to those who are familiar with the controversy on whether security reports have been used by that university in deciding on applicants for positions. It does appear that for some such reason this university changed its mind about Mr. Brenner, without waiting for the Minister for Immigration to refuse him an entry permit. It is likely that it had a tip-off of some kind, of which the Attorney-General on the front bench probably has some knowledge.

No fair-minded Australian can feel happy about the miserable and furtive manner in which this piece of McCarthy-like character assassination has been carried out on this man. Coming at the same time as the allegations of security intimidation of a postal employee in Brisbane with a threat of the Crimes Act, these things are indications of a growing secret police state being created by this Government in Australia.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.

Mr WENTWORTH:
Mackellar

– The matter to which I wish to make reference is the chain of events which started in this House in the debate on the motion for the adjournment last Wednesday night. On that occasion, the honorable member for Lalor (Mr. Pollard) said that he was speaking about a man to another man. In respect of the first man, he was told, “ He is a Com “. I now quote from the honorable member’s speech - i said: “ On what do you base that statement? i resent it. X know the man. He is not a Com.”, not that it is a disgrace to be a Com.

Now, Sir, it was not reported in that manner in the first printed draft of “ Hansard “. As soon as I found that in that draft the words “ He said “ had been inserted, so as to put on some one else the responsibility for the statement which the honorable member for Lalor had himself made in his own name, I raised the matter in the House. And it appeared, on inquiry, as you know, Sir, that the “ Hansard “ draft had been falsified by the honorable member for Lalor, and on his own admission that is so.

Mr SPEAKER:

– Order! The word “ falsified “ must be withdrawn.

Mr WENTWORTH:

– I withdraw the word. I say instead that it was improperly corrected by the honorable member for Lalor. This was admitted by the honorable member himself in the House.

I think that he has not been quite frank with the House in this regard, because this morning, in making a personal explanation, he said, in effect, “ I corrected the draft so as to read not what I said “ - he exonerated the “Hansard” staff- “I corrected the draft so that it contained not what I said but what I meant to say “. Now, Sir, I do not think that this was being quite frank with the House.

Mr Pollard:

– I said, “What I intended to convey “.

Mr WENTWORTH:

– I looked further in the remainder of the admitted “ Hansard “ draft, which is right as I remember it, and I read -

Mr Wentworth:

– What?

Mr POLLARD:

– Is it a disgrace to be a Com?

Mr Wentworth:

– Yes.

Mr POLLARD:

– Is it? It was once a disgrace to be a Christian.

These are the admitted remarks of the honorable member for Lalor. I ask the House to consider this matter in its context. Did the honorable member for Lalor really mean that somebody else said that it was a disgrace to be a Com.? He said, in reply to my interjection -

Is it a disgrace to be a Com.?

He said that this was just like the charges which were levelled at the early Christians. It was once a disgrace, he said, to be a Christian. Let uslook at the implication, which is a very serious implication indeed. The honorable member for Lalor is apparently of the idea, first, that communism will take over the world, like Christianity did. This is a clear implication in what he said; secondly - and even more seriously - that as the charge that it was a disgrace to be a Christian was false, so also is false the charge that to be a Communist is a disgrace. This comes very perilously near blasphemy, in the true and technical sense of the word. The equation of the history of communism with the history of Christianity, the putting of them in parallel like this, is one of the most serious things that has been stated in this House in my recollection. I feel that the honorable member for Lalor is perhaps revealing too much the trend of his secret thoughts. This is one of the things which should be remembered - I hope will be remembered - and taken to heart by the colleagues of the honorable member for Lalor, by his electors, and by the people of this country who are called upon to vote for the party which, by its interjections now, is apparently supporting the honorable member for Lalor. Let me deal with the chain of events. Yesterday morning when I brought this matter up in the House the Leader of the Opposition (Mr. Calwell) on a point of order referred in the most opprobrious terms to what I was doing. He said I had no evidence. In point of fact I had the best evidence - the evidence of my own hearing, which has turned out to be correct on the admission of the honorable member for Lalor himself. The Leader of the Opposition used some quite strong language against me and to-morrow morning I propose at questiontime to ask the Leader of the Opposition if he will see fit to make an apology to me for the imputations he has made about me for saying things which have been proved to be correct and which the honorable member for Lalor has now admitted to be correct.

Mr POLLARD:
Lalor

.- I have little to add to what I said this morning, but I do want to say this: Very soon after the honorable member for Mackellar (Mr. Wentworth) came into this Parliament I realized that he was a man with an obsession, and the plain fact is that he has a maggotty mind.

Mr SPEAKER:

– Order! The honorable member may not use that language. He must withdraw it.

Mr POLLARD:

– Well, Mr. Speaker-

Mr SPEAKER:
Mr POLLARD:

- Mr. Speaker, I remind the Parliament-

Mr SPEAKER:

– Order! The honorable member will withdraw his language.

Mr POLLARD:

– Yes, if the honorable member does not like it.

Mr SPEAKER:

– Order! The honorable member will unreservedly withdraw it.

Mr POLLARD:

– Yes, I look upon the honorable gentleman as a rather unfortunate individual, and I pity him rather than hate him. Here is a man who, in relation to something that 1 said - and I quote it, and this shows how stupid it all is - said that I had said -

It was once a disgrace to be a Christian.

