House of Representatives
17 August 1965

25th Parliament · 1st Session



Mr. SPEAKER (lion. Sir John McLeay) took the chair at 3.0 p.m., and read prayers.

page 3

GOVERNOR-GENERAL

Sir ROBERT MENZIES:
Prime Minister · KooyongPrime Minister · LP

Mr. Speaker, I inform the House that Her Majesty the Queen has been graciously pleased to approve the appointment of Lord Casey as GovernorGeneral of Australia.

I hope soon to be able to announce the date on which Lord Casey will be sworn in.

page 3

MINISTERIAL ARRANGEMENTS

Sir ROBERT MENZIES:
KooyongPrime Minister · LP

Mr. Speaker, I inform the House that my colleague, the Honorable C. E. Barnes, Minister for Territories, has been appointed a member of the Cabinet.

Mr. Barnes takes the post left vacant in the Cabinet following the appointment of the Honorable H. S. Roberton, formerly Minister for Social Services, as Australian Ambassador to Ireland.

page 3

PETITIONS

Roads

Mr. MORTIMER presented a petition from certain electors of the Division of Grey praying that the Commonwealth Government undertake to form and seal the Port Augusta to Woomera road between Wirrappa and Port Augusta to provide a reliable access road to Woomera and a better link for northbound traffic.

Petition received and read.

Aborigines

Mr. BRYANT presented a petition from certain citizens of the Commonwealth praying that the Government remove section 127, and the words discriminating against Aborigines in section 51, of the Commonwealth Constitution, by the holding of a referendum at an early date.

Petition received and read.

page 3

QUESTION

TRADE WITH NEW ZEALAND

Mr POLLARD:
LALOR, VICTORIA

– I ask the Minister for Trade and Industry a question. Will he give the House an assurance that the proposed trade agreement between Australia and New Zealand will not alter the existing tariff protection on Australian dairy products, fruit and vegetables, whether processed or otherwise?

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

– I propose, after question time, to ask for leave of the House to make a statement on the New Zealand-Australia trade agreement.

page 4

QUESTION

DIPLOMATIC SERVICE

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES

– My question is directed to the Minister for External Affairs. I ask: In view of the projected closer cooperation between the Governments of South Vietnam and Free China in resistance to aggression by our Communist enemies, has the Australian Government any plans to appoint an Australian representative in Taipei with status equivalent to that of the present representative of Free China in Canberra?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– The Australian Government has had diplomatic relations with China for some time, but up to date we have not completed the exchange by the appointment of an Australian representative in Taipei. The reasons for this are connected mainly with the difficulties of maintaining a rapidly expanding service and of staffing all the posts that we would like to staff. I can assure the honorable member and the House that our relations with China are close and friendly, and they are, I believe, harmonious. With the lack of permanent representation there, we have tried to arrange exchange visits as frequently as we could. We recently had the happiness and the great advantage of having the Chinese Foreign Minister with us in Canberra, and we had close and useful discussions with him. My colleague the Minister for Shipping and Transport recently led a very useful and successful parliamentary delegation to Taipei. I believe that the reception received by the members of that delegation and the discussions that they were able to hold have helped in some way to fill the gap.

page 4

QUESTION

TAX DEDUCTIONS

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

– I ask the Treasurer: Why are gifts to the Freedom from Hunger Campaign not allowed as tax deductions? As long ago as last April the Commissioner of Taxation explained that the legislative provision covering such gifts had expired on 30th June 1964 and that he had not so far been informed of any intention by the Government to extend the provision. Why was not the procedure applied to gifts to the Winston Churchill Memorial Trust applied in this case? The Commissioner of Taxation stated at the beginning

Mr SPEAKER (Hon Sir John McLeay:
BOOTHBY, SOUTH AUSTRALIA

– Order! The honorable member is now making his question too long.

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

– I ask: Did the Commissioner of Taxation state that gifts to the Winston Churchill Memorial Trust were not allowable deductions but that the Government had announced that it would make a change in the law? Why did the Government not do likewise for the Freedom from Hunger Campaign, which many people believe is entitled to this consideration?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– It is not easy to give an effective answer to this question in a few sentences, and I shall examine the practicability of later giving a much more detailed statement to the honorable gentleman and to others in the House who may be interested. As I recall the facts in relation to the Freedom from Hunger Campaign, the Government made donations to the first appeal deductible for tax purposes. In relation to a continuation of the appeal, however, we made it clear that the same position would not necessarily apply. I think honorable gentlemen should be aware that the Government, in the course of each year, receives literally scores of requests for donations contributed to worthy causes to be allowed as tax deductions. We have to decide whether, in this instance, there should be a departure from the general rule that donations, even to worthy causes, are not deductible. For example, we have not made donations to competing causes such as the Young Men’s Christian Association and organisations of that sort deductible for tax purposes.

I frequently am asked by those who conduct these very worthy organisations to see to it that we do not widen the field of deductibility because it puts them at such a comparative disadvantage in seeking funds from the Australian public for entirely worthy and charitable purposes inside this country. The general attitude that we have taken on the matter is that the Government, by making tax deductibility available, forgoes Commonwealth revenue to an extent which is quite indeterminate. Frequently this has the effect of providing a larger Commonwealth subvention to this cause than if the Commonwealth were making a direct grant So, in a variety of cases we have adopted that as a preferable alternative. In other cases, instead of making the donations deductible we make a grant, where we feel that the cause warrants that course of action. I have stated the matter quite briefly. I will supply the honorable gentleman with an amplified statement at a later date.

page 5

QUESTION

INTERNATIONAL AFFAIRS

Mr MACKINNON:
CORANGAMITE, VICTORIA

– I address a question to the Minister for External Affairs. In view of the attacks being made by the honorable member for Yarra and other left wing and ill informed critics on the Government’s policy-

Mr Calwell:

– I rise to order.

Mr SPEAKER:

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

Mr MACKINNON:

– I withdraw the reference to ill informed critics.

Mr Calwell:

– I ask the honorable member to withdraw the words “ left wing and ill informed critics “.

Mr MACKINNON:

– I withdraw the remark. In view of the attacks being made by the honorable member for Yarra on the Government’s policy in assisting the United States of America and the Government of South Vietnam against the terrorist military activities of the Vietcong and their North Vietnam allies, in which one of the main assertions, always difficult to prove or deny, is that Australia’s action is prejudicing the Australian image in the eyes of Asian people, can the Minister relate to the House the events which led up to the recent request from the Government of Cambodia, agreed to by the Republic of Vietnam, that Australia should represent Cambodia’s interests in Vietnam? Is not this request from Cambodia, a country not noticeably favourable to Western influences-

Mr SPEAKER:

– Order! The honorable member’s question is too long.

Mr MACKINNON:

– Is not this request A direct contradiction of the suggestion that Australia is hated-

Mr SPEAKER:

– Order! The honorable member will ask his question.

Mr MACKINNON:

– Do not the Minister and his departmental officers regard this as an indication of the confidence-

Mr SPEAKER:

– Order!

Mr MACKINNON:

– and respect which Australia’s firm and unselfish action has attracted?

Mr SPEAKER:

– Order! The honorable member will resume his seat. I call the Leader of the 0position

Mr CALWELL:

– I ask a question of the Prime Minister.

Mr Hasluck:

– I wish to answer the question asked by the honorable member for Corangamite.

Mr Calwell:

– I rise to order, Mr. Speaker. You ordered the honorable member to sit down.

Mr SPEAKER:

– That is correct.

Mr Calwell:

– Well, there can be no answer.

Mr SPEAKER:

– Order! I point out that the honorable member was asked to direct his question, but he continued on the same line. He was asked again, and he did not ask his question but ignored the Chair. I was compelled to ask him to resume his seat.

page 5

QUESTION

SOUTH VIETNAM

Mr CALWELL:

– I ask the Prime Minister a question. I have in my possession copies of the correspondence between the Prime Minister of New Zealand and a former Prime Minister of South Vietnam, Dr. Quat, relating to New Zealand’s assistance to South Vietnam. I assure the right honorable gentle* man that these papers were tabled in the New Zealand Parliament. The letters from Dr. Quat formally requested assistance from New Zealand. I ask the Prime Minister whether he received any correspondence of that sort from Dr. Quat or any other authority in South Vietnam. If he did, will he now table such correspondence in this House?

Sir ROBERT MENZIES:
LP

– I am not aware whether there is such a letter. The request to me came in the form of a communication from our ambassador following upon a conversation with the Prime Minister of South Vietnam in which the Prime Minister stated this desire and asked that it be conveyed to us. Whether it was subsequently dealt with in a paper I do not know; but I will find out.

Mr Devine:

– Which Prime Minister?

Sir ROBERT MENZIES:

Dr. Quat

page 6

QUESTION

INDONESIA

Mr KILLEN:
MORETON, QUEENSLAND

– My question, which is addressed to the Minister for External Affairs, concerns Indonesia. I refer to recent statements by Indonesian spokesmen that the Republic of Indonesia shortly will explode a nuclear device. I ask the Minister: What information has the Government on this matter? In view of the threatening nuclear potential, has the Government made any assessment recently of the relevance of a policy given over to a nuclear free zone in the southern hemisphere?

Mr HASLUCK:
LP

– Of course, we have seen the public statements by Indonesia professing an intention to explode a nuclear device. Our information is that Indonesia would not have it within her own capacity to develop such a nuclear device. So, if one were exploded in the near future it would have to be one supplied from some other country. We have no information that any other country intends to supply Indonesia with such a device. But, of course, we are watching the situation very carefully. I would only add that if Indonesia were to explode a device, either in the atmosphere or elsewhere, it would be in direct breach of the obligations that it has accepted under international treaties. We hope that Indonesia will not embark on this excursion, which could be of no profit to itself and which would only increase the dangers in this region.

In reply to the further question that the honorable member asked, I point out that this Government has always adopted the view that there is unreality in the suggestion for a nuclear free zone south of the equator. The equator is a very thin, imaginary line. To declare a nuclear free zone on one side of the equator and not on the other side of it would put at a considerable disadvantage the countries that are friendly to us and would put at a considerable advantage the countries about which we have reason to be doubtful. We believe that the real problem is one of general nuclear disarmament, not one of declaring particular zones.

page 6

AUSTRALIAN ECONOMY

Mr. PETERS__ I ask the Prime Minister whether it is true that the only copy of the Vernon Committee’s report on the Australian economy that was in the hands of the Government was entrusted to the Treasurer and that he lost it at Bingil Bay. If that is not true, will the Prime Minister allow me to have a look at the copy of the report which was presented to him some months ago and which cost about £100,000 of the money of the people of Australia?

Sir ROBERT MENZIES:
LP

– I must congratulate my friend on the lively imagination with which he has come back to the House. This is a rather picturesque idea: One copy; I do not even see it; the Treasurer gets it. Of course, all of this is purely fanciful. The whole report has been under consideration by the Cabinet. Our consideration of it has not yet concluded because, as I will not need to tell the honorable member, this is a report which not only is of great length, covering an immense variety of topics, but also, in some aspects, is very complicated and even technical. Under those circumstances, we propose to have our own minds cleared about what it involves, and then we will promptly table it and expose it to general discussion. The honorable member would be the first one, I would hope, to realise that to throw an amorphous mass of documents on the table of the House without the faintest guidance or explanation by the Government, which is responsible for setting up the Committee, would be ludicrous and would lead to nothing but confusion. However, in case he is concerned about this, I want to tell him that when we do table this report we will take the opportunity at that time of making some statement on it and we will provide an ample opportunity to honorable members, when they have had a chance of studying the report, to have such debate on it as they desire.

page 7

QUESTION

MURRAY VALLEY DEVELOPMENT

Mr TURNBULL:
MALLEE, VICTORIA

– Does the Minister for National Development recall that on a recent tour of the Murray Valley he was asked to consider submitting a plan to the Government for the setting up of a Murray Valley authority such as that operating in the Tennessee Valley in the United States of America? Has he considered this proposition and, if so, with what result?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– 1 can recall the recent tour that 1 undertook with the honorable member for Mallee and that at Swan Hill the proposition he mentions was put to me. I put forward some of my own views at the meeting, but I would suggest to him that if such an organisation is to be set up it should be a matter for the States of New South Wales and Victoria, and that the approach should come originally from these States and not from the Commonwealth.

page 7

QUESTION

AUSTRALIAN ECONOMY

Mr CALWELL:

– I ask the Prime Minister a question supplementary to that asked by my honorable and inquisitive friend, the honorable member for Scullin. Can the Prime Minister assure the House that the Vernon Committee report will be tabled before the debate on the Budget resumes next week? If not, will he give us a precis of what the Vernon Committee has recommended to the Government? Honorable members, if I might so interpolate, are handicapped in the discussion of Budget papers because relevant documents like Tariff Board reports, this report and other reports are usually tabled when the debate is over. In order that honorable members might have all the available information that the Government can provide, will the Prime Minister do something to assist the House before the Budget debate resumes next week?

Sir ROBERT MENZIES:
LP

– I can assure the honorable gentleman that we gave some thought to this matter, appreciating the point he makes, but I cannot indicate that we will be in a position to table the report, with whatever accompanying documents we desire to table with it, before the resumption of the debate on the Budget.

Mr Beaton:

– Will we get it this year?

Sir ROBERT MENZIES:

– The honorable member certainly will. It will be a disappointment to him. It will give him long Christmas reading during the quiet nights at Bendigo. He will be able to devote weeks and weeks to reading this document, as I have myself, for better or for worse. I can assure the honorable member that, although I cannot give an affirmative answer to the question, after the report is tabled - and I am sure he and his colleagues will wish to have some little time to study it, because it is a lengthy document - I will then arrange to have a debate so that all honorable members, if they desire, can say what they want to say about it.

page 7

QUESTION

INTERNATIONAL AFFAIRS

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– Will the Minister for External Affairs provide the House with the vital information, with reference to the request from Cambodia, sought by the honorable member for Corangamite in his question earlier today?

Mr HASLUCK:
LP

– The Australian Government has been in close and friendly relationship with Cambodia for quite a number of years. Cambodia is a strictly neutralist country, but this has not prevented the development of close links between Australia and Cambodia. We believe there is real friendship between the two countries. When Cambodia saw fit to ask the Americans to withdraw their legation the Americans requested us to represent their interests. The Cambodian Government acceded to that request. Accordingly we represent the United States of America in Cambodia - to the satisfaction, we believe, of both the Cambodian Government and the United States Government. When diplomatic relations were broken off between South Vietnam and France, representing Cambodia’s interests, Cambodia asked us to represent its interests in South Vietnam through our embassy in Saigon. We were very happy to accede to that request. I think there can be no greater expression of the confidence that one country has for another than to be asked to represent its interests in another capital, as Cambodia has done. We believe that this action expresses a real confidence in us and a confidence in the type of Australians who represent this country in posts abroad.

I should like to add that another neutralist country in Asia - Burma, which I was able to visit recently - has also shown the same outstanding marks of friendship and confidence in Australia as we have for Bunna. The respect gained for us by our representatives in Asia, which I am sure all honorable members who have visited these regions have seen, is a great encouragement, not merely to the Government, but to all Australians and is something that we may treasure as a tribute to our nation.

page 8

QUESTION

MIRAGE AIRCRAFT

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I ask the Minister for Air whether reports that the Mirage fighter is not equipped with radar are correct. If the reports are correct, why is this aircraft not equipped with radar and when will it be so equipped?

Mr HOWSON:
Minister for Air · FAWKNER, VICTORIA · LP

– I assure the honorable member that the Mirage is equipped with radar.

page 8

QUESTION

PAPUA AND NEW GUINEA

Mr DRURY:
RYAN, QUEENSLAND

– I ask the Minister for Territories a question. I refer to a reported statement by a police authority in Papua and New Guinea about alleged subversive activities in the Territory. Is the Administration of the Territory taking all practical steps to warn and protect the local population against such subversion?

Mr BARNES:
Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I am aware of a Press report about alleged subversion in the Territory. All I can do is refer the honorable member to the report of the United Nations Trusteeship Council mission. If I recall correctly, the mission reported that relations between the people of the Territory and the Government were distinguished by confidence and goodwill. I think that is a satisfactory answer to the honorable gentlemen’s question. There may be small pockets of people who do not see eye to eye with the Administration, but you will have that in every community. The important thing is that the great majority of the people have confidence in the Government of Australia.

page 8

QUESTION

TAXATION

Mr GRAY:
CAPRICORNIA, QUEENSLAND

– Will the Treasurer grant to officers serving in school cadet corps, who are mostly school teachers, the same rights and concessions with regard to their military pay and income tax as have been granted to officers of the Citizen Military Forces?

Mr HAROLD HOLT:
LP

– I will be glad to discuss this matter with my colleague, the Minister for the Army, and go into the practicability of the request that has been made.

page 8

QUESTION

TRADE

Mr NIXON:
GIPPSLAND, VICTORIA

– I ask the Minister for Trade and Industry a question. I refer to industries in Singapore which have Australian interests and which were designed to meet the total market of 10 million people in Malaysia. Will the Minister inform the House of the future trading prospects for these industries, with particular reference to the prospects of the company known as Malaysian Dairies?

Mr McEWEN:
CP

– I can inform the honorable member of the position only up to a point. The suggested formation of a common market between the two territories has not progressed sufficiently for the new situation to make any measurable difference to trade. Conditions of access for a few commodities have been changed, but the long term position will depend upon the nature of any arrangement between Singapore and Malaysia for access to each other’s markets. Some suggestion has already been made that some form of common market may still be sought by the two countries. In the Singapore market, some additional protection has been afforded to Malaysian Dairies, the company established in Singapore, but no change has been made in the conditions of access to the Malaysian market. The Government, of course, is closely following developments in the commercial field in this area.

page 8

QUESTION

NATIONAL SERVICE TRAINEES

Mr BARNARD:
BASS, TASMANIA

– I desire to ask the Minister for the Army a question concerning Australian troops in South Vietnam. Was the Minister correctly reported when he stated recently that national service trainees would be serving in this area within a period of twelve months? If this is the Government’s intention, does the Minister consider that this policy will be in the best interests of all concerned, especially the national service trainees who would be obliged to serve In this area after only a relatively short period of service in Australia and who would also be obliged to serve with volunteer troops who in some instances would regard the national service trainees as merely conscripts?

Dr FORBES:
Minister Assisting the Treasurer · BARKER, SOUTH AUSTRALIA · LP

– The answer to the first part of the honorable gentleman’s question is that I was not correctly reported. The statement that national service trainees would be serving in South Vietnam within 12 months was a deduction from an answer I gave to a question. I was asked whether national servicemen would be sent to South Vietnam. I replied that if the Government still had a commitment of the present order in that country when national servicemen had been fully trained and posted to regular units, and if the units were sent to South Vietnam the national servicemen would go with them in the same way as long term regular soldiers. In answer to the last part of the honorable gentleman’s question, I inform him that the Government and the Army attach great importance to the fact that national servicemen in the Army will in all respects be indistinguishable from their Regular Army colleagues. Their conditions of service, except for duration of service, are exactly the same. For this reason and also because of the careful planning and the attitude of the Army authorities, I do not believe that any of the difficulties predicated by the honorable gentleman will appear between national servicemen and normal Regular Army servicemen.

page 9

QUESTION

DROUGHT IN AUSTRALIA

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

– I address a question to the Minister for Primary Industry. Is he aware that the present drought in northern New South Wales and southern Queensland, which may be expected to cost this country some hundreds of millions of pounds in lost export sales, has revealed a need for close and permanent liaison on drought problems between the States and the Commonwealth? Will he consider constituting a permanent advisory council to co-ordinate all plans for countering the threat of droughts in the future?