So it was, in the eyes of the pagans who prevailed before Christianity -

In your mouse-sized mind any one who differs from you is a Communist.

There is an election coming on. The honorable gentleman has the impertinence to refer to that as being near to blasphemy. If he wants a bit of personal mud thrown about let me say this to this Parliament: The honorable gentleman in his conversations outside this House has got the filthiest mouth I have ever listened to. If you want mud, work that one out.

Mr McColm:

– In what way?

Mr POLLARD:

– You know what filthy words are. Would you deny it? No, you will not, because you are a truthful man. Mr. Speaker, people cannot throw mud about without getting some back.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I wish to take a point of order, Mr. Speaker. The statements that the honorable member has just used are offensive to me and to other honorable members on this side of the House.

Mr SPEAKER:

– Order! There is no substance in the point of order.

Mr POLLARD:

– All I have to say, Mr. Speaker, is that this is part of the tactic used by the honorable member for Mackellar from the very moment he entered this Parliament to brand the Australian Labour Party as a Communist party. It is not a new tactic. Of course this kind of thing is frequently done immediately prior to general elections. Let me read from what Sir Granville Ryrie had to say on 7th March, 1923, as reported in “ Hansard “. He said, referring to the Labour Party -

The party in those days was different from what it is to-day. Then there were men like the ex-Prime Minister (the Right Honorable W. M. Hughes) in the Labour party. But both the party and its objectives are different nowadays. To-day it stands for Socialism, pure and simple; its ideals are absolutely the same as those of Soviet Russia. We do not want the kind of thing in Australia that Russia has experienced in the past few years. Bolshevik Russia has run red with blood, and we know that there are a great many in the Labour party in Australia at this moment who stand for the same thing. There are men here who think the same thoughts as the men who are running Soviet Russia; men who possess the same sentiments as the Bolsheviks. We should all determine, as far as may lie in our power, that they shall not hold the reins of power in the Commonwealth.

Listen, they are saying now that this party to-day is not as good as the party of Chifley and Curtin. Just think, since that statement was made by Sir Granville Ryrie in 1923 this great party has governed Australia in its greatest distress, and its greatest hour of need. That is the answer. And now, on the eve of another election, this sort of dope is dished out by the honorable member for Mackellar. What does it convey? What is behind it all? The plain fact, Mr. Speaker, is that whereas in 1949 when the Labour Party left office there were 29,000 Australians unemployed - mostly men moving from job to job in the seasonal industries - to-day, after twelve years of this Government, there are 110,000 Australians registered as being out of work and a total of nearer a quarter of a million actually out of work. There are numerous people working short time, and there are 62,000 people drawing unemployment relief, among them hundreds of young men between the ages of 16 and 21- (A Government supporter interjecting - )

Mr POLLARD:

–Shut up! You do not like this. You have had your chance and now I am putting a bit of my party’s propaganda. There are 62,000 men drawing unemployment payments and, the greatest tragedy of all, thousands of young men and women from 16 years of age to 20 years of age who have never had a job. They are congregating in the industrial suburbs of Melbourne and Sydney to-day in small groups, living on their 25s. a week unemployment pay. They have nothing to do, and the result is that in Melbourne and Sydney crime is on the increase. Prominent and responsible clergymen in Melbourne have condemned this. This Government knows that this has occurred by virtue of the fact that after twelve years in office there is a free run for many men in this community, without rendering one day’s service physical or mental, to draw heavy tribute from the community in excess interest rates and extortionate profits on sales of houses and land to the extent that the economy of this country has reached such a pitch that the Government - stupid, incapable, incompetent, after enjoying twelve years of the greatest prosperity in the economic sense that this country has known - finds itself incapable and with no knowledge of what remedy to apply to the problem. The result to-day is that our international balance of payments deficit amounts to £1,400,000,000. To-day some unemployed men are resorting to crime, and the youth of Australia are in the most parlous position that they have ever been in. Is it any wonder that you want to cover up? Is it any wonder that you want to resort to the old tactics of 1923? Is it any wonder that you want to defame the presentday leaders of the Labour Party whom you will praise, after they are dead, for having done great things, just as you did in the cases of Chifley and Curtin? All I say to the honorable member for Mackellar is that I throw his taunt back in his face. My character and my reputation in my electorate will stand up to his at any time. That is all 1 have to say about the matter, and I think it is ample.

Thursday, 12th October 1961

Mr JEFF BATE:
Macarthur

– The honorable member for Lalor (Mr. Pollard) has failed to tell this Parliament the reason why he altered the “ Hansard “ report of his speech. He put out a smoke screen instead of replying to what the honor able member for Mackellar (Mr. Wentworth) had said. The House will remember that the honorable member for Mackellar, above all, has endeavoured steadfastly to uncover what has been going on in the trade unions which control the selection of honorable members opposite. If it had not been for the honorable member, we might never have known what was going on in the Australian Labour Party, nor would the decent right-wing trade unionists, who will not have a bar of the Labour Party, have known. The trade unionists are voting for the Liberal Party because they have learned through the statements of the honorable member for Mackellar of the things that have been happening. We on this side of the House are proud to have him in our party. He has always been indefatigably on the ball on this subject. Because of his efforts, the party on the other side of the chamber is a disorganized rabble. It had to destroy seven of its members. If honorable members opposite want to attack the honorable member for Mackellar, I suggest that they have a look at what Bourke and Keon said about the lot of them. They were honest men.

The honorable member for Lalor, for the first time in this Parliament, Mr. Speaker, has run away from a statement that he made. Until this moment he has never been a coward. On this occasion he has tried to attribute a statement of his to somebody else. Of course, there is something wrong with his statement as it appears in the report. The honorable member not only altered the “ Hansard “ report; he also altered the sense of it. Then he comes in here and admits that he did so. If he wants to go back a few years, let me also go back a few years so that we may see what actuates the honorable member. In a speech that he made on 2nd May, 1940, he said, according to the “ Hansard “ report -

Much has been said concerning the red menace of communism. I have taken a lifelong interest in politics. I have studied the developments of communism and other “ isms “, and have closely observed the trend of various political movements. I am convinced that there comes a time in the life of every political movement when the rise of some unorthodox, vigorous element within its ranks -

These are the words of the honorable member for Lalor-

Mr Reynolds:

– What of it?

Mr JEFF BATE:

– He referred then to the red menace of communism - that was his description of communism - when the rise of some unorthodox, vigorous element within its ranks has a beneficial effect -

Not very beneficial when we consider it - because it gingers up the dunderheads, and brings to the forefront the urgency of doing certain things for the good of mankind as a whole.

He went on to say -

Communists are growing in strength because they appeal to the imagination of the young.

He said that, and he is now nodding affirmatively. He went on to say -

The moment this Government adopts a sufficiently comprehensive policy of true progress, which has as its purpose the uplifting of the masses, the removal of destitution, and the abolition of injustice, the need for a Labour party, a Communist party, or any other reform party will cease to exist.

That has happened now, so there is no need for a Labour party or a Communist party.

I have been quoting the words of the honorable member for Lalor, as recorded in “ Hansard “. Now, I propose to read from the “ Tribune “, the official organ of the Communist Party and to link that quotation with the question asked by the honorable member for Lalor last night - “ Is it a disgrace to be a Communist?” In effect, he has asked, “ Is it a disgrace to be a member of a movement which has disrupted and enslaved much of the world, a movement which believes in war, a movement whose supporters have said that just as the First World War produced Russian communism and the Second World War produced Chinese communism, the third world war will produce world communism?” Communism has enslaved 20 nations and a thousand million people while the West has been trying to make people free. Yet, the honorable member asks, “ Is it a disgrace to be a Communist?” That is the movement which about ten honorable members on the other side of the chamber have always been ready to defend. Communism is the enemy of all mankind. It is the enemy of Christian civilization and the most atheistic, evil force which has ever appeared in the world. Yet the honorable member, with that woollyheaded thinking of his, asks, “ Is it a disgrace to be a Communist?”. Then he attacks the honorable member for Mackellar although that honorable member has tried, without let-up, to expose the evil and the danger of communism to this country.

The honorable member for Werriwa (Mr. Whitlam), the Deputy Leader of the Opposition, gets up in this House and speaks about Sharpeville. He says that at Sharpeville there occurred the worst massacre since the Hitler regime. He forgets the massacre in Hungary, of course. Honorable members opposite always forget anything that the Communists do, because those things are right in the eyes of the pre-selection committees which put them in here, and which have hold of the Labour Party. I come to the “Tribune” article to which I have referred. It relates to a speech by the honorable member for Lalor, the champion of the Communist Party. The speech received headlines in the “ Tribune “.

Mr Pollard:

– Mr. Speaker, I ask for a withdrawal of that remark. I have never been the champion of the Communist Party. I have opposed the Communist Party, just as it has opposed me.

Mr SPEAKER:

– Order! I ask the honorable member to withdraw the remark.

Mr JEFF BATE:

– If it is offensive to the honorable member for Lalor, I withdraw it. The “ Tribune “, under the banner headlines, “ Labour Man on ‘ Red Menace ‘: Appeal to Young “, stated -

Communists are growing in strength because they appeal to the imagination of the young, said Mr. Pollard, M.H.R. for Ballarat, in a speech last Thursday in the Federal Parliament.

The report of his speech takes up two columns of the newspaper. Of course, when we heard him say the other night. “ Is it a disgrace to be a Communist? “ he was going back to the old line.

The honorable member made a speech when the German fascists made their infamous pact with the Russians, or perhaps I should say when the Russians made their infamous pact with the Germans. Typifying the Labour Party’s then anti-war campaign, he said that these internal political theories did not matter; the countries concerned could sign a pact. How dreadfully wrong he was with that one! How wrong he was to praise the pact between the Germans and the Russians! This is the man who alters “ Hansard “ and runs away from the beliefs he had in the old days. What is he seeking to do? Is he trying to delude the people of his electorate or does he hope to delude the people of Australia who will destroy the Labour Party at the next election because of Labour’s woolly thinking on communism?

If we want further evidence, Mr. Speaker, we may pick up a newspaper and see the heading, “ Plea to disown unity ticket.”. We see that the Deputy Leader of the Opposition has written to the Victorian executive of the Labour Party to ask it to disown a unity ticket. But the Victorian executive has not done so. In union after union we see what is happening. In the electrical trades union, whose members include Harry Jensen, there are five noted Communists. We see what is happening in the Amalgamated Engineering Union. Day after day we see what the Communists in the trade unions are doing. What does it mean? It means that when the Labour conference meets, the 500 trade union leaders and 200 members of the bedraggled A.L.P. branches who come together are under the effective control of the Communists. The Communists control the Labour conference and through it, the Labour Party, because these men here are the creatures of the Labour conference and of the Labour Party outside which, as I have said, is controlled by Communists.