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

– I am aware of the disastrous effects of the drought in parts of Queensland and northern New South Wales. I understand that the party committee of which the honorable member is chairman has recommended that liaison be created by a drought advisory committee. I assure the honorable member that this and other requests from the Governments of Queensland and New South Wales are being considered by the Government, which no doubt will come to a decision in the near future.

page 9

QUESTION

MALAYSIA

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– Can the Minister for External Affairs confirm whether the Prime Minister of Malaysia has ordered the Royal Malaysian Navy to fire on any Indonesian ships in Singapore waters? Will the honorable gentleman clarify the position in view of the fact that the Australian Government has recognised the independence of Singapore and has loaned a Royal Australian Navy officer to take operational command of the Malaysian Navy?

Mr HASLUCK:
LP

– Up to date I have only seen that statement reported in the newspapers. It may have reached us in official reports, but I have not seen it in an official form yet. I should draw the honorable member’s attention to the fact that the agreement for separation between Malaysia and Singapore included provision for defence arrangements and joint defence machinery. Until discussions on that machinery and those arrangements have been brought to conclusion between the Prime Minister of Malaysia and the Prime Minister of Singapore, I think it would be premature for any of us to pass judgment on what is proper to be done by either Malaysia or Singapore.

page 9

QUESTION

CIVIL AVIATION

Mr KILLEN:

– Can the AttorneyGeneral say on what date the regulation giving the Minister for Civil Aviation power to issue licences to import aircraft was made? Under the hand of which Minister was the regulation initiated, and where were the first off copies of the regulation printed?

Mr SNEDDEN:
Attorney-General · BRUCE, VICTORIA · LP

– The date on which the regulation was made, according to my recollection - which I think is correct - was Thursday, 1st July. As to the Minister by whom it was initiated, I am not quite sure what the honorable gentleman means, but it was a regulation issued under the prohibited imports regulations which come within the ministerial .responsibility of the Minister for Customs and Excise, a senator in another place. The regulation was printed at the Government Printing Office in Canberra. On the day that copies were printed they were made available for sale al the Government Printing Office in Canberra. I understand that they were available for sale at all Commonwealth sub-treasuries - again I speak from recollection, although I think this is accurate - on Monday, 5th July.

page 10

QUESTION

POULTRY INDUSTRY

Mr COLLARD:
KALGOORLIE, WESTERN AUSTRALIA

– I direct a question to the Minister for Primary Industry, Is it correct that earlier this month the Minister gave an undertaking to certain Federal and State members, and representatives of the poultry industry in Queensland, that he would have an examination made of egg production costs in the north of Queensland and compare them with production costs in Brisbane and the southern part of the State? If so, and if production costs are proved to be higher in outer areas of Queensland than in the metropolitan area, is it intended that arrangements will be made whereby producers in the outer areas will in some way be relieved of the whole, or part, of the cost of the levy charges recently imposed by the Poultry Industry Levy Act? Finally, if such is the case will the Minister arrange for a similar investigation, for a similar purpose, to be carried out in Western Australia?

Mr ADERMANN:
CP

– During the parliamentary recess I called a conference in Brisbane at which representatives of the egg industry in northern Queensland met with the Chairman of the Council of Egg Marketing Authorities and the Chairman of the Queensland Egg Marketing Board. Other representatives of the industry were present. As a result of that conference the Chairman of C.E.M.A.- the Council of Egg Marketing Authorities - and the Chairman of the South Queensland Egg Marketing Board agreed to look at the economics of the northern poultry producers with a view to making a recommendation to me on that matter. There has been no assurance given, other than a promise to investigate the economics of the industry there. The question of that section of the producers coming under the jurisdiction of the Queensland Egg Board was also discussed, but no con clusion was arrived at. I do not mind looking at the position in the north of Western Australia of those who are placed similarly to those who are engaged in the industry in Queensland. I shall refer the question to the Chairman of the C.E.M.A. who has jurisdiction to act on these matters.

page 10

QUESTION

PARLIAMENTARY SQUASH COURT

Mr MACKINNON:

– 1 ask you, Mr. Speaker, whether you are in a position to confirm the reports that an official opening of the new parliamentary squash court is being arranged and that the honorable member for the Australian Capital Territory will perform the opening ceremony and give the project his blessing. If these reports are unfounded, would you consider arranging something along those lines?

Mr SPEAKER:

– r have no knowledge of the ceremony.

page 10

QUESTION

INDONESIA

Dr J F Cairns:
YARRA, VICTORIA · ALP

– 1 ask the Minister for External Affairs whether it is a fact that an interview took place on, I think, 16th July 1965, between the Ambassador for the Republic of Indonesia and the Secretary of his Department in which the Ambassador was given an assurance that a state of war does not exist between the two countries. If such a thing did happen, will the Minister say why it was necessary to give such an assurance to the Ambassador?

Mr HASLUCK:
LP

– I am not in a position to say whether or not the Ambassador for Indonesia called on the head of my Department on the day mentioned by the honorable member. On this question of whether or not a state of war exists, the indisputable fact is that operations which are the same sort of operations as those which are carried on when people are at war have been carried on by Australian troops and Indonesian troops facing each other.

page 10

QUESTION

SOCIAL SERVICES

Mr KILLEN:

– I address a question to the Minister for Social Services concerning deserted wives. Can the Minister say whether any progress has been made towards shortening the length of time which deserted wives must wait before they receive a widow’s pension? In view of the terrible anxiety and hardship faced by these women, will the Minister give the House an assurance that he will, consistent with due regard to public moneys, strive to cut the waiting time to an absolute minimum?

Mr SINCLAIR:
Minister for Social Services · NEW ENGLAND, NEW SOUTH WALES · CP

– As the honorable member is aware, the Government has considered, from time to time, the relative position of females in this category in the community and, as far as possible, has endeavoured to put them in the same position as women who are, in fact, widows. As to the particular delay between the desertion and the recognition of a deserted wife as such and the payment of benefit to her, this is not a matter to be determined by me at question time. It has been considered by the Government from time to time, and no doubt will be considered again in the future.

page 11

QUESTION

ARBITRATION

Mr WEBB:
STIRLING, WESTERN AUSTRALIA

– I address a question to the Minister for Labour and National Service. In his statement refusing to grant the claim by the Australian Council of Trade Unions for a review of the recent basic wage decision, did the President of the Commonwealth Conciliation and Arbitration Commission use the words, inter alia: “… judgment of the majority which I have been able to read since the date of the delivery **? Does this not mean that he was not able to see the majority judgment until it was delivered? Is it not a radical departure from precedent when three members of the Bench can deliver a judgment without reconciling the views of the other judges, one of whom is the President? Does the Minister not consider that the workers’ faith in arbitration is being further weakened by such methods which are the very negation of justice?

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

– The President of the Commission, in the judgment which has just been referred to by the honorable member, did comment that the three judges who comprised the majority had not shown their judgment to him prior to the date on which it was delivered. There has been a great deal of comment about this, but I do not think it is my prerogative, nor do I think it would be correct for me, as Minister for Labour and National Service, to comment at all on the methods by which the Commonwealth Conciliation and Arbitration Commission conducts its hearings or delivers its judgments. I am prepared to state that if honorable members wish to make any comments about this matter, they are entitled to do so.

page 11

ELECTORAL

The Clerk:

– I present a copy of the petition and a copy of the order of the High Court, sitting as the Court of Disputed Returns, in the matter of Sarina versus Ormonde and others heard on 15th July 1965.

page 11

NEW ZEALAND-AUSTRALIA FREE TRADE AGREEMENT

Ministerial Statement

Mr McEWEN:
Minister for Trade and Industry · Murray · CP

– by leave - The agreement reached on the formation of a free trade area between Australia and New Zealand, following the negotiations between Mr. Marshall, the New Zealand Minister of Overseas Trade, and myself, has now been confirmed by our respective Governments.

A free trade area has a technical connotation. It is an arrangement between two or more countries which provides for the goods included in it to be traded free of duty between them, but allowing each country to maintain separate tariffs on imports from countries outside the arrangement. It is different from a customs union which requires the members to introduce a common external tariff against imports from other countries. Under the present arrangement Australia and New Zealand will each maintain separate tariffs against imports from third countries.

The General Agreement on Tariffs and Trade requires that, when two countries enter into a free trade agreement, substantially all the trade between the two countries should be subject to the free trade provisions. This indicates that some areas of trade can be excepted. There are no precise rules to indicate the dimensions of the trade which must be included, and there is no strict rule governing the period over which substantially all of the trade must be brought into the free trade agreement.

The arrangement reached between our two Governments has taken these considerations into account. Our agreement includes items covering some 60 per cent, of the total trade between our two countries - not 60 per cent, of the trade of each country, but approximately 60 per cent, of total trade between the two countries.

The bulk of the items to be included initially in this 60 per cent, of the trade between the two countries are those already traded on a duty free basis. The balance of - the items are at present dutiable - that is, the balance of the items which are initially put in the free trade section. It has been agreed that, where duties are very low - and some are 5 per cent. - they will be removed immediately. In other cases they will be reduced to free over eight years. In certain cases it may be agreed to extend the period beyond eight years. lt has been recognised by both Governments that there are some items which may not be included in the duty free list. Where serious harm or serious unemployment would result from competition by the other country the items concerned will never be traded duty free. The items of trade which have not been included at the outset will come under periodic examination by both countries for decision as to whether, or when, they should be moved into the duty free section which, under the agreement will be known as Schedule A. Where items of trade included in Schedule A are not being produced by one of the countries, that country may, at a later date when production commences, temporarily withdraw an item from the schedule and introduce protective duties. Where the establishment of an industry is essential for economic development an item may be withdrawn permanently from Schedule A.

The greatest single generic item of trade between the two countries - forest products, ranging from timber and paper pulp to paper - will be predominantly duty free when the proposed agreement comes into operation at the beginning of next year. Only a limited range of paper products will remain dutiable.

New Zealand is the biggest customer for our manufacturing industries. The agreement will sustain and over the years develop that position, while not depriving New Zealand of the right or opportunity to establish further manufacturing industries. New Zealand is, of course, predominantly an exporter of primary products. Australia will accept certain of her primary products duty free. In some cases a limit has been set on the quantity to be imported duty free from New Zealand, but in no case at a level which would result in measurable harm to the Australian industry concerned. Provision has been made for the phasing out of duties over as long a period as eight years so that no sharp consequences may result. Before the list of products to be included was finalised the circumstances of the industries concerned were investigated and confidential discussions were held with people who could advise the Government on the competitive position of the industries in Aus.tralia. and in New Zealand.

Items in Schedule A of importance to New Zealand export industries include frozen peas and beans, dried vegetables, cheese, lamb, pig meats, timber and paper products.

The present duties on these items will be phased out over a period of up to eight years - nine years in the case of frozen peas and beans - after the agreement enters into force. In regard to cheese and certain pig meats there is also provision limiting the quantities to be subject to the duty free arrangement. Duty free imports in the first year will include 3,000 tons of pork. Imports of pork amounted to 2,600 tons in a recent year without dislocation. In the case of cheddar cheese, imports, which have amounted to about 200 tons in recent years, will be 400 tons in the first year and will rise in five years to the ultimate ceiling of 1,000 tons. Special arrangements have been made in respect of the items mentioned above to ensure that New Zealand’s quantitative import restrictions will not prevent Australian producers from having an equivalent opportunity to compete in the New Zealand market within their range of production.

I will now describe in more precise terms the provisions in the agreement which will govern the whole character of the new trading relationship between our two countries. The existing Trade Agreement between Australia and New Zealand, which has been in operation since 1933, will form part of the free trade agreement except as superseded or modified by it. This means that the contractual rights we both enjoy under the present Agreement have been maintained.

As already indicated provision is made for the regular review of trade in goods not listed in Schedule A with a view to the inclusion of additional items. The objective of these reviews would be the progressive addition of goods to the Schedule except where their inclusion would be seriously detrimental to an industry in either country or contrary to the national interest. The first of these reviews will take place within two years of the entry into force of the agreement. There are a number of provisions designed to ensure that there will be fair and equitable trading conditions between the two countries in the commodities included. Particular situations in which action might have to be taken by one of the parties to prevent unfair trading have been identified and provisions drafted to deal with them. Where goods are being dumped or are in receipt of a subsidy from the exporting country, provisions allow the importing country to take necessary action to safeguard any affected domestic industry.

There will be an article dealing with deflection of trade which might arise if producers of one country had access to raw materials or machinery at significantly lower prices than producers in the other country. This article will permit the second country, following consultations, to take corrective action to protect its affected producers. Either country, following a consultative procedure, may suspend temporarily its obligations in respect of products which are being imported in such increased quantities and under such conditions as to cause or threaten serious injury to its producers. Rules of origin which determine whether goods included in Schedule A will qualify for reduced duties in terms of the agreement are the same initially as those provided under the existing Trade Agreement. It is proposed, however, that the rules should be reviewed within two years.

The agreement will provide that one country shall not maintain quantitative import restrictions on imports from the other unless it is at the same time applying such restrictions to imports of a third country. Australia undertook not to impose quantitative import restrictions, introduced for balance of payments reasons, on imports from New Zealand. Because of its continuing and serious balance of payments position, New Zealand was not able to give a similar undertaking, but has indicated that it will provide for special arrangements in respect of some imports from Australia. Quantitative import restrictions will be removed on certain products from Australia including timber plywood and veneers from the date of entry into force of the agreement.

The care taken in the selection of items, the quantity limitations prescribed in certain cases and the arrangements to phase out existing duties over a number of years, together with the safeguard provisions to prevent any serious dislocation of trade should ensure there will be an avoidance of serious injury to existing industry in the two countries. In selecting commodities which at the outset would be included in the arrangement particular attention was also given to the interests of third countries. There should be no disruption to the trade of our other trading partners. G.A.T.T. provides for free trade arrangements between members and that organisation will be advised of the details of the agreement as soon as practicable.

It has also been agreed to set up a consultative committee on forestry products comprising representatives of the two countries. This committee would meet, as necessary, and would advise the two Governments on the steps necessary to develop and co-ordinate all phases of the industry in the two countries to achieve the best use of their forest resources.

New Zealand has undertaken, where import duties levied on goods from Australia are higher than the lowest rate applicable to goods imported under the same tariff item from any third country, to eliminate the difference in the rates at the earliest practicable date. Australia has already eliminated any similar differences which had existed in the Australian tariff.

Special reference should be made to the understanding reached in regard to raw sugar. Raw sugar is not listed in Schedule A but is nevertheless included in the scope of the agreement on the basis that the existing import duties shall be phased out in accordance with the provisions of the agreement but that the non-tariff measures at present in force shall continue. New Zealand, of course, is not a producer of sugar; nor is she likely to be in the foreseeable future.

The agreement will continue for ten years. After that it will remain in force but be subject to termination with 180 days’ notice. Time has not yet permitted the agreement reached between the two Governments to be translated into a formal document. It is still necessary to finalise the legal drafting of the articles of the agreement and to ensure that the commodities in Schedule A are denned accurately in terms of the tariff classifications of both countries. The agreement will then be printed. When this is done, it will be signed. These processes will be completed with a minimum of delay and I would expect that the Agreement will be printed and ready for signature within a few weeks. The agreement, in its final form, will be not only a legal document but also a highly technical one. It probably will not use the term “ pork “, for example, but will refer to “ tariff item so-and-so “. To the uninitiated, this will perhaps be less comprehensible than the lay description. At the earliest opportunity after signature, I shall arrange for the relevant documents to be tabled in this House. The conclusion of this free trade arrangement represents the culmination of intensive activity by both Governments extending over some two years. It constitutes an historic landmark in the development of trade relations between Australia and New Zealand. Although its immediate results in new trade will not be spectacular, the free trade arrangement is expected to have far reaching long term effects on the welfare, development, and growth of the two countries.

I present the following paper -

New Zealand - Australia Free Trade Agreement - Ministerial Statement, 17th August, 1965- and move -

That the House take note of the paper.

Debate (on motion by Dr. J. F. Cairns) adjourned.

page 14

BILLS RETURNED FROM THE SENATE

The following Bills were returned from the Senate without amendment -

Commonwealth Electoral Bill 1965 Referendum (Constitution Alteration; BUI 1965.

page 14

ASSENT TO BULLS

Assent to the following Bills reported-

Appropriation Bill (No. 3) 1964-65. Appropriation (Special Expenditure) Bill (No

  1. 1964-65.

Supply Bill (No. 1) 1965-66. Supply Bill (No. 2) 1965-66. Poultry Industry Levy Bill 1965. Poultry Industry Levy Collection Bill 1965. Poultry Industry Assistance Bill 1965. Conciliation and Arbitration Bill 1965. Western Australia (South-West Region Water

Supplies) Agreement Bill 1965. International Monetary Agreements Bill 1965. Defence Forces Retirement Benefits Bill 1965. Cellulose Acetate Flake Bounty Bill 1965. States Grants (Petroleum Products) Bill 1965. Customs Tariff Bill 1965. Customs Bill 1965

Sales Tax (Exemptions and Classifications)

Bill 1965. Customs Tariff Validation Bill 1965. Estate Duty Assessment Bill 1965. Income Tax and Social Services Contribution

Assessment Bill 1965. Gold Mining Industry Assistance Bill 1965. Parliamentary Retiring Allowances Bill 1965. Sulphuric Acid Bounty Bill 1965. Pyrites Bounty Bill 1965. Broadcasting and Television Bill 1965. States Grants (Science Laboratories) Bill

Universities (Financial Assistance) Bill 1965. States Grants (Technical Training) Bill 1965. Butter Fat Levy Bill 1965. Dairy Produce Export Control Bill 1965. Dairy Produce Research and Sales Promotion Bill 1965

Dairy Produce Export Charge Repeal Bill 1965

Dairy Produce Levy Repeal Bill 1965. Processed Milk Products Bounty Bill 1965. Commonwealth Electoral Bill 1965. Referendum (Constitution Alteration) Bill 1965

Air Force Bill 1965

Defence Bill 1965

National Service Bill 1965

Naval Defence Bill 1965

Defence (Re-establishment) Bill 1965.

page 14

PRESENTATION OF PRESIDENTS CHAIR TO THE SENATE OF MALAYSIA

Mr SPEAKER:

– I have to inform the House that I have received a copy of the resolution passed by the Senate of Malaysia on the occasion of the presentation of a President’s Chair by the Commonwealth Parliament. The resolution is as follows-

That this Senate accepts with thanks and appreciation the gift of the President’s Chair from the Parliament of the Commonwealth of Australia as a token of friendship and goodwill on the part of the Parliament and people of Australia towards the Senate and people of Malaysia.

page 15

WHEAT TAX BILL 1965

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

Second Reading

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to increase the rate of tax on wheat delivered to the Australian Wheat Board from one fourth of a penny to three tenths of a penny per bushel, an increase amounting to one twentieth of a penny per bushel. The what tax collections are used to finance wheat research in Australia and are paid into the Wheat Research Trust Account established under the Wheat Research Act 1957. When the rate of tax was agreed upon in 1957 and incorporated in the Wheat Tax Act of that year, the rate of one fourth of a penny per bushel was fixed in the light of the views of wheatgrowers as expressed through the Australian Wheatgrowers Federation and in consideration of the funds necessary for the research programme that was then envisaged.