Mr HAYLEN:
Parkes

.When this Parliament goes into the limbo of forgotten things on 9th December, history will record that the Government up to that time had within its ranks smearers, faceless informers, those who support faceless informers and those who destroy every aspect of civil liberty as we see it. Everything that is said by honorable members on this side of the House is made the subject of a frantic search to get something on the Labour Party. You can forecast the ugly way in which a debate will develop when we have time to discuss anything on a motion for the adjournment of the House.

The honorable member for Mackellar (Mr. Wentworth) - a paranoic if ever there was one, a man who froths at the mouth at the mention of the word “ Communist “ - makes me suspect that there is only a cigarette paper between him and his desire. He is a fit subject for the psychiatrist’s couch. He should have a good look at himself in the mir.ror that a psychiatrist would supply for him. The bucolic member for Macarthur (Mr. Jeff Bate) - it should be McCarthy - rants and raves and gets himself into a frothing fever. All of his rantings and ravings are aimed at this side of the chamber and show the pattern that the Government is following in looking for that so-treasured and so-desired rabbit out of the hat - some smear to put on the Labour Party before the election. The Australian people know the basic facts of the Government’s record and of its mismanagement of the country. The Government is definitely done, so it must hope for a smear to assist it. The Government’s rabble-rousers are expected to bring these issues forward.

The real issue which has brought me to my feet is that the Government tries to malign men such as the honorable member for Lalor (Mr. Pollard) and other honorable members, and refuses to accept the challenge on civil liberties offered by the honorable member for Eden-Monaro (Mr. Allan Fraser), the honorable member for Yarra (Mr. Cairns) and others. The Government is only mirroring here what is being done outside. The security blanket which has fallen over the people, and the general attitude of fear and concern which the Government has created, are reflected outside. The charges that I shall make to-night are the charges which we made some time ago in relation to the Crimes Act. The mouthings of the honorable member for Mackellar and the honorable member for Macarthur to-night were levelled at our attitude to that legislation. When the Crimes Bill was being discussed during a long debate on clause after clause and amendment after amendment, we pointed out that we felt the proposed legislation was dangerous. We were called “ Commos “, fellow-travellers and haters of our own country, but the evidence to-day shows that every one of our prognostications has come true. There is no place in Australia where any one can be sure of being away from the activities of the informer.

I want to direct attention to the almost universal use of the Crimes Act and the threat that it offers to the Australian Broadcasting Commission - the stodgy old A. B.C. As long ago as April last it was stated that the staff of the commission came under the provisions of the Crimes Act. That was enough for some gum-shoe boy to start interfering with radio broadcasts. The latest and most serious case occurred a few weeks ago- Bob Sanders, who is well known in this House, conducted a. radio session entitled “ Calling: Canberra “. Afterwards he was quizzed on the telephone. I thought that when the Attorney-General (Sir Garfield Barwick) made telephone tapping a legal gimmick, the telephone would be tapped when information was required. Bob Sanders was guilty of one crime - he decided to have a lively session. A lady named Mrs. Nelia Maslova, a university woman and the general president of the Soviet Friendship Association, was visiting Australia. Bob Sanders talked to her on his programme and asked her to meet an educated New Guinea native named Robin Kumanai. He asked them to talk together for a few moments about differences in the United Nations in regard to New Guinea. After this friendly interview, in which the lady gave her version and the young man from New Guinea gave his version, was over, the man. who conducted the session was dismayed to find, according to evidence contained in the “ T.V. Weekly” of 6th October, that his tape had been lost or the matter on the tape had been eliminated.

Then some one who claimed to be from the security service rang him and quizzed him on this matter. He was asked, “Why did you bring this Soviet citizen on to your programme? Why did you interview a New Guinea native?” A series of such intimidatory questions was asked of this commentator. He was told that the provisions of the Crimes Act applied to him, as well as to the Australian Broadca «ti:ig Commission which had to submit to directions and surveillance. That is exactly what the honorable member for Mackellar is trying to do to members of this House,, bat fortunately we are under privilege and can throw his story back in his teeth The honorable member for Macarthur hai done the. same as the. honorable member .’or Mackellar has done. The quizzing of the radio commentator shows, the activities of the informer, the interrogator,, the pimp, the perjurer and all the things about which we warned the Government.

The Attorney-Generel refuted all our claims. He would not believe them, and he said that we were romancing. But now he has a case to answer, not to us as the Opposition, but to the Australian people. Let me warn the House that the Australian people are deeply concerned. The security service has become a farce. When we want answers to questions relating to a professor who is seeking a job in this country and many other cases, we are swept aside. No one must know what goes on. The faceless informer prevails. Men thousands of miles away can condemn a man here. A man close at hand can tell lies. There is no way of catching up with it..

We all know that this position grew out of the notorious Petrov case and what happened during the sittings of the royal commission on that case. I want to speak in defence of a man. who has been badly maligned in this country by the faceless informer. When speaking of Dr. Evatt’s staff, Sir William Owen, the royal commissioner, said -

What disturbs me is- the mention of Dr. Evatt’s staff in Document J.

I have checked my facts so that what I shall say will be accurate. Dr. Evatt’s secretary was stood up for reasons which as we shall see, were completely wrong: When the. hearing moved to Sydney, Dalziel attended. I was there with him, because he is my friend. After days, of fanciful evidence which would have delighted Gilbert and Sullivan we came to the terrible thing that had disturbed His Honour. lt was an allegation against Dalziel, made by a faceless informer, a voice in the dark. Those are the things that we fear more than anything else in this country, because there is a risk that we may not retain our liberties. The terrible allegation against Mr. Dalziel was that a visiting professor named Klackhorn was reputed’ to have said that Dalziel told him that there were subversive elements in New South Wales schools. A meeting was alleged to have taken place at Federation House;. Sydney, where this world-shattering piece of information was retailed to the professor. So far so good. But what actually happened? There was nothing much wrong with the story except this: Dalziel did not know Klackhorn; Klackhorn did not know Dalziel; Klackhorn had not met Dalziel, then or later, Dalziel did not make such a statement, and the professor did not repeat it; there was no meeting at Federation House on that or any other night. Obviously Professor Klackhorn did not ask a question of Dalziel, nor did Dalziel give the professor any information.

This matter was mentioned to the royal commission. The commissioner stated that there was not a tittle of evidence against Dalziel, and the categorical denial obtained from the professor from Harvard University cleared Dalziel completely. It is all right to have an investigation, but this is where the activities of the faceless informer and the gum-shoe man, and the new terrors of underground information, come home. The inthedark informer had done his filthy work. The judge had given verisimilitude to his statement that he had been disturbed by hearing that something was wrong with Dr. Evatt’s staff. Mr. Windeyer, counsel assisting the commission - he is now a judge - said that document J was merely a farrago of nonsense. We all remember what was said then about those things, but this is the terrible sequel: Dalziel is a working journalist and a public relations man, who, because of that smear, finds it difficult to get a job. We are all arraigned because of that. If you kill a man’s incentive to get a job, you begin to destroy him. Fellows like the honorable member for Mackellar and the babbling cow-puncher from Macarthur should be sure that their facts are right before they destroy a man’s soul and his human capacity to earn a living.

Dalziel to-day is working part-time for a Protestant organization. Otherwise he is unemployed. He is a marked man. Wherever he goes he is tagged. It is said of him, “That man was in the Petrov commission “. That is the result of the work of the faceless informer. That is the rottenness of the system which creates the whisperer, the urger, the perjurer, the pimp and the rat-bag of which the honorable member for Mackellar is a worthy example. But here is something sardonic for the people of Australia to consider.

Mr SPEAKER:

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

Mr DRURY:
Ryan

.- 1 regret that the honorable member for Lalor (Mr. Pollard) has written what 1 must regard as being a disgraceful chapter in the history of this Parliament. I believe that he has been less than frank, and that he has been less than fair to the members of this House in the way in which he has altered the draft of his speech. I am very concerned indeed about the way in which the transcript has been amended. The remarks of the honorable member shows perfectly well that he has a double train of thought, as the honorable member for Mackellar (Mr. Wentworth) said earlier. The honorable member for Lalor has drawn, at least by inference, some kind of mental parallel between communism and Christianity. To-night he has expounded his statement that it was once a disgrace to be a Christian by explaining to us that he was referring to the days of the Romans, the Christians and the lions.

I submit that the clear inference of the words recorded at page 1688 of the “ Hansard “ report, when the honorable member asked “ Is it a disgrace to be a Com? “, is that the honorable member was thinking at the time that it was not a disgrace to be a Communist. That is the only way in which I can interpret the honorable member’s words. I am concerned that the honorable member, who represents probably 40,000 or 50,000 decent Christian electors, should rise in this chamber, speak in this way and draw such a parallel, whether by inference or otherwise. It is to be deplored.

Christianity is a belief in God and the teachings of Christ and his apostles. If ever anybody suggests again in this chamber in one breath that there is a philosophy which can in any way be aligned with Christianity, one can only be very sorry for that person and his particular philosophy. Honorable members opposite are interjecting. It is always noticeable, Mr. Speaker, that a section of the Australian Labour Party is most vocal and vociferous whenever communism is attacked. Of course, that is precisely what the honorable member for Mackellar did to-night. The honorable member for Parkes (Mr. Haylen), who preceded me, said that the Australian people are very anxious. Yes, they are very anxious to know where the

Australian Labour Party stands on the subject of communism. All the interjectors on the other side of the House are representatives of the left-wing element to which I refer. Shortly I shall link them with another matter, which will not please them very much. Communism is atheistic materialism. If belief in that philosophy is not a disgrace, then I must flatly disagree with the honorable member for Lalor. Communism means a denial of God and the spiritual qualities of man. Communism is a complete negation of the finest ideals of mankind. It stands for a denigration and destruction of all that is decent in human nature. Christianity, on the one hand, aims to establish peace on earth and goodwill among men. Communism, on the other hand, aims to enslave mankind and to establish Communist domination of the entire world. Yet the honorable member for Lalor asks “ Is it a disgrace to be a Communist?”