The Wheat Research Act 1957 provided for the setting up of a Wheat Industry Research Committee in each of the five mainland States and a central Wheat Industry Research Council. Moneys raised by the wheat tax on wheat delivered to the Australian Wheat Board in each of the mainland States are available for expenditure on research programmes approved by each State Wheat Industry Research Committee. On the other hand, the Commonwealth contributes up to £ for £ with wheat tax collections to the wheat research programme through an annual appropriation, the amount being determined annually in the light of the needs of the research programme and in relation to funds available. The Commonwealth contributions are used to meet expenditure on research programmes submitted by the Wheat Industry Research Council for my approval.

The wheat research programme throughout Australia is directed to studies in the following broad categories -

Soils. Soil nitrogen, fertility, organic matter, microbiology, tillage and moisture conservation.

Plant physiology. Research in relation to environment in the different regions of the wheat belt.

Plant breeding. Breeding of wheat to improve yield, quality and resistance to disease. Breeding of pasture grasses and legumes for wheat belt soils and environments.

Wheat quality. Basic studies of those components of grain which influence wheat quality.

Wheat diseases. Wheat rust, root rotting organisms, virus diseases, &c.

Wheat storage. Insect pests of stored grain and problems of temperature and moisture control.

Noxious weeds. Skeleton weed, yellow burr weed and others.

Mechanisation. Tillage equipment, harvesting machinery, &c.

Assistance has also been provided for the training of research workers by the provision of studentships at the undergraduate and postgraduate levels at Australian universities.

Although income from the wheat tax has increased considerably over the years since 1957 as a result of the expansion in wheat growing, the costs of research have also risen substantially with the result that additional income is needed if the research programmes considered necessary by the State Committees and by the Wheat Industry Research Council are to be carried out. The proposal to increase the rate of wheat tax to provide additional funds for research was made at the last annual conference of the Australian Wheatgrowers Federation in April 1965 and is an indication of the recognition by wheat growers throughout Australia of the value of the wheat research programme. Whilst considering the need for additional funds for the research programme, the Federation also had in mind the approaching change to decimal currency, and the rate of tax now proposed of threetenths of a penny per bushel is exactly equivalent to one-quarter of a cent per bushel.

This Bill has the worthy objective of assisting in additional research and extension for the benefit of one of our major primary industries. As I have already stated, the proposal to increase the rate of tax has the approval of the Australian Wheatgrowers Federation, which represents wheat growers throughout Australia. I commend the Bill to the House.

Debate (on motion by Mr. Pollard) adjourned.

page 16

LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1965

Bill - by leave - presented by Mr. Adermann, and read a first time.

Second Reading

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– I move - That the Bill be now read a second time.

This Bill provides for the raising of loan moneys amounting to £3,800,000 for war service land settlement in the States of Western Australia, South Australia and Tasmania during the 1965-66 financial year. As provided for in the States Grants (War Service Land Settlement) Act of 1952-53, the Commonwealth advances all the capital moneys required for the scheme in those three States. It is anticipated that the money will be made available in the following amounts - Western Australia, £1,716,000; South Australia, £1,200,000; Tasmania, £884,000. The amount of £3,800,000 is the gross amount required for grants under the abovementioned Act. Payments during the current financial year by settlers under the scheme are estimated to amount to £4,295,000 of which £3,290,000 will be repayment of advances made to settlers. These moneys are paid to the credit of the Consolidated Revenue Fund.

In Western Australia it is expected that minor developmental expenditure will complete that phase of the scheme. Most of the money is required to make advances to settlers for working capital, and for purchasing stock and plant including replacements. As honorable members are aware, the scheme provides for the fact that most settlers are not in a position to introduce private capital and therefore borrow their full financial requirements. In time, as the settlers reach financial solvency, they are able to discharge some of their liabilities resulting in release of some security documents. With this security of offer, they may then operate through those institutions which usually provide rural credit.

In South Australia development is moving towards finalisation and it is expected that work on Kangaroo Island should be completed mainly during this financial year. There is also further work estimated at about £100,000 to be carried out this year on the Loxton irrigation area, mainly in connection with drainage and replacement of some irrigation channels with pipelines. However, out of the £1,200,000 provided for South Australia, £1,020,000 is required for advances to settlers. The average advance per settler will not be as high as in Western Australia since, in South Australia, many settlers are able to use cooperative societies, stock firms, etc., to finance their requirements. In Tasmania some areas on King and Flinders Islands and at Togari - previously known as Montagu Swamp - are still under development but it is hoped that this can be completed within the next two years. For some years, it will be necessary for the Commonwealth to provide annually for moneys required to make credit facilities available to settlers, but it is gratifying to note that the end is in sight for the developmental phases of the scheme. I commend the Bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 16

LOAN (HOUSING) BILL 1965

Bill - by leave - presented by Mr. Bury, and read a first time.

Second Reading

Mr BURY:
Minister for Housing · Wentworth · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to authorise the borrowing of £51 million to be advanced by the Commonwealth to the States for housing. 77 is money will be used to construct homes for families of low or moderate means and to provide finance for loans to those wishing to buy privately built homes. The advances made by the Commonwealth at a concessional rate of interest will permit the States to build and lease cottages and flats at very favourable rentals, and enable many to buy or build their own homes with the assistance of a long-term loan at a relatively low rate of interest.

This £51 million is the amount requested by the States to be advanced to them this year under the Commonwealth and State

Housing Agreement In accordance with their wishes it will be allocated as follows -

The amount requested by the States for which parliamentary approval is now sought is some £350,000 less than the amount requested and approved in 1964-65. However, this does not necessarily mean that the States will spend less on housing in 1965-66 than in the past financial year. Other sources of funds are available to, and used by. them for housing purposes.

The advances will be made under the authority of the Housing Agreement Act 1961; l hey are repayable over 53 years and bear interest at 1 per cent, per annum below the long term bond rate. At least 30 per cent, of the amount advanced to each State must be allocated by the State to what is called the Home Builders’ Account. Advances are then made from this Account to building societies and other approved institutions who, in turn, make loans to individuals wishing to buy or build a home. During the four years since the Agreement was last renegotiated, the Commonwealth has advanced some £200 million to the States for housing purposes. Of this amount more than £132 million was allocated to State housing authorities who used it to construct some 41,000 dwellings. The remainder, or some £68 million, was advanced to home seekers through the Home Builders’ Account. Funds in the Account were used to make loans to some 27,000 individuals who acquired their own homes.

Of the amount advanced to each State housing authority, up to 5 per cent., or such larger sum as may be agreed, must be used, if the Commonwealth so requests, for the construction of dwellings for serving members of the forces. Under this arrangement the Commonwealth also makes available to the States for the housing of servicemen an amount at least equal to that allocated by the State for this purpose. During the past four years the Common wealth has so allocated a sura of close to £11 million.

It is expected that, of the total of £51 million to be advanced by the Commonwealth in the current financial year, some £33,650,000 will be allocated by the States to their housing authorities for dwelling construction and about £17,350,000 to Home Builders’ Accounts. Such an allocation to the Home Builders’ Accounts would be £250,000 less than in 1964-65. Nevertheless, the accumulation in these Accounts of net repayments should make it possible for lending from this source to building societies and other institutions to be maintained at not less than last year’s level.

The number of dwellings completed in Australia in 1964-65 was a record 112,500. This compared with 96,700 completions in the previous year. It is interesting to note that the rise in completions was largely in flats and home units. The number of houses completed rose from 81,100 to 84,400, but the number of flats and home units completed jumped from 15,600 to more than 28,000.

Over the 12 months to last December, the number of persons working on jobs carried out by builders of new houses and flats rose from 66.000 to 75,600. However, whilst employment in the building industry as a whole continued to rise in the March quarter of this year, there was a slight reduction in the numbers engaged in building homes.

Developments in the housing situation in Australia were recently examined at a conference of Commonwealth and State housing officers. They found that the industry was relatively fully occupied in all States, and that available labour especially the growing requirements of labour for non-residential building, rather than a scarcity of effective demand, was, in general, the main factor limiting the further expansion of home building.

During recent months there has been evidence of a slight decline in the number of new houses commenced, but the building of flats and home units has continued at a higher rate than in the corresponding period last year. In the coming months many of those wishing to build houses and flats may find they are competing increasingly for the available labour with those wishing to build shops, factories and offices and, in a few areas, with defence building.

The officers also made a close examination of the housing needs of those on the lower incomes, and especially of the persons whose needs are greatest. The information obtained from this conference will be of very great benefit to me and, I believe, to the State Ministers for Housing when we meet - I expect before the end of this year - to consider a new Commonwealth and State Housing Agreement to extend or replace the existing Agreement which expires in June next. I commend the Bill to honorable members.

Debate (on motion by Mr. Whitlam) adjourned.

page 18

COMMONWEALTH ELECTORAL BILL (No. 2) 1965

Bill - by leave - presented by Mr. Anthony, and read a first time.

Second Reading

Mr ANTHONY:
Minister for the Interior · Richmond · CP

– I move -

That the Bill be now read a second time.

The Commonwealth Electoral Act was amended last session and in so doing section 91b was amended and restated in a form which altered the numbering of the subsections. That amendment necessitates a consequential amendment to paragraph (b) of sub-section (2.) of section 85. Under the provisions of this Bill, the reference in section 85 (2.) (b) to section 91b (1.) (b) is amended to refer to section 91b (a.). 1 commend the Bill to honorable members.

Debate (on motion by Mr. Whitlam) adjourned.

page 18

BANKRUPTCY BILL 1965

Second Reading

Debate resumed from 20th May (vide page 1723), on motion by Mr. Snedden -

That the Bill be now read a second time.

Mr WHITLAM:
Werriwa

.- The Governor-General, in his Speech on 4th August 1954, made the following statement -

My Government will continue its programme of reviewing and bringing up to date the law of the Commonwealth on industrial property and other matters affecting industry and commerce. In particular, it is reviewing the laws relating to trade marks, designs, copyright, and bankruptcy.

This Bill appears II years after the GovernorGeneral’s intentions were announced. On 23rd February 1956 the then AttorneyGeneral, who is now the Chief Judge of the Commonwealth Industrial Court, appointed a committee to review the bankruptcy laws. The committee presented its report on 14th December 1962. On 20th February 1963 the then Attorney-General, who is now the Chief Justice of the High Court of Australia, sent copies of the report and summaries of it to all honorable members and to professional bodies interested in the subject. He expressed the hope that he would introduce legislation into the Parliament when the Government had come to a decision on the report and the draft bill.

This Bill was presented shortly before the House rose in May. In the meantime a great number of submissions were made to the present Attorney-General (Mr. Snedden), as were made to his predecessor. Those submissions had been considered by them. Five of the submissions had been referred back to the committee and it had reported on them. The Bill, which is a very large one, is therefore the result of many years of very close consultation and very expert consideration. In fact, it does not represent many departures from the principles that have always applied to our bankruptcy law. As the Attorney-General says, it is largely reform. When the original Commonwealth Bankruptcy Act was passed, inevitably concessions were made to the different procedures that had been adopted in the different Australian States. With the passage of years, people have come to want more modern, more comprehensive, more cohesive and more co-ordinated procedures. This Bill provides such procedures for them.

The subject matter of the legislation is of considerable importance to the public. In the year in which the proposal to review the bankruptcy laws was first made - 1954-55 - the number of bankruptcies in Australia was 977; the liabilities of the bankrupts amounted to £3,166,432; and their assets amounted to £2,057,717. In every subsequent year the number of bankrupts, the amount of their liabilities and, to a lesser extent, the amount of their assets have risen. In 1963-64, the last year for which figures are available, there was a slight diminution in all those statistics. In 1962-63 the number of bankrupts was 2.735; the next year it had fallen to 2,578. The liabilities in the earner year amounted to £10,691,621; the following year they fell to £10,320,876. In the earlier year the assets amounted to £6,396,272 and in the following year they fell to £5,146,230. It will be seen that a great number of people in Australia go through the bankruptcy jurisdiction, that a large amount is involved in their liabilities and also that a large sum has to be disbursed from their assets. Accordingly, this is legislation which affects our community to a great extent. In addition to the persons whose estates are involved there are many hundreds of lawyers, accountants and other professional persons who are interested in this field.

We believe that the work of the community, and particularly of the persons directly concerned, will be better performed as a result of this reform. There are two matters in particular to which I now wish to refer. The first is the court which exercises the jurisdiction. Seven years ago, when discussing the estimates for the AttorneyGeneral’s Department, I made proposals for a Commonwealth Superior Court - in particular, a court which should exercise jurisdiction in those fields where the Commonwealth already had specific courts, such as the Bankruptcy Court and the Commonwealth Industrial Court. Furthermore it could be a court which could exercise jurisdiction in the very large number of cases where other bodies - some judicial and some purely administrative - exercise appeals or make decisions under Commonwealth laws. The passage of the years since then has confirmed my views in this matter. It so happens that the Attorney-General who first proposed and then appointed a committee to review the bankruptcy law, Sir John Spicer, the Chief Judge of the Commonwealth Industrial Court, is a man who in practice at the bar, in his term of office as Attorney-General, and since, as a judge, when opportunities have arisen, has shown his great interest in these fields, particularly that of industrial property law. There could not be a better person in Australia, I would presume to say, to exercise jurisdiction in all such matters. His colleagues on the Commonwealth Industrial Court have, in many cases, very great experience and expertise in these fields.

I should have thought it would have been very easy to incorporate the Commonwealth Bankruptcy Court with the Commonwealth Industrial Court into a Commonwealth Superior Court. When there have been amendments to the copyright laws and patent laws before the Parliament we have moved amendments to this end. We do not propose to do so on this occasion. Our support for such a proposition, however, is as strong as it was when we moved amendments in the House. In the next issue of “ Hansard “ will appear an answer by the Prime Minister (Sir Robert Menzies) to a question that I put on the notice paper on 24th March last. The question was -

What additional or different methods of appeal from decisions of Commonwealth departments and instrumentalities have come into operation since his answer to me on 14th May 1958?

The right honorable gentleman replied -

Since 1958 there has been a number of changes in the methods of appeal from decisions of Commonwealth departments and instrumentalities and the citations of some of the statutes have also been changed. I am therefore providing a revised list of the boards, tribunals, committees or courts to which such appeals can be made.

Then follows a list of dozens of Acts and dozens of different tribunals, courts, bodies and committees. I shall quote those concerning industrial property. In the Designs Act 1906-1950 an appeal lies, under part of section 25, to the Attorney-General or the Crown Solicitor. Under another part of section 25 it lies to the Supreme Courts of the States and Territories. Under section 28 it lies to the High Court of Australia. In the Trade Marks Act 1955-1958, under sections 111 and 112 the appeal lies to a single justice of the High Court of Australia, and under sections 115 and 116 to the Full Court of the High Court of Australia. In the Copyright Act 1912-1963, under section 37 an appeal lies to the Supreme Courts of the States and the Territories. In the Patents Act, section 84, an appeal lies to a single justice of the High Court, and under section 32 to the High Court of Australia. Under the Bankruptcy Act the jurisdiction is exercised by the Bankruptcy Court itself or, in some circumstances, by the various State bodies.

Some four or more years ago my curiosity was aroused by the fact that the Commonwealth was making payments to the States for the services of their judges and officers under the Bankruptcy Act, and I sought further information. At that time the Commonwealth made’ a payment of £1,470 a year to Queensland, £1,300 to South Australia, and £750 to Western Australia. Furthermore, of course, the judges and magistrates in all the States do exercise jurisdiction under the Bankruptcy Act. It is clear that the whole of the judicial or administrative procedure in matters of industrial property is complex; one might say that it is archaic.

Mr Snedden:

– Let me interrupt to say that bankruptcy is not an industrial property subject. Or is the honorable member speaking in general terms?

Mr WHITLAM:

– I was using it in rather a comprehensive or loose way, because it was so used in the GovernorGeneral’s Speech opening the Parliament in August 1954. He did not use the word “patents” although that would be, of course, industrial property in the strict sense. He did use the word “ bankruptcy “. I have, in this speech, continued to use that same term. On the question of the Commonwealth Superior Court I have been fortified in my views and advocacy by articles appearing in the “ Australian Law Journal “. These addresses were first delivered at the last Australian law convention. It is interesting to refer to an article which the Chief Justice of Australia, while Attorney-General, contributed to Volume 1, No. 1 of the “ Federal Law Review “ - the journal of the Faculty of Law in the School of General Studies at the Australian National University. There are two particular short passages which I wish to read. The first reads - it would seem appropriate to bring within the framework of the new court the present Federal Court of Bankruptcy, so that the original jurisdiction of the new court would include the whole range of bankruptcy matters under the Commonwealth Act.

In an earlier passage Sir Garfield Barwick stated -

The same considerations as move me to support the interposition of a new federal superior court between the Supreme Courts of the Territories and the High Court lead me to think that the new court should likewise perform the role of initial court of appeal from the Federal Court of Bankruptcy.

On this first point, then, I express my disappointment that when this very comprehensive review was made of the bankruptcy laws the opportunity was missed to bring the whole of the jurisdiction within the preview of the projected Federal superior court.

Mr Snedden:

– I am sorry to interrupt the honorable member, but in the context in which Sir Garfield Barwick was speaking he was saying that it was appropriate for the bankruptcy jurisdiction to come within the Federal superior court when that court was constructed. He was not arguing for switching over to the new Commonwealth Industrial Court, as it now exists.

Mr WHITLAM:

– I was not necessarily proposing that jurisdiction under this legislation should be given to the Commonwealth Industrial Court, so named. I would tend to think - I cannot be positive on this point - that the Commonwealth Industrial Court’s jurisdictions under the Arbitration Act should be incorporated within the functions of the approved Federal superior court. I certainly agree with Sir Garfield Barwick and, as I understand it, the Cabinet, which made a decision in principle on this matter in November 1962, that there should be a Federal superior court.

Mr Killen:

– The honorable member’s proposition is that all bankruptcy matters should be handled by a Federal court?

Mr WHITLAM:

– Yes. I just express regret that when this large review was made the opportunity was not taken to set up such a court and give to that court jurisdiction under this Act, or at least put into the legislation sections which would have that effect on a date to be proclaimed.