Christianity, Sir, stands for the strengthening of family bonds. Communism stands for the separation of children from their parents, the separation of husbands from their wives and the complete destruction and annihilation of family life. Is it a disgrace to be a Communist, Mr. Speaker? Christianity stands for the preservation of human rights and freedom, and for the dignity of the individual. Communism stands for the liquidation of all those who oppose the ruthless thrust of the red machine. The Communists are ruthless opponents of law and order and national security. Is it a disgrace to be a Communist, Mr. Speaker?

Now I expect to hear quite a lot from honorable members opposite who to-night and during the last two or three weeks have been very vocal about the Brenner case. Usually I do not read the “Tribune” but I have in my hand a copy of that publication dated Wednesday, 4th October, last - the day before that on which the honorable member for Lalor delivered the speech we are discussing to-night. These headlines appear on the front page -

Brenner case shows . . .

To save democracy Menzies must go.

That is precisely what the left-wing element of the A.L.P. has been telling us night after night for the last week or fortnight. Honorable members opposite are interjecting again. 1 know they do not like this. This is what the “ Tribune “ had to say -

The Menzies Government’s secret police ban on Mr. Yablochkin Brenner’s appointment to Adelaide University staff disgraces Australia in the eyes of the world as a country becoming a police-state.

Is it a disgrace to hold those views, Mr. Speaker? The editor of the “ Tribune “ further states -

This act of stark dictatorship by the secret police chief, Brigadier-General Spry, should rouse the whole Labor movement and its supporters to demand that militarist hands be kept off Australian liberties.

Do you want me to read more of that article? There is another such article on page 3 of the same issue of this paper. I know honorable members opposite do not want to hear me read it. I remind them that this publication is available in the Library. Probably they know what is printed here, because they have been espousing this very doctrine night after night in relation to the Brenner case. The article on page 3 to which I refer is headed “ Secret police terror tactics exposed by Labor M.H.R’s.”. Then the article refers with approbation to certain leading leftwing members of the Australian Labour Party who have been so vocal in regard to the Brenner case.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– To-night we have had an exhibition of election jitters by members of the Liberal Party. They know that on 9th December they have to face the electors and try to stand on their record. They know that it is utterly impossible to succeed. Consequently, they attempt, as always, to drag in the old red herring of communism. Any one who is listening to them would think that every second person in the street is a Communist, that there are Communists hiding behind every bush, and that the Communists are about to take over Australia. The plain cold fact is that not more than about 1 per cent, of the total population of Australia are Communists or are likely to be Communists - unless this Government stays in office for another three years.

Mr Ward:

– It makes Communists of people.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– As the honorable member for East Sydney says, a government of the kind we have now makes people turn to communism. There is not the slightest shadow of doubt that at the general election on 9th December the Communist vote will increase, because every time there is misery and unemployment and people are denied the right to work - capitalism denies them that right - people turn to communism. If this Government remains in office for another three years, the Communist vote will be greater than ever. If the Government remains in office for another six years, the Communist vote will be greater still. If the Government remains in office long enough, the Communists of Australia will eventually succeed in capturing the reins of Government. I repeat it is this sort of government and the state of affairs which the administration of this Government produces which cause people to turn to communism. Forty per cent, of the people of Italy have turned to communism - because illiteracy, disease, degradation, misery and poverty are the ingredients of a society which turns to communism for relief. That is the sort of thing that we can expect here.

It has been very interesting to note that of all the people in the Parliament who should be attacked, the honorable member for Lalor (Mr. Pollard) has been singled out by the honorable members opposite for attack. They have seized on some simple remark that he made during a debate and have tried to manipulate it to mean that the honorable member is sympathetic to the Communist Party. Nobody has done more to fight communism and the kind of thing that communism stands for than has the honorable member for Lalor. There is one honorable member opposite - the honorable member for Hume (Mr. Anderson) - fast asleep. He can never be accused of being disinterested when there is any chance of running after a real Communist. Have a look at the interest he is taking in the debate. Why is he not up attacking the honorable member for Lalor? He is not attacking him because he knows there is not a scintilla of truth in the charges. There is a man who does respect Reg Pollard. I will guarantee that privately the honorable member for Hume would never tolerate or encourage the kind of insidious remarks that are being made against the honorable and gallant member for Lalor, a man who received his commission on the field of battle, which is more than some of the honorable gentlemen opposite have done. The Prime Minister (Mr. Menzies) would never join in this scurrilous campaign and tirade of abuse against the honorable member for Mackellar - I mean the honorable member for Lalor - because he knows there is nothing in it. Since the honorable member for Mackellar (Mr. Wentworth) laughs at the mention of his name, I will oblige him by saying what his own comrades think about him in this Parliament. Time and time again I have tested out his friends on the other side by suggesting that he would probably be a minister if only they had an elective system of appointing the ministry. Each time they laughed uproariously and said, “ Why, he is a ratbag; fancy appointing him! “