The other matter which I wish to raise is the question of priorities, in particular the priority which is to be accorded and the extent to which it is to be accorded to debts owed by bankrupts to their employees. I asked the former Attorney-General a question about this matter on 14th March 1962. I asked why, at that stage when the uniform companies laws had mostly been passed by the States and were being ordained in the Territories, a similar extension of the rights of employees was not being given under the Bankruptcy Act. The Attorney-General replied -

I put this idea to the committee on bankruptcy some time ago, and 1 was hopeful that very soon we would have a report from that committee. It is quite true that the committee’s report has been long delayed, but I am sure that honorable members will accept the proposition that to re-cast the entire Bankruptcy Act is by no means a small task. It is being done very throughly, and I hope to have the report very soon.

The fact is that now, 29 months later, the Bill will be going through the House. In the meantime, from all the information I can secure, many hundreds of employees have received smaller sums by way of wages, compensation and leave payments than they would have received if the bankruptcy law had been brought into line with the companies laws at the same time as those companies laws took effect. The Act is very much out of date in this respect. The Attorney-General has given the figures. The amount of wages which may be recovered will be increased from £50 to £300. The amount of workers’ compensation which may be recovered will be increased from £200 to £1,000. In Committee, we will move for the amounts which the Australian Council of Trade Unions and, I understand, the Australian Council of Salaried and Professional Associations have sought. Those amounts are not £300 but £500 as regards wages; not £1,000 but whatever amount is awarded under workers’ compensation; and not just £300 but whatever amount is due for long service leave, sick pay and annual leave. The attitude for which the A.C.T.U. and the Australian Council of Salaried and Professional Associations contend, and which the Australian Labour Party supports and will be expressing in an amendment, was adopted three years ago without a division by the South Australian Parliament. It may be, said that to this extent the companies acts are no longer uniform. In Victoria, also, an amendment was accepted which raised the limit above the amounts originally proposed in the uniform companies legislation and above the amounts proposed by this Bill. I would think that for reasons I shall expand in Committee the amendments should secure the support of the House.

Mr KILLEN:
Moreton

.- It has been more than 40 years since there has been a full scale review of the Bankruptcy Act. The Bill which the Attorney-General (Mr. Snedden) has put before the House is lengthy and complex. I can think of no measure less suited to consideration in a second reading debate. This is essentially a

Committee measure. I do not think much purpose will be served by attempting to extend the second reading debate. However, having said that, may I say that I find myself in wholehearted agreement with what the Deputy Leader of the Opposition (Mr. Whitlam) has said about the administration of the Bankruptcy Act in relation to a Federal court system? Let me show how difficulties may arise. I will be drawing further attention to this matter at the Committee stage. Clause 35 of the Bill provides the mechanism whereby proceedings may be transferred from one court to another. In a large State such as Queensland there may be three districts, which means registers. Not infrequently proceedings are transferred from a register in one district to another register. At this stage I would submit that clause 35 does not completely cover that difficulty.

I must apologise to my honorable friend for not having intimated to him before now that I propose to draw the attention of the Committee to what seem to me to be some 30 or 40 deficiencies in the Bill. I have no hard and fast views on them. Some of them appear in my judgment to be simple errors and I would hope during the course of the Committee stage that the Committee would feel obliged here and there at least to accept amendments. I do not propose to launch any amendments against any of the principles that reside in the Bill. I will give an illustration. The definition of a debtor’s petition refers to section 57. It so happens that it is not section 57. What is meant is section 56. That is a simple error of drafting.

Mr Snedden:

– If I may interrupt the honorable member, I would inform him that there are about a dozen amendments which may popularly be described as drafting alterations to cure defects of this kindI rather think that is one of them.

Mr KILLEN:

– There are some 29 amendments. This did not happen to be one; but be that as it may. The amendments that I propose tentatively to put to the Committee are of that nature. Some of them deal with matters that are possibly a little more fundamental. The Bill contains a far reaching and novel provision. It is in Part X, which deals with arrangements for creditors without sequestration. At the same time as being novel, it gives to a registered trustee in bankruptcy what seems to me to be a power that should be trammelled somewhat. Some of the powers given to the registered trustee in bankruptcy under proposed section 187 and following sections seem to me to be far too great. If the Attorney-General looks at section 188 he will find that when a person signs an authority he does two things. First, he gives to the registered trustee in bankruptcy an authority to summon a meeting of his creditors and, secondly, he gives him the power to dispose of or deal with his property. In proposed section 190 the AttorneyGeneral will find that, in disposing of property, the registered trustee in bankruptcy is not any way controlled. If he goes back to earlier provisions he will find that if the trustee wants to sell property in excess of f 5,000 he must get an order of the court. I inform my honorable friend that this is the type of alteration that I have in mind. Allied to this is a fear that I have that many people will not thoroughly comprehend the nature of the power that they are giving to the registered trustee. I would propose that that defect, as I submit it is, could be cured by incorporating in the schedule to the Bill a provision that the person signing the authority declares that he thoroughly understands the significance of making this authority and giving the power to the registered trustee.

It only remains for me to say that, even though this has been a rather long drawn out business, as the Deputy Leader of the Opposition has said, it is an incredibly complicated piece of legislation. I would hope that its passage through this House, and through another place, will not in any way be hastened. I am sure that the AttorneyGeneral will hold himself open to consider earnestly suggestions that will be made. I apologise to him profoundly for not having told him of the amendments that I have in mind, but I am bound to say in my own defence that I was not aware that when the House reassembled we would luxuriate in the midst of the debate on the bankruptcy legislation. Looking ahead, I thought that this debate would have been a few weeks away and that I would have had a opportunity to tell my. friend of the proposals I have in mind. Some of them may appear to be of a trivial nature, and that I am prepared to concede. But here and there are recommendations I would like to press upon him and urge upon the Government.

Finally, I take the opportunity to acknowledge the vast amount of work that was done by the committee appointed to review the bankruptcy law of the Commonwealth and also to acknowledge the work done by the former Attorney-General of the Commonwealth and by the present Attorney-General.

Mr CONNOR:
Cunningham

.- The best that can be said for this measure is that, like the curate’s egg, it is good in parts. My criticism is directed in a broad and general sense rather to what it does not contain than to what it does contain. The best that can be said for the Bill is that it is refurbished 1924 model. Like a motor car of 1924 vintage, it has been presented with a new coat of duco, with the chrome work duly replated and duly retrimmed and perhaps with balloon instead of high pressure tyres. But nevertheless a 1924 model it remains, because fundamentally it is an archaic bill based on archaic principles and it comes from a Government that has an archaic approach to these matters.

Sir, it was said by Charles Lamb in the “Essays of Elia” that the world can be divided into several groups of people and whether they be Parthians, Medes and Elymites, black and white, brown or brindle, there are only two divisions of mankind, those who borrow and those who lend. In good Australian vernacular, we can divide the community today into two groups of people, those who are chasing a £1 and those who are being chased for it. Having said that, I add that a more appropriate title for this measure would be the Debtors Relief Bill. Today we live m a new age with a new set of social conditions, and this Bill makes no attempt to meet them. Insofar as it applies to the tribulations of the commercial community - it was for that purpose that the bankruptcy laws were originally framed - the Bill has substantial merit. But today more than ever bankruptcy affects the lower income groups in the community.

We have the companies acts for the relief of corporations and similar statutory bodies and today, with the proliferation of private companies - almost every major or even medium size trading enterprise avails itself of the benefits that derive from being a private company - we must further consider the flimsy, ramshackle private debt structure of the community. We have progressed a long way from the days of the debtors prisons, which were so fully described and attacked by Dickens. We are now in a new period. But this Government, as usual, is like Marshal Laboeuf in the Franco-Prussian war. He reported lo Napoleon III that they were fully prepared for war, but, as was said, France was fully prepared in the period of the Franco-Prussian war for the Napoleonic wars, was fully prepared in World War I for the Franco-Prussian war and was fully prepared with the onset of World War II for the onset of World War I. This Government is now fully prepared for the onset of the 1929-34 depression.

We live in a new age at the end of the post war era, at the end of an era of unparalleled inflation. Today we have trades that did not exist in 1924, when the Commonwealth for the first time exercised its powers in relation to bankruptcy. We have new skills, we have new techniques and new media of communication which were also non-existent in 1924. We have refinements of advertising, business techniques and methods of selling which are the product of a new age. We have a retail credit structure and a hire purchase indebtedness which were never contemplated at the time of passage of the original Act and of which this Bill takes no cognisance. We live today in a period of intensified advertising techniques when it must be obvious to those who have not been blinded, or deafened by the massed drums of advertising, that our social priorities are upside down. The basic reason for this upsetting of our social priorities is that our economic and social system does not permit the people to exercise a real choice between the relative values of the various goods offered to them in the market place.

One of the largest industries today is mass advertising. This industry is essentially opinion forming, and one of its mab functions is to create wants for private consumption goods, the virtues of which are continually extolled by the massed drums of the advertising fraternity, in print, radio and television. One of the major illusions of our age is that we live in an affluent society. The hard truth is that we live in a society of exorbitant consumption, the best description of which, I think, has been given by Vance Packard, who called our society the “ Wasteful Society “. We live today in an age of flimsy frenzied mass production.

We live in an age where consumer wants are stimulated to the point where people, without any real appreciation of values, without having been educated into methods of buying or into the elements of home economics, are induced, by the subtleties and the insistence of advertising, to commit themselves to debts which they cannot possibly meet.

I think the current term in Britain, namely that people are buying goods on the “ nevernever “, is the best means of describing the system. We have today a whole postwar generation which is existing in a fool’s paradise. They have been bewitched, bemused and bewildered by the falsity of postwar commercial credit techniques. We have the doubtful benefit of a government which has at least tolerated, if it has not tacitly encouraged, a period of inflation, with consequences which have been disastrous to the home economies of areas such as I have the honour to represent. In an age of subliminal advertising we have reached the point of refinement where people, as a result of advertising which appeals to their supersensible perception and as a result of their minds being indoctrinated and conditioned, are accustomed to buy goods through sheer repetition of sales talk. People today lack discrimination, and their attitude to debts - I speak of the ordinary man on an ordinary income - is the best proof of the truth of the statement by an old German philosopher who said that the calculation of profitableness was an invention of the devil to bewitch and bemuse mankind. One does not cavil at a fair profit on goods of decent value, but today people are sold the flimsiest of goods on the flimsiest of pretexts and on the longest of terms. The inducements given to those who lack ordinary perception and ordinary standards of economic judgment are such that they are committed to a burden of debt from which they can never possibly recover.

Let me illustrate this further. I quote from an article published in the Sydney “ Sun “ on 12th July this year in which it was said -

We’ve never had it so easy - or owed so much! Australia’s 1U million people are £721 million in the red to hire purchase companies.

To that can be added approximately £300 million of debts to retail businesses which are carrying their own finance whether by hire purchase or by ordinary retail credit. The article continues -

The figure has the economists worried - lt has the hire purchase companies worried also. In the light of company failures in recent years aggregating some £100 million - various companies have gone into liquidation, the most notable, of course, being the Latec and the Reid Murray organisations - there is every reason for worry. The article from the Sydney “ Sun “ puts the position more succinctly than any words that I could use. It says -

The danger, they say, is Australia’s tendency to follow the trend in the United States.

And in America the top economists have hoisted warning signals.

The article went on to state that statistics from Washington show that of every 5 dollars people received in income, after paying taxes, 1 dollar went to meet the cost of their debts. In Australia the position is that for every £7 income received £1 goes in debt repayment. 1 refer to the words of William McChesney Martin, Chairman of the Federal Reserve Bank of the United States. He listed points of similarity between the present debt structure and that which existed at the time of the first great world depression. He said that there are many points of similarity between the two periods but he felt the most ominous was the complacency, the boundless optimism and the witless self-assurance that poverty was about to be abolished for all time and that perennial progress and expansion were certain.

Today young people wish to start off in life with everything. No one wishes to deny them the best that organised society can give, but the position is such that they are becoming hostages of fortune in the worst sense of the term. The commitments which they undertake will endure for a life-time because of the exorbitant interest rates they have to pay and the absolute lack of any price control as a result of the policies of this Government. In my own constituency the situation is most difficult. At the present time there is an application before the Industrial Commission of New South Wales - I do not want to comment on the merits of it - by the Federated Ironworkers Association for an industry allowance of £5 per week. The point I wish to make is this: This Government has most sedulously avoided collating and publishing statistics of wages in the various major industrial centres of Australia because if it did it would be found that in my own constituency, for instance, due to the preponderance of men employed in heavy industry as shift workers and because of the absence of any wages competition for a steel monopoly, workers are being seriously and miserably underpaid. One of the major consequences of that situation is that 28 per cent, of the available female labour is unemployed. Of the number available for employment, 78 per cent, or more than 4,400 are married women. Whilst I do not deny to any married woman who is able and wishes to do so, the right to secure a job, if she can, there is a vast difference between a voluntary act and an act of compulsion. In the latter case, a woman goes to work as a result of economic pressure in an endeavour to supplement the low wages of her husband.

In my constituency there has been a growth of 100 per cent, in the number of houses over the past 17 years. The migrants in that area, if we may so describe them, are of two kinds. First, there are the local migrants from inland Australia who are displaced rural workers, the mechanisation of rural production having increased very greatly. Those in the other group are from overseas. Both classes have come to my constituency in a period of postwar inflation, land values having been pushed up to the sky and housing construction costs having been seriously inflated. These people have lacked the initial capital with which to make a proper deposit on a home and have turned immediately and automatically to various finance companies for second mortgage finance. That second mortgage finance has been obtained, not from an orthodox financial institution, but mainly from hire purchase companies and at a flat interest rate of 7 per cent., 8 per cent, or 9 per cent., the true simple reducible rate of interest being anything from 15* per cent, to 19i per cent. I direct attention to these matters to illustrate the true position and the need for more that just the bald generalities that are provided for in the Bill.

We need provision to be made in the Bankruptcy Act for an ancillary system of debt relief - a system under which people will not be accorded the moral stigma of default and will not suffer all the penalties and disabilities of full bankruptcy. In many cases the proper approach to onerous contracts of debt would be the rewriting of those contracts in humane and simple terms to make them equate with the wages of the debtors. That would eliminate perhaps 50 per cent, or 60 per cent, of future bankruptcies. We are in a new age; we need a new outlook. This Government should show that it is capable of meeting the needs of the people of this era. As an Australian, I have always believed that it was a major scandal for people to be treated as they have been. People come to my office, not in ones and twos but in scores, and tell me that they have three or even four garnishee summonses on their wages. They tell me that they are seriously in arrears with their rent, even to the Housing Commission. Having probed each case, I have found that they have been honest, decent people who have gone to the limit but through no fault of their own are not in a position to meet their commitments.

The position will become worse, because one of the first major announcements made by the debt collecting Askin Government in New South Wales was that it would streamline the methods of debt collection. I should be the last person in this House to deny to any creditor justice from people who are able to pay but, because of the decision of the Commonwealth Conciliation and Arbitration Commission, wages not merely have ceased to chase prices but have no hope whatever of ever catching them.

Mr Snedden:

– What about discussing the Bill instead of these political issues?

Mr CONNOR:

– It may be a political issue. But it is also a serious economic issue, and the repercussions will be felt in the Bankruptcy Court. My general comment on this measure is quite valid, and the AttorneyGeneral (Mr. Snedden) well knows it. It may be poetic justice, it may even be an act of prudence on the part of the Government, that this Bill should have been dealt with this afternoon before the Budget is introduced tonight. The two will have a very definite connection.

We face a situation in which, as I said earlier, wages have no hope whatever of catching up with prices and in which hire purchase interest rates are virtually uncon trolled. The best summation of hire purchase finance is that contained in the words of an English judge who said that a hire purchase contract is an agreement to buy goods which you may or may not need from a salesman whom you do not know under a contract that you do not understand and on terms that you cannot afford to pay.

From time to time we hear spokesmen for the Government say that there is not sufficient capital for investment. The Government should start right at the bottom and re-examine the flimsy and ramshackle debt laws of this country. It should introduce proper legislation and, as a national Government, should set an example to the various States to ensure that debts are collected in a humane manner and that usury is controlled. It is small wonder that Christ drove the money lenders out of the temple with a whip. Money lenders are with us today. I agree that a lender of money at a reasonable rate of interest is entitled to his return, but today usury is rampant and people are being seriously exploited. Many a person who has a television hire purchase contract comes to my office and complains. He has bought a television set priced at, say, £200. If he had had the cash or if the banking system had provided him as an honest citizen on the security of his good name and job with a personal loan, he could have bought it for £130. But, having bought the set on terms extending over three years and interest and insurance charges having been added, his commitment is of the order of £380. Are debts of that nature to be maintained and collected? I ask any fairminded member of this House whether that state of affairs is not a shame and a scandal. We should see that proper wages are paid to people and that proper relief is given. In the meantime, the measure now before us is an improvement on the existing legislation, but it is too little too late and for too few.

Mr BOWEN:
Parramatta

.- Mr. Speaker, our original insolvency and bankruptcy laws were introduced with two main principles in mind. The first was that, when a man got into financial difficulties and was unable to pay his debts as they became due, such assets as were available for his creditors should be shared equally between those creditors. The law was designed to provide that no creditor should get 20s. in the £1 while another got only 5s. or nothing. The principle was that they should share equally from a common pool. The second principle was that an individual who had handed over his assets for the benefit of his creditors should be entitled to obtain a discharge and be able to make a completely fresh start. As the honorable member for Cunningham (Mr. Connor) has reminded us, we are not very far removed from the days when a man could be confined in a debtors’ prison.

The modern law of bankruptcy recognises the fact that incapacity to pay debts may arise for a variety of reasons and that in many cases, for example where fire or drought occurs, no moral blame is attachable to the debtor. Accordingly, there has been a tendency in modern bankruptcy legislation, not only in this country but also in other countries, to ease the position of people who genuinely are unable to pay their debts and at the same time to provide for penalties to be enforced against people who, because of fraudulent or recklessly careless conduct, have got into difficulties and have defrauded their creditors.

Our original Commonwealth Bankruptcy Act,” as we know, was passed in 1924 but did not come into operation until 1st August 1928. Of necessity, it was a hotchpotch of the various Stale laws which in turn were based on the law of the United Kingdom. One example of this is provided by the fact that Part XI of the existing Act, which deals with deeds of assignment, was influenced by the law of South Australia, while Part XII, which deals with deeds of arrangement, was influenced by the law of New South Wales. As a result, you find legal practitioners in South Australia, where debtors enter into arrangements short of actual bankruptcy, proceeding under Part XI, while practitioners in New South Wales proceed under Part XII.

After 34 years of experience, the Bankruptcy Law Review Committee was in a position to consider a purely Commonwealth bankruptcy law. It submitted its report on 14th December 1962, and included a draft bill in the schedule to that report. In the main, the Committee’s recommendations have been followed in the Bill which is now before the House. Honorable members might perhaps have wished’ - indeed some have suggested it - that a more drastic rethinking of bankruptcy law might have been undertaken, but in point of fact, apart from minor difficulties, the Bankruptcy Act has worked well. I suggest that this revision which has been undertaken by the Committee is a very commonsense and workmanlike revision.

At the time of making his second reading speech, the Attorney-General (Mr. Snedden) supplied a schedule of the major changes to be effected by this Bill. This schedule is incorporated in “ Hansard “ and, from it, we can see the different advances made by the Bill. The honorable member for Cunningham launched into a speech about the complexity of modern life and the various ways in which a man may get into debt today which were not open to him in times gone by. What he said is very true. The ways in which debt may arise are more diverse and more complex than they were; but honorable members may think that the debt remains the same. As a matter of law, the relationship between debtor and creditor is still the same as ever it was, however one manages to get into debt. Most of the things about which the honorable member for Cunningham spoke are really symptoms, and the Bankruptcy Act is not the place to deal with them. The Bankruptcy Act is the means which the law provides for dealing with a person after his debts have been incurred and he is not in a position to pay them as they fall due. Notwithstanding the honorable member’s allusions to the military unpreparedness of the French, I hold the view that this Bill is a workable and commonsense measure.

Most of the comments which I would like to make about the new provisions of this Bill would be better made in the Committee stage when I would hope to have the opportunity of speaking to some of the individual clauses of the Bill, but perhaps it might be as well to make some comments of a general nature here. First may I comment on the change in the position of the Crown under this Bill. Honorable members may recall that under section 5 sub-section (3.) of the Act, there was a limited application of the Act to the Crown, For example, the Act, in providing for the avoidance of preferences to any creditor under section 95, applied to all creditors but not to the Crown if it was a creditor. This Bill provides in clause 8 that the whole of the provisions of the new Act shall apply to the Crown; so, in future, if a preferential payment is made to the Crown in any of its various departments or instrumentalities, the payment may be attacked as a preference. The money will have to be put back into what I have called the common pool and the Crown will then be in the same position as any other unsecured creditor in receiving a dividend from that pool. In view of the increasing extent to which the Crown, in modern times, has undertaken commercial activities, this is a fair provision.

In addition, we notice a matter to which the Attorney-General directed attention during his second reading speech. I refer to the fact that in the Bill, the priority which the Commissioner of Taxation formerly had for Commonwealth income tax is now modified. In paragraph (a) of sub-clause (1.) of clause 109, it is provided that ninth in order of priority shall come the payment of assessed income tax, being tax assessed under any Act, State Act, or under an ordinance of a territory of the Commonwealth, made before the date of the bankruptcy and not exceeding, in the whole, one year’s assessment. Previously, the Commissioner of Taxation had absolute priority for all assessments, whether made before or after the sequestration order and, of course, extending beyond one year’s assessment.

The kind of results which flowed from that situation may be illustrated. First, there was the situation where credit was given to a person whose financial position appeared to be better than it actually was because there were large amounts of tax not yet assessed. You could not ascertain the position from the Commissioner of Taxation, if you were dealing with such a man, because of the secrecy provisions of income tax law. Later assessments would issue, the Commissioner of Taxation would be paid in full, and the person who had been led to deal with such a debtor might receive a small dividend, or be left lamenting.

Again, you had the situation in which a man had a large number of small creditors who could ill afford to bear the loss. They would be left either without any payment or with only a small payment, while the Commissioner of Taxation was paid in full, or almost in full. In one instance, which is perhaps worth mentioning, creditors provided money - provided an indemnity - so that legal steps might be taken to recover assets. They risked their money in order that these steps could be taken. The Commissioner of Taxation claimed and took the benefits of the assets so recovered. That was the position in the case of In re Redman, ex parte the Official Receiver, in 1948, which is reported in Volume 16 of “ Australian Bankruptcy Cases”, at page 90. The Bill provides that where an indemnity is given, under which steps are taken and assets are recovered for the benefit of the creditors, the court may make an order that the creditors who took the risk and gave the indemnity will be given such advantage or priority as the court orders. This provision was in the Act, but it did not bind the Crown. It now appears in clause 109 of the Bill and it will bind the Crown. The unfair situation which I have outlined and which was dealt with in the case of In re Redman, will not occur in future.

Another matter that is worth mentioning is the increase from a financial point of view of the various figures in the Act to accord more with current values. The outstanding case of this relates to a petitioning creditor’s debt. The amount used to be £50. Clause 44 increases it to £250. With the value of money decreasing, it was found in the past that quite small debts might be made the subject of a bankruptcy notice. These debts were then paid off, so that the Act was being used as a means of debt collecting. With the larger amount of £250 which is now inserted by the Bill this kind of misuse of the Act should become very much less common.

Another provision worth mentioning is the provision in clause 149, that discharge will be automatic after five years unless specific objection is raised to a discharge being granted. As honorable members are aware, under the existing Act, an application has to be made for discharge. The application may or may not be granted by the Court. Many bankruptcies have continued for 20 years or so without being cleaned up, a practice not in accordance with public interest. I commend the new provision that a discharge shall be automatic after five years unless objection is taken. The position of a creditor who believes that a debtor has been fraudulent or has not paid enough to his creditors is still safeguarded. He may apply to the Court to defer discharge until a greater dividend is paid.

The provision contained in clause 39 also is worth mentioning. I wish to criticise this provision. Under the existing section 26 (2.), an appeal lies from an order or judgment of the Federal Bankruptcy Court to the High Court. The provision in clause 39 of the Bill before us means that an appeal will lie, as of right, from the making of a sequestration order, but will lie only with the leave of the Federal Bankruptcy Court or the High Court in any other matter. Practical experience in this jurisdiction has shown that very important matters are decided apart from sequestration orders. Although a sequestration order represents an extremely important stage because it alters a man’s status from a legal point of view, most of the difficult matters and many of the important matters are dealt with at a later stage - for example, when an attack is made on payments because there are preferences.

I recall a case in 1952 - Richardson v. the Commercial Banking Company of Sydney Ltd. - reported in volume 82 of the Commonwealth Law Reports at page 110. A claim for many tens of thousands of pounds was made against the Commercial Banking Company of Sydney Ltd. in the bankrupt estate of Harold Joseph Price. Difficult questions were involved. Honorable members might say: “You can go to the High Court and get leave “. But you might or might not get leave. Honorable members will be aware that the principles which decide whether leave shall be granted are that it shall be a matter of public importance or a matter where a large amount is involved. The case to which I have referred probably would have answered those tests. Very often where preferences are involved or a bank takes a defence under section 96 or 96a, matters whigh are very important to the parties to the litigation are concerned, but such matters may not be of a kind considered to be of public importance, one of the qualifications to the granting of leave. Until a Federal superior court is established, I suggest that in these matters appeal to the High Court should lie as of right. After all, the very nature of the matters discourages excessive appeals. People do not rush into appeals from the Bankruptcy Court to the High Court. A study of the reports shows that there have not been a very large number of appeals. In those cases where an appeal is necessary and it is a matter of con siderable importance to individuals, I do not see sufficient reason to make appeals subject to leave. I am aware that the present proposal was recommended by the Committee in its report, but it is a matter on which I ask honorable members seriously to consider whether appeals should not be as of right.

I wish now to refer to the introduction of the new Part X which provides for arrangements with creditors without sequestration. This is another matter which should not be discussed in detail in a second reading debate. It appears to be a workable and practical part to take the place of the old Parts XI and XII. I would like to refer to various other aspects of the Bill, but I think it would be more appropriate to do so at the Committee stage when the clauses will be debated. In general, the amending Bill, which so closely follows the report of the Bankruptcy Law Review Committee, is a workmanlike job. The criticism which I shall offer at the Committee stage is of a minor character. I support the Bill.

Mr IRWIN:
Mitchell

– I wish to congratulate the Attorney-General (Mr. Snedden) on the Bill before us. However, I regret that clause 155 has not set out qualifications necessary before a trustee is appointed or registered. I believe that a trustee should be a person trained in the type of business conducted by the bankrupt. Unfortunately - and I use that word advisedly - almost invariably a trustee is a public accountant without specialised training in marketing and management. There is a vast difference between management and accountancy. My experience, gained over many years, is that a number of businesses would have been rehabilitated had an experienced manager been appointed as trustee instead of a public accountant being appointed.

I had experience of a case where the creditors had great confidence in the debtor. The creditors recognised that the debtor had a good business and that it was well managed. As the debtor was short of capital, the creditors recommended to him that he enter into a deed of arrangement under which the creditors would supply him with sufficient goods and materials to carry on the business. The debtor agreed and a public accountant, who also was an official receiver, took control of the business. He simply took over with an air of indifference and a “ could not care less “ attitude. To my knowledge, the trustee had £900 in his account but he failed to pay the rent of the business and the monthly hire purchase payments on the car which was needed to carry on the business. Of course, the owner of the property went into occupation and the business was lost. In that case the creditors did not get a fair go, nor did the debtor, and the only person to benefit was the trustee who received his commission for winding up the estate. This aspect of the legislation should be thoroughly studied. In my view, only persons with specialised training in certain fields of business should be appointed as trustees. Persons should not be appointed as trustees simply because they are public or chartered accountants.

Mr SNEDDEN:
AttorneyGeneral [5.40]. - in reply - Considerable interest in particular clauses of this Bill has been demonstrated by honorable members who have spoken in the debate. I think it proper for me to say that I believe it is intended that when I finish speaking in reply to the second reading debate we shall go into Committee and then report progress. I cannot say when the Committee proceedings will be resumed; that is a matter in the hands of the Leader of the House (Mr. Harold Holt · Bruce · LP

. I expect, however, that it will be some little time before we resume our consideration of the Bill because there is a Budget debate looming. With those matters in mind I think I should tell honorable members of several Government amendments that I propose to introduce, so that consideration may be given to them.

First, there are about a dozen purely drafting amendments which will need to be made. This may sound bad, but when it is considered that the Bill embraces 161 pages and that there are 315 clauses which require cross-referencing and that kind of thing, it can be seen that the Parliamentary Draftsman has made a very good effort. There are three other matters to which I should refer. One of them may be considered as having three sub-divisions. The first matter involves what is by nature somewhat of a drafting amendment. I refer to clause 218 and the advertising of a deed. It is proposed to amend this clause so that the present provision for advertising in the “ Gazette “ will have added to it “and such other manner as may be prescribed.” This will cover, for instance, advertising in a local newspaper. I believe this is necessary for two reasons; first, to make sure that there is adequate knowledge of the matter in the local area, and, secondly, to give consistency with the requirements for publication of a sequestration order, which has to be advertised in the “ Gazette “ and in such other manner as is prescribed.

The next amendment has relation to clause 109. Clause 109 (1.) (f) prescribes the priority which is to be given in relation to salary and wages to a former employee of the bankrupt. It has been represented to me that the clause as worded does not include a priority for travelling expenses and car expenses incurred by commercial travellers. In point of fact I do not accept this suggestion; in my view the clause as drawn does cover such expenses. But I think the matter is sufficiently important to warrant an explicit provision to cover such expenses.

The third of these amendments is the one which I said has three sub-divisions, although it is really only one issue of substance. The honorable member for Parramatta (Mr. Bowen) has directed attention - very properly, I think - to the extreme change that will occur in the proposed Act in relation to the position of the Crown in respect of bankruptcy. The Crown is bound by the provisions of the Act. Because the Crown is bound three matters flow which need special attention. The first involves the doctrine of relation back. There should be specific provision made so that when a sum of money is paid pursuant to a statute it shall not constitute a preference and it shall not fall within the doctrine of relation back. This will be done. There is an argument that the clause as drawn already provides for this, but again I think we should make it explicit that this is the case.

The second matter is one that has been put to me mainly by State Governments. It is said that clause 58 (3.) provides that any remedy which is sought against a bankrupt in relation to either his property or his person must be pursued through the Bankruptcy Act. Suppose a person, through the court and pursuant to a statute, has imposed upon him a penalty which has attached to it a term of imprisonment in default if the penalty is not paid. It is put to me that, as the Bill now stands, if the person did not pay the penalty and went bankrupt there would be no provision for enforcing the term of imprisonment in default which had been imposed by the court. Whether this is so or not is a matter which ought not to be left in doubt. In my view there should be a specific amendment to the clause to put this beyond doubt and make it clear that the default provision can operate if the penalty is not met.

The third matter, falling within the same provision, involves garnishee proceedings which the Commissioner of Taxation may take. Suppose person A owes the Commissioner of Taxation a certain amount of money. The Commissioner is able to get a garnishee order against person B if B has the money and is in fact a debtor of A. 1 think it should be made clear that this garnishee provision will be continued under the Bill.

I give the House this information so that those who are interested - as I know are the Deputy Leader of the Opposition (Mr. Whitlam), the honorable member for Moreton (Mr. Killen), the honorable member for Parramatta and the honorable member for Mitchell (Mr. Irwin) - may have an opportunity to consider it. I think I should refer at this stage to the single criticism of the legislation which was offered by the Deputy Leader of the Opposition. I do not suggest that the criticism was inspired in any way by malice; on the contrary, I think the honorable member put it forward in what he hoped was a constructive fashion. He suggested that the bankruptcy jurisdiction should not be exercised by a judge who is a judge of bankruptcy, but that the bankruptcy jurisdiction should be exercised by a Federal superior court

There would be a lot of strength in the honorable member’s argument were it not for the fact that there is no Federal superior court at this point of time. The honorable member’s criticism refers rather to an intention than to a current complaint. I think we must interpret his suggestion as meaning that when there is a Federal superior court, which the Government has announced its intention to establish, the bankruptcy jurisdiction ought to be vested in that court. As I have said, there is a great deal of strength in the argument put by the honorable member, although I do not at this stage commit myself specifically to agreement with him, for the very reason that bankruptcy is a quite special jurisdiction. It is a jurisdiction requiring a great deal of specialised knowledge, and I would not be able to give my opinion on the honorable member’s suggestion until I had progressed further with my own thinking about a Federal superior court. A good deal of work is going on at present on the proposal to establish this court. I personally have given a good deal of consideration to the matter, and I would not like to commit myself to a concluded view in advance.

The Deputy Leader of the Opposition also served notice of his intention to move amendments of sub-clause (1.) (f) and (g) of clause 109, the priorities clause. He suggests that the amount of priority for wages should be increased to £500, that the amount of priority for compensation should be unlimited but should be the total amount of the compensation awarded, and that there should be no limit on the amount of payments in respect of annual leave, long service leave, or sick leave. The Deputy Leader having served notice of his intention in respect of these matters, I shall, of course, give a great deal of attention and consideration to them. However, as the honorable member for Parramatta so rightly pointed out, in a bankruptcy there is a body of debt and a body of credit available, and the whole purpose of the Bankruptcy Act - the very essence of it - is to make, in principle, an equal distribution amongst ali of the creditors according to the amounts which are owed them.

Mr Griffiths:

– Should it nol be a matter of first things first?

Mr SNEDDEN:

– Just a moment. A provision has been introduced into the Bankruptcy Act in section 84, and into the new Bill in clause 109, which assigns specific priorities and, of course, nobody would for a moment doubt the need for priorities, lt goes without saying that there should be priorities. The issue here is: When a priority is given, where does the equity lie as between the person who is given a priority and the general body of creditors? Strong arguments for increasing the amounts of priority payments will be capable of being put and strong arguments for reducing the amounts of priority payments will be capable of being put. This is a question on which no rule can be determined which will settle the amount at which the figure should be set. As I indicated, I shall, of course, give close attention to the matter.

I take the opportunity of congratulating the honorable member for Moreton, who has quite obviously spent a great deal of time studying the provisions of this long and complex Bill. He has very kindly offered to make available to me the notes which he has made as to what he regards as shortcomings of the Bill, not on issues of principle but on issues of expression. He having kindly made the offer, 1 intend to avail myself of it and give close attention to the matters he raises.

Mr Duthie:

– I shall have something to say about section 10 at the Committee stage.

Mr SNEDDEN:

– Clause 10 is the clause of which the marginal note reads “Delegation by Attorney-General”. I shall wait with bated breath for what the honorable member will say.

Mr Duthie:

– I refer to section 10 of the present Act, not clause 10 of the Bill.

Mr SNEDDEN:

– The honorable member for Parramatta, if I may say so, has a very high reputation in the law, as we all know. He very astutely has picked out perhaps half a dozen points which are the principal matters of reform in this legislation and, of course, they are the principal matters in terms of principle, but there is a whole multitude of small issues to which oil has been applied so that the cogs will run more smoothly. Of course, the issues which he has raised are the major issues. The honorable gentleman raised a point in relation to clause 39, on the matter of leave being required for appeal to the High Court, that leave being granted either by the Bankruptcy Court or by the High Court itself, on all matters except sequestration orders, where there is an appeal as of right. As he rightly said, this provision was recommended by the Committee. The Government accepted that recommendation, but he having indicated that in his own view it would be more desirable that leave be not required in such a wide range of issues, I shall, of course, submit that matter also to a close examination. By the time we come to the Committee stage, I hope, I shall be able either to give an answer which the honorable member will accept or to indicate to him my agreement with him.

Question resolved in the affirmative.

Bill read a second time.

Message from the Administrator recommending appropriation announced.

In Committee.

Progress reported.

Sitting suspended from 5.57 to 8 p.m.

page 31

APPROPRIATION BILL (No. 1) 1965-66

Message from the Administrator recommending appropriation for proposed expenditure announced.

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

Mr SPEAKER (Hon Sir John McLeay:

– In accordance with Budget practice, I now call on the Chairman of Committees to take the chair as Deputy Speaker.

Second Reading. (Budget Speech.)

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I move -

That the Bill be now read a second time. I do so to present the Budget proposals of the Government for the financial year 1965-66.

The Budget makes provision for a greatly enlarged expenditure on defence, a substantial increase in payments to State Governments, further growth in social welfare payments, increased international aid and increases in many other items encompassed in the Budget as a whole. Together, these proposals comprehend an estimated increase in Commonwealth expenditure this year of £275,000,000. This is the largest expenditure increase for which a Commonwealth Budget has ever bad to provide. Our steadily expanding economy will give us a large increase in revenue but one falling substantially short of the proposed increase in expenditure. To help meet this additional expenditure and to offset to some degree the additional call Government expenditures of this magnitude will make on resources, the Government proposes certain increases in taxation. I shall refer to these in detail later.

To set these proposals in their proper context and perspective, I should say something briefly on the role the Budget has in our economy and on the broad aims the Government seeks to achieve in framing its budgetary plans.