Have a look at the honorable member for Macarthur (Mr. Jeff Bate). Why, I will never forget the time when he went out on Sydney Harbour in a canoe with a wellknown Communist journalist employed by one of the Sydney newspapers. He and the Communist journalist rowed out on Sydney Harbour to Garden Island in an attempt to prove that Garden Island did not have any proper means of detecting a spy if one should go there. When the smart honorable member for Macarthur stepped out of the canoe on to Garden Island the only thing he saw was the Communist rowing away laughing, leaving him there to be arrested by one of the guards on Garden Island. He was taken to Redfern police station and he rang up Jos Francis, who was then Minister for the Navy, and pleaded with him to be let out. He said to the guard, “ I am not a spy. I have my gold pass. I am a member of Parliament.” The guard on Garden Island said, “ But that is what we would expect a spy to have. We -expect a spy to have an alibi. Come on! “ And they marched him up. with a bayonet in the small of his back, to Redfern police station. When the honorable member for Macarthur eventually got permission from the sergeant of police to ring Canberra to find out from Jos Francis whether he could be released, Jos Francis said, “ I do not know what I can do about this. I will have to see the Prime Minister.” And the Prime Minister said, “ Jos let him stay there; it will do him good. He has made a big enough fool of himself. Let him stay there overnight and he might wake up to the fact that he cannot do this kind of thing.” And this is the kind of irresponsible individual who has the hide to come into this Parliament and cast aspersions on a person like the honorable member for Lalor. How could anyone be so ridiculous!

Now we come to the honorable member for Ryan (Mr. Drury) who gets up in a state of mock indignation attempting to divert people’s attention from the real issue, which is not communism but what causes communism. And the cause of communism is the kind of system which this Government tolerates, encourages and perpetuates here. I have told the House what the friends of the honorable member for Macarthur think about him, what Jos Francis said about him when he was at the Redfern Police station. I have told the House what the friends of the honorable member for Mackellar said when I suggested to them that he might get the vote if we had an elected ministry. Now let me say what the friends of the honorable member for Ryan, who has just resumed his seat, say about him behind his back. They always call him Dreary Drury.

These people think they are clever, but the real brains of the parties on the Government side are not participating in their stupid, scurrilous attack on the honorable and gallant member for Lalor. Not they! They are leaving that to the silly member for Lilley, as they call him. Silly Lilley, he is called.

Mr SPEAKER:

– Order! I ask the honorable member to restrain himself and to withdraw that remark. It is offensive to the honorable member for Lilley.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I withdraw it; I apologize for repeating what has been told to me. The honorable member for Ryan gets up and says that communism has no respect for the dignity of man. Of course, it has not. But neither has capitalism. Capitalism has no respect for the dignity of man and no respect for the equality of man. It has no respect for Christianity, and the thing that makes me marvel often is how members on the Government side will pledge themselves to capitalism irrespective of the extent to which it cuts across Christianity. Answer that! It is impossible to answer it because the kind of situation that the Government of this country is producing is not the kind of situation that Christianity stands for.

Mr Freeth:

– You are an atheist.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– And that from a man who, I thought, would stop all this silly business once he was elevated to the Ministry, because I understand that when he was appointed he promised the Prime Minister that he would stop it. But he cannot resist joining in the clowning that goes on amongst the backbenchers on the Government side. I do not know how much longer the honorable members on this side will have to suffer intimidation and blackmailing by people on the Government side who are trying to intimidate us into retreating from a situation that we believe to be right. Let me frankly ask honorable members on the Government side, “ If you are really concerned about communism, why do you not face up to what it is that causes it?”

Mr SPEAKER:

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

Mr McCOLM:
Bowman

.It has been fairly obvious to-night that quite a number of red herrings have been drawn across the two main subjects which were originally under discussion. The first one was the Brenner case and the second the alterations which were made in “ Hansard “ by the honorable member for Lalor (Mr. Pollard). If I might take the second subject first, I say that I have not the slightest doubt in my mind about the honorable and gallant member for Lalor’s present position in this matter. But there is also not the slightest doubt that he did say the words and that an attempt was made, apparently successfully temporarily, to change what was said at the time. If I remember rightly, the honorable member went even further. I have not read the particular “ Hansard “ in which the passage appeared, but he said, “ You can use this at election time in any way that you like “.

Mr Pollard:

– That is right.

Mr McCOLM:

– Fair enough. You said that, but, having said it, for heaven’s sake, why try and change it? That is my whole point, and it is the only point I wish to make in connexion with that particular part of the debate that has taken place to-night. What was said basically by the honorable member for Mackellar (Mr. Wentworth) was perfectly accurate. The statements were made in the first place. An attempt was made to change the sense of those statements in “ Hansard “, and I am very glad that it was not successful. 1 come now to the second matter - the Brenner case. In the course of the discussion to-night, a number of interesting things have cropped up. The honorable member for Hindmarsh (Mr. Clyde Cameron) said he expected the Communist vote to increase at the next election. He went further and said that if this Government remained in office the Communist vote would increase still further at the next election, that if this Government remained in office then we would see a Communist government.

Mr Bryant:

– He did not say anything of the sort.

Mr McCOLM:

– You will pardon me - that is exactly what he did say.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– That is what I said, and that is what I meant. So you can get that quite clear.

Mr McCOLM:

– Then do not let us argue about it. That is what you said, and that is what you meant. We can place one of two interpretations on that. The first is that the Communist Party in itself would gain sufficient strength to win the Government.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– That is right.