Basically, of course, the annual Budget comprises a set of proposals submitted to Parliament for raising revenues and other receipts and for expenditures to carry on various activities and to meet various commitments. But it has long since become accepted in all advanced countries that, since the Budget has important social and economic effects, the policy of the Budget must be shaped, both in the large and in detail, with these effects in view In Statement No. 5 attached to this Speech, I summarise Commonwealth Budgets over a period of years back. With the concurrence of honorable members, I incorporate in “ Hansard “ this Statement and others to which I shall refer in the course of my speech. To quote one fact from it, total Commonwealth expenditures have risen from £1,161.000,000 in 1954-55 to £2,392,000.000, in 1964-65. That illustrates their magnitude. It also shows how they have grown. They reflect the rising cost of Government in a fast-growing economy. They reflect, also, the response by a democratic Government to what it believes to be the will of the people. Swiftly-moving times create needs for new services and policy changes. But there is a price to be paid for these which the taxpayer must meet. The Government must accept responsibility for judgment as to whether the new or additional provision justifies the burden it creates. Not only have expenditures more than doubled in the course of ten years, they have also become enormously pervasive. We are all affected in some degree, young and old alike, by the provisions of a Commonwealth Budget.

Budgetary policy must necessarily form part of overall economic policy, be consistent with it and serve identical aims. We have often stated the broad aims of our economic policy - the steady growth of Australian population and output, a high standard of living, full employment, stability of prices and a strong external balance of payments. To these must be added the increased emphasis now given to national security by a much enlarged defence programme. These objectives guide us from year to year in drawing up our Budget proposals. We look at the broad condition of the economy, in both its domestic and external aspects, we con.sider the state of employment, the prospects of further growth in output, the trend of costs and prices, the balance of our overseas trade and the level of our overseas reserves. We ask ourselves what further expenditures are necessary or desirable to promote development, encourage enterprise or assist the position of various community groups. We study revenue prospects in the light of our required expenditures but we also review each year the incidence of current taxation. It is no longer a matter of merely considering how to balance the public accounts. Some years it appears right that, to stimulate expansion generally or in some sectors, expenditure ought to be allowed to rise ahead of receipts; in other years, it appears that there ought to be some check on the rate of increase in demand. Each year presents different facts, different prospects, different necessities; but the general nature of the problem remains the same.

This year the predominant fact is that the Australian economy is already running at full pitch. It is a year in which, for example, we shall see an enlarged demand for resources on the part of several great mineral projects now gathering momentum with all their accompanying requirements for port and railway construction and new housing for many of those employed in these activities. It is a year also when some diversion of resources must be made to meet a total defence expenditure of £385,921,000. Last financial year it was £304,491,000. Therefore, there will be an increase in excess of £80,000,000 this year, and over the last four years the provision for defence will have grown from something of the order of £220,000,000 to the sum of £385,900.000 provided for in this Budget While further resources for production will become available during the year, they are likely to be more limited in extent Demand has risen strongly and seems likely to continue to rise. Meanwhile, as I have said, we confront an exceptionally large increase in Commonwealth expenditure and, against this, a substantially smaller increase in revenues and other receipts.

Our additional expenditure will add considerably to the general demand for goods and services. But the taxation measures we are taking to meet and offset its effects are in no sense designed to slow down expansion in real terms nor, I am confident, will they do so. Our aim is to ensure that growth goes on under the conditions of a steady balance between demand for goods and the supply of goods and of resources for producing them.

Last financial year, 1964-65, saw a further big rise in national output - despite labour shortages, industrial disputes, sharp falls in some export prices and drought over wide areas of this country. By any reckoning, it was a good performance. But while output thus increased substantially, expenditure increased still more. In the National Accounts for the year, Gross National Product at current prices showed an increase of 9 per cent Gross National Expenditure, on the other hand, increased by 13 per cent

There were two main results of this. The labour situation became still more difficult, with shortages of skilled people - and indeed of many other types of labour - worse than ever, labour turnover high and a vast amount of overtime working. The other result was a large rise in importssome £250,000,000 or 22 per cent, above the previous year. Concurrently, there was some weakening of our external position. Exports fell some way below the total of 1963-64 and doubts arose as to whether capital inflow would continue on the scale of recent years. Our overseas reserves fell by £158,000,000.

I shall have something to say later about prospects for this year and about the impact our Budget can be expected to have on the situation we see developing. Here I am chiefly concerned with the key point that expenditures under the Budget will make a formidable addition to overall demand. They will do this at a time when

page 33

F.8226/65.- R.- P]

our resources are already fully taxed and when we are calling heavily on imports to supplement local supplies of goods and materials and equipment

page 33

EXPENDITURE 1965-66

I should like now to run over the main elements in our proposed expenditure for this year, indicating where and why the increase has come about.

Defence

Defence is not the largest item in the Budget Payments to or for the States and social service expenditure exceed it considerably and this .reflects the increasingly strong call on us for community facilities and services. But defence does this year show the largest increase. We are providing for total expenditure of £385,921,000 which would be £81,430,000 or about 27 per cent, greater than actual expenditure last year. Of this increase, about £58,000,000 will be spent within Australia and £23,000,000 overseas.

These are large sums but they simply express the fact that we are now engaged in a big and widespread defence effort, both at home and abroad. Apart from the pay and maintenance of increased forces, we are acquiring a great deal of costly new equipment such as submarines, guided missile destroyers, patrol craft, antisubmarine frigates, Mirage fighters, Hercules transports, control and reporting units and a wide range of arms and materiel for the, Army. There is also a large amount c£ construction involved. Expenditure on airfields, barracks and similar works is estimated to be rather more than double that of last year, at £30,000,000 this year. Last year it was less than £15,000,000.

Payments to or for the States.

Payments to or for the States make up the largest item in the Budget. We estimate that this year they will reach £549,640,000 - and this does not include anything for the support we may have to provide for Loan Council borrowing programmes if, as we expect, loan raisings fall short of the programme of £295,000,000. It amounts to an increase of £61,402,000 or 12.6 per cent over the payments made last year.

Within this increase of £61,402,000, about £37,000,000 is due to the rise in Financial Assistance Grants this year under the new arrangements agreed with the States last June to cover the period 1965-70.

Following recommendations of the Commonwealth Grants Commission, there will also be an increase of £5,025,000 this year in the Special Grants payable to Western Australia and Tasmania.

Grants to States for assistance for universities will be £22,714,000, an increase of more than £2,000,000, and we will be providing £9,953,000 for science laboratories and technical training, £750,000 for research grants and £1,000,000 for interim capital grants for Colleges of Advanced Education. The two latter items, amounting to £1,750,000, appear in the Budget for the first time this year.

Grants and advances to the States for developmental projects this year total £11,567,000 which is £2,496,000 above the total for 1964-65. Besides this, £14,238,000 is being provided for rail standardisation works in South Australia and Western Australia, an increase of £6,860,000 over last year.

Social Services

Expenditure from the National Welfare Fund is the second largest item in the Budget. We estimate that, on present scales of benefits, it would amount to £465,652,000, an increase of £20,469,000 over expenditure in 1964-65.

It has been this Government’s regular practice to review thoroughly the social welfare programme each year as it considers the Budget items.

This year, we have it in view to improve certain benefits and to widen eligibility for others.

We try, Mr. Deputy Speaker, to look at this problem from the standpoint of where the need is strongest. Therefore, we propose that supplementary assistance, which is now payable to “ single “ pensioners who are deemed to be dependent solely on their pension and who pay rent, will be increased from 10s. to £1 a week. This will be associated with a means test under which some supplementary assistance will be payable until a pensioner’s means-as-assessed reach the equivalent of £1 10s. a week. Eligibility for supplementary assistance on the new basis will be extended to a married couple where the husband is a pensioner and his wife receives a wife’s allowance. The husband’s pension in these cases will also be increased to the standard rate of £6 a week. These measures will increase the income of eligible married couples by up to £1 10s. a week.

The wife’s allowance of £3 a week presently payable to the wife of an invalid pensioner or age pensioner who is permanently incapacitated for work will in future be paid to the wife of any age pensioner where she has the care of a child. In addition, payments for dependent children will be extended to all age pensioners.

At present, payments to pensioners for children undergoing full-time education cease at the end of the year in which these children reach eighteen years of age. We propose to continue the payment of these benefits until the student child reaches the age of twenty-one years. Widows with student children will remain eligible for the Class A widow’s pension until the youngest child, if a student, reaches twentyone years.

Action is proposed to assist a pensioner who is responsible for the funeral costs of a spouse, a child or another pensioner. In these circumstances, a funeral benefit of £20 will be payable. The present funeral benefit of £10 will be maintained where the funeral costs of an age or invalid pensioner are met by a person who is not a pensioner.

We also intend to introduce a new benefit, to be known as a guardian’s allowance, of £2 a week for widowers and other unmarried persons receiving an age or invalid pension who have the care of one or more children. Where, for example, an eligible age pensioner has, say, one dependent child, his weekly income will be increased by £2 15s., comprising £2 for the new guardian’s allowance and 15s. for the child. Such a pensioner will thus receive each week benefits totalling £8 15s., excluding any supplementary assistance to which he may be entitled.

These proposals will require amending legislation. The additional and new pension benefits will be payable on the first pension pay-day after the legislation comes into operation.

Soon after assuming office, this Government introduced the Pensioner Medical Service under which free general practitioner medical services, pharmaceutical benefits and public ward hospital treatment are currently made available for certain age, invalid, widow or service pensioners, and for persons in receipt of the tuberculosis allowance. These benefits are also available to dependants of such pensioners and recipients of tuberculosis allowances. This has, without doubt, been of great assistance to the classes of people concerned. We now propose to extend the scope of the Pensioner Medical Service in two important respects.

First, we propose to remove the existing means test governing eligibility for enrolment in the Pensioner Medical Service. This will mean that all persons who are receiving age, invalid, widow or service pensions or tuberculosis allowances will become eligible. Secondly, the definition of dependant will be extended to include student children. We will approach the States to seek the inclusion of this enlarged group of eligible persons within the present arrangements for free public ward hospital treatment. Some 120,000 pensioners and their dependants should benefit from these extensions of the Pensioner Medical Service which will commence on 1st January 1966. The estimated cost of all these decisions is £7,720,000 in a full year and £5,180,000 in 1965-66. The total expenditure from the National Welfare Fund in 1965-66 will be £470,832,000.

Repatriation Benefits

In the field of repatriation benefits we are putting forward a new intermediate rate of war pension which will fall between the Special (Totally and Permanently Incapacitated) Rate and the General (100 per cent.) Rate. Its purpose will be to provide for the needs of seriously disabled ex-servicemen whose war-caused incapacities render them incapable of working other than part-time or intermittently.

At present, a sustenance allowance is paid where the nature of the treatment given for a war-caused disablement temporarily prevents an ex-serviceman from working. In the case of such an exserviceman receiving out-patient treatment, the sustenance allowance provided is at a rate of up to the 100 per cent General Rate of £6 per week. In future, where outpatient treatment extends over a period of four weeks or more, sustenance allowance may be paid at up to the Special (Totally and Permanently Incapacitated) Rate of £14 5s. per week.

These payments will be payable on the first pension pay-day after the necessary legislation has been passed. The estimated cost of these benefits, together with adjustments to service pension benefits consequential upon the decisions announced in the social service field, is £1,150,000 in a full year and £860,000 in 1965-66.

Superannuation and Defence Forces Retirement Benefits

Many requests have been made for further adjustments in existing pensions to ex-Commonwealth employees and members of the Forces under the Superannuation and Defence Forces Retirement Benefits Acts but the Government concluded that, in the context of this year’s Budget, it was not possible to provide a further general increase. However, the rates of children’s pensions under both Acts will be increased from £1 per week to £2 per week if the mother is alive, and from £3 per week to £5 per week if both parents are dead. The age limit for children’s pensions will also be increased, for children undergoing full-time education, from 16 years to 21 years.

Territories

The amount proposed for current expenditure in the Territories this year is £53,697,000 of which £12,802,000 is for the Northern Territory and £31,229,000 for Papua-New Guinea. Besides this, capital expenditure in the Territories is estimated at £32,891,000 including £22,613,000 in the Australian Capital Territory and £10,043,000 in the Northern Territory.

Total Commonwealth expenditure on the Territories will, therefore, amount to £86,588,000, an increase of £9,977,000 on 1964-65. The growth in the grant to the Papua-New Guinea Administration strikingly reveals the major contribution Australia is making to the development of that Territory and the well-being of its people. This year it will be £31,000,000, last year it was £28,000,000, and four years ago it was £17,300,000. Moreover, these particular figures do not take account of quite substantial expenditure in PapuaNew Guinea by various Commonwealth Departments. These other expenditures are now running at a rate of over £5,000,000 a year.

International Aid

From an important standpoint we may properly regard our expenditure on PapuaNew Guinea as belonging to the category of international aid since its purpose is to assist the Territory and its people towards the achievement of economic viability and political independence. Hence, taking our provision for the Territory this year along with estimated expenditure on various other forms of international economic aid, we may say that the total amount we are providing for such aid this year will be of the order of £50,860,000. The comparable figure last year was £47,904,000 and that included a special gift of wheat to India at a cost of £3,801,000.

Nowadays we are involved in many forms of international economic aid and our contributions to some of them are growing fast; for example, our subscription to the International Development Association will this year rise by £2,067,000 and our subscription to the Indus Waters Scheme by £546,000. We will also increase Colombo Plan aid by over £783,000 this year, it being our policy to do all we can to promote development in the Colombo Plan area.

When account is taken of both the quantity and quality of Australian aid, our record compares favorably with that of any other country. We are, for example, virtually the only country in the world which provides aid wholly in the form of grants. That is, I feel, a very important point. It means, for example, that, when Papua-New Guinea reaches independence, none of the assistance which we have provided to date will be treated as a debt requiring servicing or repayment. It is perhaps also worth noting that, even if we enter into no new aid commitments, our aid expenditures will continue to grow rapidly in future years. Nevertheless, although it will be impossible to meet all the requests for new aid which are now being made to us, we must stand ready to continue to play our part in assisting less developed countries, especially those in our own immediate area.

Defence Aid

Along with aid for economic development, the need to provide defence aid to the Malaysian area and Vietnam is also giving rise to increasing expenditure associated with the deployment of our own forces overseas and with the provision of defence aid of a material kind. Following a request by the Malaysian Government for additional aid to help build up its own defence forces, the Goverment has decided to extend the £3,000,000 programme of equipment and training assistance which was commenced last year. The new programme will involve aid of about £9,500,000 over the next two years and, added to the balance of the initial programme, will require expenditure of £5,871,000 in 1965-66. The Government believes that, together with the aid being provided by the United Kingdom, Canada and New Zealand, this new programme will be of considerable assistance to Malaysia in the strengthening of her defence capability. The separation of Singapore from Malaysia may require some adjustments in the implementation of the programme.

Capital Works and Services

Expenditure by the Commonwealth on its own capital works and services in this year is estimated to reach £218,297,000, an increase of £14,976,000 on last year.

For capital works of the Post Office we are providing a total of £90,000,000 of which £82,400,000 is for technical equipment and £7,600,000 for buildings and other construction. This represents a large increase of £10,318,000 over expenditure last year, but a prospering economy places high store on Post Office services and this creates an ever-enlarging demand for the necessary resources.

The amount to be provided for civil aviation facilities is £11,839,000, of which £2,600,000 is for technical equipment and £9,050,000 for construction. The total amount is £3,047,000 greater than expenditure in 1964-65. Development of the airports at Sydney and Tullamarine accounts for the greater part of the increase.

Developmental

I have mentioned the grants and advances, totalling £11,567,000, we are proposing to make to the States this year by way of Commonwealth contribution to a wide range of special developmental projects and also the amount of £14,238,000 which has been included for expenditure on rail standardisation works in South Australia and Western Australia.

We have had under consideration a number of further proposals from State Governments for Commonwealth assistance on developmental undertakings. Inevitably, we have had to consider them in the light of our general budgetary position, the state of the economy and the prospective heavy demand on resources. I may say here that the Commonwealth still has commitments totalling more than £90,000,000 on projects of this character it has previously undertaken to assist.

Nevertheless, we have decided to offer the Queensland Government a loan of up to £1,635,000 to finance harbour and town ship works at Weipa. These are governmental works ancillary to the bauxite enterprise in that outlying region. When details of the arrangement have been agreed with the Queensland Government, legislation will be brought down. Meanwhile an amount of £750,000 has been included for the purpose in the estimates. This will increase expenditure on special develop mental and railway projects in the States in the current year to £25,805,000.

Beef Roads

This special developmental expenditure includes provision for payments of £2,750,000 to Queensland and Western Australia under the present arrangements for financing beef roads in those two States. This amount includes £750,000 for Western Australia, which will be the last payment under the existing agreement with that State. For Queensland, estimated payments of £2,000,000 in 1965-66 will leave approximately £300,0,00 available to the State of the total of £8,300,000 covered by the existing agreement. The total amount expended by the Commonwealth under the beef roads programme to the end of June 1965 was £11,631,000. These roads have already produced good dividends by enabling cattle to be marketed at younger ages and in better condition and also by facilitating the movement of cattle from drought affected areas.

However, we do not mean this to end the Commonwealth Government’s participation in this important field of activity. In fact, the Government has under examination a report on the future of the beef roads programme recently prepared by the Northern Division of the Department of National Development. In due course, we will expect to hold discussions with the States about various aspects of the future programme.

A sum of £1,150,000 is also being provided this year for the continuation of the Northern Territory beef roads scheme. This scheme now includes the provision of a sealed road from Katherine to Top Springs, the first stage of which, Katherine to Willeroo, was commenced last year. This year, the final stage of this important link, Willeroo to Top Springs, will be commenced. The whole road is expected to cost about £1,600,000.

Oil Search

The approved programme of new commitments to be entered into for payment of subsidy under the Petroleum Search Subsidy Act was £5,500,000 for 1964-65. This programme, together with commitments brought forward from previous years, resulted in a cash expenditure in 1964-65 of £4,419,000. Expenditure by petroleum exploration companies continues to rise strongly and a continuation of subsidy payments on the existing basis involves a substantial increase in the Commonwealth’s liabilities. Nevertheless, it has been decided to maintain the present unit rates and standards of eligibility of subsidy payments and, in addition, to remove the limit of £100,000 on subsidy payments for any one drilling operation. As a consequence, the subsidy programme in 1965-66 will be raised to £7,000,000 and it is estimated that cash expenditure this year will be £5,700,000.

Petroleum Products Prices

The date of bringing into effect the petroleum products prices subsidisation scheme is dependent on the passage of State legislation, but for the purposes of the Budget we have estimated that it will come into operation by 1st October next. An amount of £4,270,000 has been included in the Budget to cover expenditure under the scheme this year.

Royal Flying Doctor Service

For many years now the Commonwealth Government has been giving financial support to the Royal Flying Doctor Service, whose work in inland Australia commands such wide admiration. In recent years, this has amounted to a subsidy of £95,000 a year. The Government has decided to increase the subsidy to £140,000 a year for the three years commencing 1st July last. Of this subsidy, £65,000 a year will be payable on a £ for £ basis as a capital grant and the balance of £75,000 a year will be a contribution towards operational expenditure.

Industrial Design Council of Australia

We also propose to increase the financial assistance the Commonwealth has been giving to the work of the Industrial Design Council of Australia. For 1965-66 there will be a base grant to the Council of £20,000 and a further £15,000 will be available for matching on a £ for £ basis donations from sources other than the

Commonwealth. We will also make a special grant of £10,000 to help meet the cost of establishing a design centre in Sydney which the Council plans to open during 1965-66.

State Works and Housing Programmes

At the meeting of the Loan Council in June, the Commonwealth undertook, subject to certain conditions, to support borrowing programmes for State works and housing this year amounting to £295,000,000. This means that, in the event of loan raisings for the year falling short of that amount, which seems likely, the Commonwealth will be prepared to consider making up the difference from its own resources.

Total Expenditures

Added together, these various commitments on our own account and on behalf of the States total £2,667,030,000. That figure does not include prospective debt redemptions which I will discuss presently. Details of estimated expenditures are set out in Statement No. 3 attached to the Budget Speech.

page 38

REVENUE AND OTHER RECEIPTS

Last year we had almost everything in our favour in point of revenues. Through 1964-65, employment and earnings rose strongly and that made for high pay as you earn collections and pay-roll tax receipts. The big increase in imports swelled the yield of customs duties. Excise and sales tax revenues rose with increasing sales of goods subject to those taxes. Besides this, income tax assessments based on 1963-64 incomes drew upon the relatively high incomes derived in that year by primary producers, companies and business in general. Then, of course, there were in the Budget certain increases in taxes and charges. We estimate them to have brought us an additional £80,000,000 or thereabouts of revenue. In all, Commonwealth receipts for the year were £317,311,000 greater than those of 1963-64.

We could hardly expect to do as well again this year from existing revenue sources. Employment is not likely to rise as much as it did last year because there simply will not be as much additional labour to employ. Average earnings are already high. They will rise to some extent though not, I should think, as much as in 1964-65. Farm incomes fell quite heavily last year and that will affect revenues this year from tax assessed on those incomes. Almost certainly, company incomes rose less in 1964-65 than in 1963-64. Again, in our reckoning there will be a much smaller increase in imports and sales of goods subject to excise and sales tax may not show as big an increase.

Nevertheless, we can count on obtaining fairly substantial additional revenues from taxation, business undertakings and various other sources. We estimate that, on current rates and charges, there should be an increase of about £183,990,000 in taxation revenue and an increase of about £41,045,000 in other receipts. Thus total receipts would be approximately £225,035,000 above those of 1964-65.

Taking overall expenditure commitments, other than for debt redemptions, at £2,667,030,000 and total receipts at £2,538,975,000, the excess of such expenditures over receipts other than loan raisings would be £128,055,000. That amount would have to be covered by borrowings in one form or another.

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LOAN RAISINGS AND REDEMPTIONS 1965-66

The possibilities of raising loan money, either at home or abroad, have deteriorated very considerably since the performance of 1963-64 when our total loan proceeds were £317,387,000. Last year, they were £255,602,000, which was a fall of £61,785,000 on the year before, and we also had very heavy redemptions of debt to meet

This year, with diminished liquidity, it seems probable that the amount of local loan raisings will be smaller again, while the chances of borrowing any substantial amount abroad are not to be rated highly. So many factors can influence the result that estimates in this field can never be very secure. However, subject to this, we have decided to use for budgetary purposes a figure of £210,000,000 for loan raisings in 1965-66. Redemptions, on the other hand, could be rather less than last year when they totalled £158,350,000; we are putting the amount at £135,000,000. Net loan raisings on this basis would be about £75,000,000 compared with £97,252,000 in 1964-65.

On our figuring to this stage, therefore, the total of revenue and net loan raisings from the public would fall £53,055,000 short of meeting estimated cash outlays. Unless otherwise removed, this deficiency would have to be financed by temporary borrowings - largely if not wholly from the Reserve Bank.

page 39

THE BUDGET AND THE ECONOMY

In outline, then, this is the budgetary picture in terms of expenditure commitments, prospective revenues from existing taxes and charges and such forecast as we can make of net loan raisings. Compared with the outcome of our last Budget, there would be a very large rise in expenditures, a smaller though substantial increase in revenues and other receipts and an overall deficiency of £53,055,000 compared with a surplus of £18,872,000.

Necessarily, we must consider this budgetary situation and the question of what should be done about it in relation to the broad trend of our economy over the coming year. I feel that I should point first to certain features of the situation abroad which could conceivably have an adverse effect on our fortunes. Of direct and immediate concern to us is the political and military situation to the north now centred on the conflict in South Vietnam, but involving not only the countries of that general region but also, directly and indirectly, several of the world’s great powers. On the economic side, there appears to be some tendency for growth to slow down in a number of the major industrial countries and that could mean a slowing down in the growth of world trade. Once again the terms of trade have turned heavily against the primary producing countries and already a number of them are in grave balance of payments difficulties. Through measures taken by the

United States and United Kingdom Governments to strengthen their currencies, there has been a sharp check to the international flow of capital for investment in many parts of the world. Furthermore, we are not as yet within sight of any solution to the great problem of international liquidity. I do not want to paint too dark a picture and I certainly do not overlook the various strong underlying forces making for world economic expansion. Yet we are, after all, very largely and widely engaged in world trade and commerce and that makes our economy highly responsive to changes abroad. It is always necessary to be alert for such changes and to look ahead as to the effects they could have upon us.

As I said earlier, our home economy has been and still is running at full pitch, with little if any current labour resources to spare. But this does not preclude a further growth of output. Again this year there will be a substantial addition to our work force - partly from local increase and partly from immigration. But it seems most unlikely that employment could rise by as much as it did last year or the year before that, because unemployment is now very low indeed and a considerable part of the so-called fringe labour has already taken up work. The increase in employment could be of the order of 3.5 per cent, as against 4 per cent, last year.

For this reason, if for no other, it is to be expected that the overall rise in national output will be rather smaller this year. Certain other factors are working in the same direction. For example, drought in New South Wales and Southern Queensland is bound to cut back rural output quite significantly.

What, on the other hand, is likely to be the trend of demand this year? Through 1964-65, as we have seen, it rose a good deal faster than domestic output.

With increasing employment and incomes, we can be sure that consumer spending will continue to increase and that, of course, is by far the largest element in total spending.

In the area of private capital expenditure, dwelling construction and purchases of motor vehicles have levelled off though, of course, at a very high level. Farm investment has undoubtedly fallen to some extent. The indications are, however, that expenditure on industrial and commercial building and construction and on factory plant and equipment will continue to rise.

Public authority expenditure, on both current and capital accounts, will certainly rise a good deal - mainly in the Commonwealth area but to a significant extent also in the field of State Governments. Not all of this additional expenditure will constitute demand for goods and services within Australia - some part of it will be spent overseas. But the direct local effect will be very sizable and, of course, such additional spending adds to incomes and leads to further spending. On the other hand, taxation even on existing scales will take part of the increase in incomes which occurs through the year and this will tend to reduce the expansive effect of higher governmental spending. Since, however, it would take only part of the increase in incomes, it would be only a partial offset. The effect the Commonwealth Budget would have from this standpoint has been analysed on a national accounting basis and the results are shown in Statement No. 6 attached to the Speech. I suggest that this analysis will repay study.

There can be no certain or precise forecasts on a situation like this and yet, on an overall view of the prospects, it seems probable that there will be a fairly strong lift in expenditure - not as great as last year perhaps but almost certainly exceeding any practicable increase in domestic output. Proportionately, governmental expenditure will contribute more to this increase than any other class of spending.

The implications this has for economic policy are plain enough. All through last year the strong tendency was for demand for goods and services to out-run supplies to be had in Australia. The results were, as I have said, that total productive resources came under heavy pressure and there was a big additional call on imported supplies.

That is not a situation we would want to go on for too long. Internally, there has been a fairly strong and continuous rise in costs and, although this has not shown up in the final prices of goods as much as might have been expected, the rise in these prices has been greater than we would normally wish to see.

Nor would we wish to see a further large rise in imports, the level of which is already very high. Indeed, some falling back in the rate of importing would be welcome. Fortunately, we still have strong overseas reserves but the disturbed state of the international economy must raise doubts as to export possibilities. We have made notable gains there in recent years, increasing the volume of our exports very considerably, diversifying their pattern and achieving a better spread of market outlets. But commodity prices are always very much at the mercy of world events and we can never be sure from one year to the next what the trend will be. On present indications, our exports this year will be less than last year - by how much it is not possible to say. What amount of private capital we will receive from abroad is, again, problematical. On the prospect as a whole, however, it seems fairly certain that there will be a further reduction pf our overseas reserves, possibly a substantial reduction.

For these several reasons, then, it seems desirable that there should be some moderation of the rate of increase in overall demand and certainly an avoidance of anything which would make for a stronger increase in demand - as the Commonwealth Budget with its expectionally large addition to expenditures could very well do. We are, of course, not unaware of factors, such as reduced monetary liquidity and the fall in farm incomes, which are likely to have a steadying effect on demand; and we are concerned, as we always are, to ensure that there will be sufficient strength of demand to keep industry running at full capacity and to absorb whatever additional labour comes forward. But we judge that there is sufficient impetus in the economy to provide for this without any strong stimulus from the Budget.

page 41

TAXATION

Accordingly, on both financial and economic grounds, we feel that some further increase in taxation is necessary and I shall now explain the measures we have in view.

Income Tax

First, as to income taxation, because of the change-over to decimal currency next year it will be necessary to adjust the existing rates of income tax so that they will be readily convertible from their present form to dollars and cents. This adjustment will be made so that the tax payable under the adjusted scale of rates will not, in any case, differ significantly from that which would be payable under the existing rates.

We have, however, also decided that income tax payable by individuals should be increased by 2£ per cent. The increase, which will apply to income of the current year 1965-66, will be in the form of an addition of 6d. in the £ of the tax calculated at the scale rates.

It is proposed also to revise the tax instalment schedules so that they too will be exactly convertible to dollars and cents when the change-over to decimal currency comes into force. At the same time, the additional levy of 2i per cent, will be included in the amounts of instalments. The new rates of instalment deductions will come into operation on the first pay-day on or after 1st October next. The provisional tax for 1965-66 will also be adjusted appropriately.

It is estimated that the increase in income tax will result in additional revenue of £18,900,000 in a full year and £17,800,000 in 1965-66.

While speaking of income taxation I may mention that the service pay and allowances of members of the Defence Forces serving in Vietnam and Borneo are to be exempted from income tax. Generally, the period of exemption will commence when the member leaves Australia for service in an operational area and terminate when he returns to Australia. This exemption will first apply as from 1st July 1965.

It will be remembered also that in 1964-65, the remuneration for part-time duty of members of the Citizen Forces was exempted from income tax. We now propose to extend a corresponding exemption to the pay and allowances, including bounty and call-up gratuity, of members of the Defence Forces Emergency Reserve.

The cost of these concessions is estimated to be £230,000 in a full year and £80,000 in 1965-66.

Customs and Excise. PETROLEUM PRODUCTS.

The rates of customs and excise duties on petrol, automotive distillate, aviation gasolene and aviation turbine fuel will be increased by approximately 3d. a gallon. I should like to make a point or two here on the subject of petrol taxation. Even after the proposed increase in duty to 14.76d. per gallon, petrol will be taxed lightly in Australia compared with other countries. For instance, in the United Kingdom, the tax on petrol is 48.75d. per gallon. Clearances of petrol in Australia have risen from about 93 gallons per head in 1954-55 to an estimated 148 gallons per head in 1964-65.

The proposed increases have been varied slightly from 3d. in the case of petrol (3.01d.), aviation gasolene (2.984d.) and aviation turbine fuel (2.98d.) to ensure that the new rates on conversion to dollars and cents will not produce more than two places of decimals of cents. The increases, which will come into effect immediately, are expected to yield an additional £25,060,000 in a full year and £21,890,000 in 1965-66.

page 42

BEER

The rates of excise and customs duty on beer will be increased by ls. 6id. per gallon, which is broadly equivalent to an increase in duty of something over Id. for a 10 oz. glass. This increase, the first since 1956, will take effect immediately and will produce an overall rate of excise duty which, on conversion to decimal currency, will give a convenient rate in dollars and cents. The increase is expected to produce an estimated £20,900,000 in a full year and £16,560,000 in 1965-66.

page 42

SPIRITS

The rates of customs and excise duties on spirits were last increased in 1956. We now propose they be increased by £1 Us. a proof gallon. This is equivalent to an increase in duty of slightly more than lid. a nip. The increase will apply uniformly to all spirits so that the existing special margin of about £1 10s. per proof gallon in favour of brandy will be undisturbed. The additional revenue from these proposals, which will take effect immediately, is estimated to be £6,420,000 in a full year and £5,390,000 in 1965-66.

page 42

TOBACCO PRODUCTS

Rates of customs and excise duties on cigarettes will be increased by 4s. lid. a pound, on cigars by 4s. lOd. a pound and on manufactured tobacco by ls. 11.8d. a pound. The increases, which will have immediate effect, are approximately equivalent to an additional 3d. duty on a packet of 20 larger cigarettes or on a 2-oz. packet of tobacco. The increase in duty is, of course, less than 3d. on a packet of 20 smaller cigarettes. The resultant rates of duty will convert conveniently to dollars and cents. The additional revenue from these proposals is estimated to amount to £13,300,000 in a full year and £10,700,000 in 1965-66.

page 42

TOTAL CUSTOMS AND EXCISE

Altogether, additional revenue from the proposed increases in customs and excise duties is estimated to amount to £65,680,000 in a full year and £54,540,000 in 1965-66.

Lighthouse Does

It has been decided to increase the rate of lighthouse dues payable by ship owners from ls. 3d. to ls. 6d. per net registered ton as a means of obtaining a greater contribution by ship-owners towards the cost of providing and maintaining coastal lights and other aids to navigation. It is estimated that this increase will result in additional revenue of £200,000 in a full year and £150,000 in 1965-66.

Air Navigation Charges. The Government has considered again the situation arising from the increasing annual cost of providing, maintaining and operating airport and airways facilities. The assessed cost was £19,600,000 in 1964-65 and could reach £21,000,000 in 1965-66. Recoveries from the users of these facilities by aif navigation charges amounted to £2,300,000 in 1964-65 and, at the same rates of charge, would be a little over £2,600,000 in 1965-66. It thus becomes all too evident that the gap between costs and recoveries is increasing year by year. The Government has affirmed as a general line of policy that it will seek to eliminate the gap and, as a further step in this direction it has decided to increase by 10 per cent, the rates of air navigation charges payable by all users. These increases, which will take effect from 1st January, 1966, are estimated to bring in £60,000 in 1965-66 (because of their application for only six months and an unavoidable lag in accounting) and £240,000 in a full year, over and above increased revenue because of greater flying activity. An increase of this order will clearly make only a small contribution towards closing the wide gap between costs and revenues and it is, therefore, proposed to explore the possibility of taking further action for this purpose during the course of the year.

Australian Capital Territory

With the growth of Canberra as a city and as a business centre, we think it would be no more than fair and proper that residents of Canberra should bear certain taxes of a nature comparable with those levied on residents of the States. Accordingly, the Government has decided to introduce stamp duty upon a range of instruments and transactions completed or made in the Australian Capital Territory. The new duties, which will apply inter alia to cheques, promissory notes, conveyances, hire purchase transactions and so on, will be introduced next year, thus allowing time for drafting of the necessary legislation and establishment of the administrative machinery that will be necessary.

Following its review of the general level of charges in Canberra for the equivalent of municipal and other services, the Government has come to the conclusion that some increases, including increased hospital charges, will be necessary. These will be the subject of further examination.

Total Taxation

In total, the variations in taxation and other charges I have announced are estimated to bring in an additional net amount of £72,470,000 in 1965-66 and £84,790,000 in a full year. Total receipts from revenues and other sources will therefore become £2,611,445,000.

page 43

BUDGET SUMMARY

If, as estimated, receipts other than loan raisings reach a total of £2,611,445,000 and expenditures total £2,667,030,000, the amount to be met from borrowings will be £55,585,000. This would be £22,795,000 less than the sum that had to be borrowed in 1964-65. However, net loan raisings are tentatively estimated at £75,000,000. That is to say, they would exceed by £19,415,000 the £55,585,000 by which receipts other than borrowings are expected to fall short of expenditure. This £19,415,000 would represent a cash surplus for the year. The comparable amount in 1964-65 was £18,872,000.

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CONCLUSION

Current times present an exceptionally strong challenge to economic and financial management. It is difficult enough under ordinary conditions to preserve a balanced situation - to ensure that while the economy runs along at or about an optimum level of activity it does not generate excessive demands on resources domestically, forcing prices up and swelling the flow of imports. But present conditions are far from ordinary. It happened that our economy had reached virtually full employment when the need arose to step up defence preparations and the expenditures that go with them very substantially indeed. It has happened also that various large industrial and mining enterprises are in the full tide of expansion. These further demands have been superimposed on a resources situation already strained. Clearly there are dangers in all this - serious dangers of disruption and instability. But we do not see these as unavoidable dangers. We believe that with moderate though firm restraint, the economy can be brought through without disruption or instability and without needless loss of impetus to expansion.