Mr McCOLM:

– The other way would be for the Communist Party to get seats through the Australian Labour Party. Just look at what is happening at present in Queensland. The No. 2 Labour candidate on the Senate ticket, Dr. Poulter, is a friend of mine. I have known him for a long time; but I am talking now not in terms of personal friendship but in terms of politics. There is on record in the “ Worker “ a statement by Mr. Williams of the Australian Workers Union that Dr. Poulter is a fellowtraveller. (Opposition members interjecting) -

Mr McCOLM:

– I am telling honorable members opposite what Williams has said of Max Poulter; not what I say about him. I should like to impress members of the Opposition that I am talking in terms of their own politics and quoting what one of their supporters has said about their own candidate.

There is not the slightest doubt in the minds of most people in Queensland about the No. 3 Labour candidate on the Senate ticket. He is known as “ Comm-unity ticket Arnell “ or, I should say, “ Unity ticket Arnell “.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Now you stick to the “ Hansard “ report.

Mr McCOLM:

– All right, I will stick to it, “ Comm-unity ticket Arnell “. But let us get back to the question of Mr. Brenner. One thing that intrigues me slightly is an apparent change in the approach of the Senate or the controlling body of the Adelaide University, in regard to Mr. Brenner’s appointment. Some years ago, a very close personal friend of mine - Ross Anderson - was at that time a lecturer in law at the Queensland University. Before he died he became Professor Anderson and was Professor of Law at the Queensland University. While he was lecturer in law at the Queensland University, he applied for a professorship in the chair of law at the Adelaide University. I understand that there were three applicants and I have it on very good authority that Ross Anderson did not get the appointment because of his political views.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Because he was known to be a friend of yours would be a good reason.

Mr McCOLM:

– He was one of the most distinguished members of the Australian Labour Party that I have met. The point I wish to make is that at that time apparently the Adelaide University must have made some inquiries. I do not think its decision was right because Ross Anderson although undoubtedly radical in his views, was one of the greatest constitutional lawyers in Australia. He was one of the finest Australians I have known but he did not get the appointment.

I do not know whether the Senate of the Adelaide University has had the same opportunity of finding out - or thinking it found out - about Mr. Brenner what it apparently thought it had found out about Ross Anderson, but 1 say this: Several things have been said about Mr. Brenner which he himself has confirmed. The first is that he was a member of the Stern gang for some five years. In the course of that time he became an instructor in small arms. As has been mentioned in this House previously, nobody becomes an instructor in small arms fire, particularly in an active unit, unless he has had a bit of practical use of the application of it. To me, the fact that a man had been an active member of the Stem gang would be sufficient in itself to debar him from entering Australia, just as membership of the German S.S. would to me be sufficient disqualification for immigration here. Some members of the S.S. have been given permission to enter Australia and I think it is a damned disgrace.

Mr. Brenner has admitted that he was a member of the Stern gang. But unfortunately, to my mind, the Minister for Immigration (Mr. Downer), has said that this is not a ground on which Mr. Brenner was banned from entering Australia. The Minister has also said that the fact that as Mr. Brenner himself has admitted he applied in 1950-51 to join the Communist Party is not a ground on which he has been refused admission. The Minister has said that the grounds are more severe than either of those. In my opinion, the first one would have been enough. In regard to the second ground, well, a man can change his mind.

What does worry me - and I know it worries quite a number of other Australians - is that no matter what this man’s record is, if we say we will not allow him into Australia and do not give the reasons although he has asked for those reasons to be given, we could be doing him an injustice. I am not suggesting for one moment that we are doing this man an injustice. If he was in the Stern gang, I would not have him in this country. But if we maintain there are other grounds and he says, “ All right, let me know what those other grounds are “, we should say what those other grounds are.

I do not say for one moment that any government of this country, irrespective of its political colour, has not the right to say that we will not have this man in the country because we do not like him. We have that right and I hope to God that we will always stick to it.

Mr CAIRNS:
Yarra

.Mr. Speaker-

Motion (by Mr. Adermann) agreed to.

That the question be now put.

Original question resolved in the affirmative.

House adjourned at 12.47 a.m. (Thursday)._

page 1971

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Bendigo Ordnance Factory

Mr Beaton:
BENDIGO, VICTORIA

n asked the Minister for Supply, upon notice -

  1. How many persons are at present employed at the Bendigo Ordnance Factory?
  2. How many persons were employed at this factory in the month of October in each of the years from 1956 to 1960, inclusive?
Mr Hulme:
Minister for Supply · PETRIE, QUEENSLAND · LP

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

  1. 712 persons.
  2. 1956 - 933 persons, 1957-858 persons, 1958- 797 persons, 1959-776 persons, 1960-698 persons.

Importation of Electric Incubators

Mr Ward:

d asked the Minister representing the Minister for Customs and Excise, upon notice -

  1. Was the approval given earlier this year for the importation under by-law of two large electric incubators made on the recommendation of departmental officers?
  2. If so, what officers dealt with the application and were they unanimous in their opinion that it should be approved?
Mr Osborne:
LP

– The Minister for Customs and Excise has furnished the following answer to the honorable member’s questions: -

  1. Yes.
  2. The approval was my personal decision based on the recommendation of my officers in the Department of Customs and Excise. The officers who dealt with the case were unanimous in thenopinion that it should be approved. As the Minister administering that department I take full responsibility for the decision given.

Cite as: Australia, House of Representatives, Debates, 11 October 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19611011_reps_23_hor33/>.

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