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STATEMENT No. 1. - BUDGET RESULTS, 1964-65. PART A. - SUMMARY

In 1964-65, the excess of Commonwealth expenditures, other than redemptions, over receipts to be met from borrowings declined by £119,517,000 because, although total Commonwealth expenditures rose by £197,794,000, total Commonwealth receipts increased by £317,311,000. In the following table the results of the Commonwealth's financial transactions for 1964-65 are compared with results for the preceding financial year. Total expenditures, other than redemptions, increased by £197,794,000 to £2,392,320,000 in 1964-65. The main increases in expenditure in 1964-65 over expenditure in 1963-64 were: - Total receipts of the Commonwealth amounted to £2,313,940,000 in 1964-65, or £317,311,000 more than in 1963-64. Of this increase, £210,510,000 came from income tax collections from companies and individuals; increases in other taxation collections accounted for a further £69,292,000. Receipts of Business Undertakings increased by £24,085,000, and the income of the National Debt Sinking Fund by £6,795,000. The net increase in other balances in 1964-65 was £6,115,000 greater than in 1963-64. It is estimated that the revenue measures introduced in the 1964-65 Budget accounted for about £80,000,000 of the total increase in receipts in 1964-65. Other factors were the big rise in collections from P.A.Y.E. instalments and the large increases in the incomes of companies and individuals in 1963-64 which were assessed to tax in 1964-65 (see page 48). A detailed comparison of actual expenditures and receipts in 1964-65 with the Budget estimates for that year is given in Part B of this Statement. Gross cash proceeds of loans amounted to £255,602,000 for the year, a decline of £61,785,000 on the preceding financial year. As expenditure on redemptions rose by £66,526,000 to £118,350,000, loan proceeds net of redemptions for the year fell by £128,311,000 to £97,252,000. The generally tighter monetary conditions prevailing in 1964-65 which arose in part from the decline in Australia's overseas reserves accounted in the main for the decline of £96,798,000 in net loan proceeds in Australia. There was also a decline of £31,513,000 in net proceeds of overseas loans. Further details of the various loan transactions of the Commonwealth during 1964-65, including a reconciliation of the cash figures in the Budget with the Loan Council figures, are given in Part C of this Statement. Although there was a decline in net loan proceeds, the amount available, £97,252,000, exceeded the excess of expenditures over receipts to be met from borrowings by £18,872,000. In consequence, there was a net reduction of £17,069,000 in Treasury Notes and Treasury Bills outstanding and an increase of £1,803,000 in cash balances. The Consolidated Revenue Fund was balanced after the payment of £111,372,000 to the Loan Consolidation and Investment Reserve, where this amount was applied towards meeting commitments outside the Consolidated Revenue Fund. The following table sets out in summary form the relationship between Consolidated Revenue Fund transactions and other transactions of the Commonwealth in 1964-65. Total expenditure amounted to £2,392,320,000 in 1964-65, which was £6,253,000, or 0.26 per cent., greater than had been estimated in the Budget. The main variations from the Budget estimates may be analysed as follows: - Defence Services. - Expenditure on Defence Services exceeded the Budget estimate by £7,687,000, of which £3,841,000 was attributable to the purchase of additional aircraft for the R.A.A.F. and the R.A.N. Expenditure on arms, armament and equipment for the Army was £2,500,000 greater than estimated, the cost of buildings, works, fittings and furniture for the Army was greater by £2,058,000, and general expenses for all Departments in the Defence Group were £2,057,000 greater than estimated. Expenditure on naval construction was less than estimated by £2,001,000; on equipment and stores required by the R.A.A.F., by £1,693,000; on Defence Aid to Malaysia, by £380,000; and on buildings, works, fittings and furniture for the R.A.N., by £209,000. Payments to or for the States. - Payments to or for the States were £3,820,000 less than estimated in the Budget. Expenditure on rail standardisation projects fell short of the Budget estimate by £3,901,000; on contributions towards capital expenditures by the States for medical health institutions by £518,000; on brigalow lands development by £435,000; and on Queensland beef cattle roads by £410,000. Payments to the States for universities were £1,637,000 greater than had been estimated - the net result of an increase of £2,355,000 in grants for recurrent purposes following the adoption of the recommendations in the Eggleston Report on Academic Salaries and a shortfall of £718,000 in grants for capital works and equipment. Payment to National Welfare Fund. - The payment to the National Welfare fund was £6,970,000 less than the Budget estimate. Expenditure on the new Homes Savings Grants Scheme was £4,325,000 less than estimated; on Unemployment and Sickness Benefits, £1,430,000 less; on Age and Invalid Pensions £1,371,000 less; on Medical Benefits, £762,000 less; on Tuberculosis Medical Services and Allowances, £556,000 less; and on Medical Services for Pensioners, £390,000 less. Expenditure on Child Endowment, Widows' Pensions and Pharmaceutical Benefits for Pensioners were, respectively, £715,000, £592,000 and £372,000 greater than estimated. Other Special Appropriations. - Expenditures under Other Special Appropriations exceeded the Budget estimate by £879,000. Expenditures totalling £11,161,000 resulted from two drawings by India, each the equivalent of SUS12,500,000, in Australian currency from the International Monetary Fund during the year - no provision had been made for them in the Budget. Because wool prices during 1964-65 were lower than expected, payments for wool promotion purposes under the Wool Industry Act 1962-1964 were £2,826,000 less than estimated. No payments were made under the Petroleum Products Prices Scheme; provision was made for expenditure of £3,003,000 in the Budget estimates. There were no payments in 1964-65 under the Dried Vine Fruits Stabilisation Scheme, for which purpose £800,000 was included in the estimates. Expenses associated with the forthcoming conversion to decimal currency were £3,720,000 less than the Budget estimate; payments to the Indus Basin Development Fund were less by £431,000. Departmental. - Departmental expenditure exceeded the Budget estimate by a total of £10,185,000, of which £2,029,000 related to administrative expenses (salaries and other costs) and £8,156,000 to other services. The latter arose mainly for expenditure of £3,801,000 on the emergency gift to India of 150,000 tons of wheat, for which no provision was made in Budget. The cost of assisted migration was £2,431,000 greater than the Budget estimate, because of a post-Budget decision to increase further the rate of British migration to Australia. Expenditure by the Australian Shipbuilding Board on the construction of ships exceeded the Budget estimate by £824,000. State works and housing programmes. - At its meeting in July, 1964, the Loan Council approved a governmental borrowing programme for 1964-65 of which £290,000,000 was for State works and housing. State domestic raisings were estimated to amount to £7,000,000, leaving an estimated £283,000,000 to be met from Commonwealth borrowings. As State domestic raisings in 1964-65 yielded £10,322,000, the amount for State works and housing met from Commonwealth borrowings was, in fact, £279,678,000. Total receipts of the Commonwealth, at £2,313,940,000, were £59,359,000 greater than the Budget estimate - a variation of 2.6 per cent. This was mainly because income tax collections from individuals and companies were considerably greater than estimated. The largest single factor in the difference between estimated and actual results was an under-estimate of the incomes of individuals and companies in 1963-64 which would be assessed for tax in 1964-65. There was an under-estimate also of the value of estates that would be assessed for duty and an over-estimate of tax instalment refunds in 1964-65. These differences were, in summary: - When the 1964-65 Budget was being prepared, it was estimated, on the basis of the data then available, that the 1963-64 incomes of individuals subject to provisional tax had risen by about 11 per cent, in that year, or at about the same rate as in the year before. It now appears that there was an increase of close to 17 per cent, in these incomes in 1963-64. In consequence, collections of tax from these taxpayers were £21,762,000 greater than had been estimated in the Budget Allowance had been made, on the basis of previous experience, for PA.Y.E. refunds of about £115,000,000 in 1964-65. The proportion of instalment deductions in 1963-64 that became refundable on assessment in 1964-65 proved to be somewhat less than in other years and, in consequence, the estimate of refunds was too high by £4,130,000. Collections from company tax in 1964-65 were under-estimated by £8,522,000. Of this amount, about £5,800,000 resulted from an under-estimate of company incomes in 1963-64. The remainder was due to a small under-estimate of the rate of actual collections in 1964-65. The main element in the income tax estimates which involves projection into the future is the amount of P.A.Y.E. collections to be deducted from salary and wage incomes. At the time the Budget was prepared, it was estimated that the increase in average earnings would be 6 per cent, and the increase in average employment, 3.75 per cent.; the actual increases proved to be about 7 per cent, and about 4 per cent., respectively. As a result, the yield of gross P.A.Y.E. collections was £13,739,000 greater than the Budget" estimate. Other items of revenue were relatively close to the Budget estimates. In particular, collections of indirect taxes - customs duty, excise duty and sales tax- were, in aggregate, a net £1,748,000 greater than had been estimated. Other Revenue, with consists of a large number of separate components (see Item No. 24 in Statement No. 3) was £2,887,000 greater than had been estimated. {: .page-start } page 48 {:#debate-50} ### PART C - LOAN RAISINGS AND REDEMPTIONS {: .page-start } page 48 {:#debate-51} ### LOAN RAISINGS During 1964-65, subscriptions to the four Commonwealth public cash loans in Australia, after allowing for discounts in the issue price and including advance subscriptions received before 1st July 1964 were £206,759,000. The issue of Special Bonds. - Series J was discontinued in August 1964, and that of Series K. in April 1965 when Series L was introduced. Proceeds of Special Bonds during the year were £43,733,000 and Special Bonds presented for redemption in 1964-65 amounted to £17,638,000. Net proceeds from Special Bonds during the year were £26,095,000. The only public cash loan raised overseas in 1964-65 was issued in May 1965. This loan was denominated in United States currency and raised mainly in Europe. It was for an amount of $US25,000,000 and yielded proceeds of £11,054,000. Details of new loans raised in Australia and - overseas during 1964-65 may be found in Table No. 17 of the White Paper " Government Securities on Issue at 30th June 1965 ". The amount available for public loans raised in Australia and overseas during the year, £243,908,000, fell short of the amount required to meet the Commonwealth's commitments in respect of State works and housing programmes, redemptions and advances to the States for War Service Land Settlement. The Commonwealth, therefore, subscribed a special loan from the Loan Consolidation and Investment Reserve, the cash proceeds of which amounted to £66,900,000. The amounts referred to above do not correspond with the figure of £245,027,000 given in Part A of this Statement as the cash receipts from public loans, &c, during the year. The main reasons are that cash receipts from public loans in 1964-65 exclude advance subscriptions brought forward from the previous year but include those received up to 30th June 1965, in respect of the first cash loan to be issued in 1965-66. Moreover, some of the special Bonds presented for redemption in 1964-65 were not, in fact, charged against the Budget until July 1965. The cash receipts figures are also net of expenses incurred during the year in raising loans. The amounts borrowed by the Commonwealth in 1964-65, and the amounts available form these borrowings to meet payments to the States in respect of their works and housing programmes and War Service Land Settlement, and expenditure on redemptions, are summarized in the following table:- Drawings on the International Bank loan for the Snowy Mountains Hydro-electric Scheme totalled £10,575,000 in 1964-65. Drawings exceeded expenditure on the Scheme charged to Loan Fund by £775,000, so that there was a corresponding increase in Loan Fund balances on this account. This arose from differences in timing between expenditures and drawings against the loan. Treasury Notes, which were first issued in July, 1962, continued on daily issue throughout 1964-65. The amount outstanding reached a peak of £217,791,000 in March, 1965. On 30th June, 1965, the amount outstanding was £40,216,000, or £36,069,000 less than a year earlier. In November, 1964, the Commonwealth raised a private loan in New York for aircraft financing purposes on behalf of Qantas Empire Airways Limited and the Australian National Airlines Commission (T.A.A.) for $US30,000,000 (£13,339,000), which is to be drawn by 15th March, 1966. During 1964-65, $US38,75O,00O (£17,429,000) was received as a result of drawings on this and three other loans which had been arranged on behalf of Qantas and T.A.A. since March, 1963. These proceeds were paid over in their entirety *to* Qantas and T.A.A. {: .page-start } page 49 {:#debate-52} ### REDEMPTIONS It was estimated in the Budget for 1964-65 that expenditure on redemptions of securities maturing in Australia during the year, on repayments due) in respect of loans repayable by instalments, on market repurchases of securities for cancellation, and on other redemptions of overdue securities, &c, would total £125,000,000. This estimate made no allowance for redemption of any of the debt maturing in London during the year, which it was then expected would be converted in full. In the event, total expenditure on redemptions, &c, in 1964-65 amounted to £158,350,000, including £15,867,000 for redemption of the maturing London debt. Securities with a face value of £359,347,000 matured in Australia during 1964-65. The Commonwealth made two offers to holders of these securities to convert them into new Inscribed Stock or Bonds, or into Special Bonds. Securities totalling £252,676,000 were converted, of which £15,505,000 were converted into Special Bonds. At 30th June, 1965., a total of £1,389,000 of these securities was still outstanding. The balance of £105,282,000 was redeemed. Proceeds of public cash loans issued during the year were used to meet £15,000,000 of these redemptions; the remaining £90,282,000 were financed from the) National Debt Sinking Fund. In addition to redemption of these maturing securities, the National Debt Sinking Fund spent a total of £13,017,000 in 1964-65 on market repurchases and redemptions of overdue securities, &c. in Australia. A loan of £stg12,656,000 matured in London in May, 1965, and was repaid in full at a cost of £15,867,000. Qf this amount £12,538,000 (£stg10,000,000) was financed out of part of the proceeds of the cash loan which was raised in Australia during April. The remaining £3,329,000 (£stg.2,656,0O0) was redeemed by the National Debt Sinking Fund. Repurchases in London, mainly of 3i per cent. September, 1966 and 3) per cent. August, 1969 stock, and other redemptions, involved expenditure of £7,596,000. Repurchases and redemptions by the Sinking Fund in New York and Canada were made at a cost of £7,202,000. In addition, an amount of £250,000 was spent from tha Canadian Loan Trust Account on contractual repurchases of Commonwealth Bonds issued in Canada, as a result of which securities with a face value of $Can628,000 were repurchased and cancelled. Repayments to the International Bank, which were made at a cost of £7,202,000. In addition, £9,136,000 ($US20,326,000) in 1964-65. Details of total expenditure on redemptions (other than redemptions of Special Bonds, which as previously mentioned were offset against gross proceeds from Special Bonds) in 1964-65 are summarised in the following table. In addition to the redemptions recorded above, Inscribed Stock and Bonds issued on account of the Commonwealth in Australia were reduced by £5,550,000 (face value) at a cost of £5,539,000 through the operations of the Loan Consolidation and Investment Reserve. Medium and long term securities held by the Reserve were exchanged for early maturing securities held elsewhere, which were then cancelled. A small amount of £14,000 of Commonwealth instalment stock, issued .in 1929 and 1930 under the Seat of Government Act, was also redeemed from Consolidated Revenue Fund in 1964-65. Summary tables showing the various changes during 1964-65 in the amounts of Government Securities on issue in Australia and overseas are contained in the White Paper "Government Securities on Issue at 30th June, 1965 ". Statement No. *2.* - Summary of Budget Prospects, 1965-66. A further substantial increase seems certain to occur in Gross National Expenditure in 1965-66, although it is not expected to be as large as the 13 per cent, increase which occurred in 1964-65. The increase in employment in 1965-66 is not expected to be as great as in 1964-65. Although the number of migrant workers coming into Australia this year may be greater than last year, there will be considerably less scope for the reduction of unemployment, for the deferral of retirements and for drawing "fringe" workers into the work force. The increase in average earnings seems likely te be smaller than in 1964- 65. Total wage and salary earnings are, therefore, expected to rise less rapidly in 1965-66 than in 1964-65, and this expectation is reflected in the Budget estimates of " pay-as-you-earn " instalment deductions and collections of pay-roll tax in 1965- 66. A lower rate of growth in salary and wage incomes and a decline in farm incomes in 1965-66 would suggest a slower rate of growth in total personal incomes than in 1964-65 and a slower rate of increase in consumption expenditure. Consequently, collections from indirect taxes - sales tax and customs and excise duties - (at existing rates) could not be expected to increase as fast as in 1964-65. It is estimated that the total increase in Commonwealth expenditures, other than redemptions, in 196S-66 will be £274,710,000. This is the largest increase ever in Commonwealth expenditures; in addition to substantially increased defence spending, it allows for sizable increases in payments to or for the States and for extensions to social service and repatriation benefits. The main elements of the estimated increase are - The estimated increase of £81,430,000 to £385,921,000 in expenditure on Defence Services includes provision for an increase of £4,183,000 in Defence Aid to Malaysia in 1965-66. Payments to or for the States and State works and housing programmes are expected to increase by £69,724,000 to the very large total of £837,640,000. Of this estimated increase, £36,873,000 is expected to arise as a result of tha new arrangements relating to the financial assistonce grants agreed at a Premiers' Conference held in June, 1965. State works and housing programmes (after allowing for State domestic raisings) are expected to be £8,322,000 greater than in 1964-65. Expenditure on railway projects is estimated to be £6,860,000 greater in 1965-66 than in 1964-65. Special grants to be paid to Western Australia and Tasmania on the recommendation of the Commonwealth Grants Commission will be £5,025,000 greater, and Commonwealth aid road grants £5,000,000 greater than in 1964-65. Expenditure on National Welfare Fund benefits and repatriation services is estimated to rise by £38,909,000 to £598,758,000 in 1965-66. This increase allows for the extensions to social service and repatriation benefits announced in the Budget Speech, estimated to cost an additional £6,040,000 in the current financial yeaar. The balance of the increase will result from growth in the numbers of beneficiaries and the full-year effects of the additional social service and repatriation benefits which were introduced in the 1964-65 Budget, but which applied for only part of 1964-65. Expenditure on Other Special Appropriations is estimated to increase by £40,876,000 to £106,277,000 in 1965-66. Expenditure on the introduction of decimal currency is estimated to cost an additional £13,086,000 and expenditure on the Wheat Industry Prices Stabilisation Scheme is estimated to be £8,654,000 greater than in 1964-65. Initial payments under the scheme to reduce the prices of petroleum products in country areas and the Poultry Industry Assistance Act 1965 are expected to amount to £4,200,000 and £3,600,000, respectively. Detailed explanations of the 1965-66 estimates of expenditures are set out in Statement No. 3. It is estimated that receipts from taxation and other charges, if levied at existing rates, would amount to £2,538,975,000 in 1965-66, or £225,035,000 more than in 1964-65. This would be a lower rate of increase than in 1964-65 and is attributable in large part to the lower rate of growth of incomes subject to 'income tax in 1965- 66. As already mentioned, total salaries and wages subject to " pay-as-you-earn " instalment deductions are not expected to increase at as fast a rate in 1965-66 as in 1964-65. Mainly because of a decline in incomes of primary producers, it is esti mated that incomes of self-employed persons and unincorporated enterprises and other non-wage and salary income of individuals subject to tas increased by about 7 per cent in 1964-65, compared with almost 17 per cent, in 1963-64. Incomes of companies subject to tax are estimated to have increased by about 9 per cent, in 1964-65, compared with about 15 per cent in 1963-64. As these 1964-65 incomes will be assessed to tax in 1965-66, collections on this account this year are not expected to show as rapid an increase as last year. It is estimated that, on the basis of existing rates of taxation and charges, the increase in total receipts (other than loan raisings) would fall short of the increase in total expenditures by £49,675,000, so that there would be an addition of this amount to the excess of expenditures over receipts to be met from borrowings. It is proposed, as announced in the Budget Speech, to increase rates of certain taxes estimated to yield an additional £72,470,000 in 1965-66. After allowance for the effects of the increased rates of tax, total receipts are estimated to amount to £2,611,445,000 in 1965-66, an Increase of £297,505,000 over receipts in 1964-65. After the proposed measures, the increase in receipts is estimated to be £22,795,000 greater than the estimated increase in expenditures, so that the excess of expenditures over receipts to be met from borrowings in 1965-66 is estimated to decline by the same amount, to £55,585,000. Details of the estimates of receipts for 1965-66 are set out in Statement No. 3. Loan raisings in 1965-66 are expected to be substantially lower than in 1964-65. Redemptions are not expected to be as great in 1965-66 as in 1964-65, mainly because of the smaller amount of maturing securities held in non-official hands. Overall, net loan proceeds are expected, on very tentative estimates, to decline by £22,252,000 to £75,000,000 in 1965-66. This would exceed by £19,415,000 tha excess of expenditures over receipts to be met from borrowings, so that if these estimates were realized net temporary borrowings would be reduced correspondingly. The Budget prospects for 1965-66 are compared in the following table with the Budget result for 1964-65. It is estimated that the Consolidated Revenue Fund would be balanced in 1965-66 after the payment of £126,730,000 to the Loan Consolidation and Investment Reserve, where this amount could be applied towards meeting commitments outside the Consolidated Revenue Fund. The following table sets out in summary form the estimated relationship between Consolidated Revenue Fund transactions and other financial transactions of the Commonwealth in 1965-66. *riation Bill (No.1 ).* [17 August 1965.] *(Budget Speech.)* 53 The main factors contributing to the variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Defence. - Expenditure is estimated to increase by £5,603,000 in 1965-66 mainly as a result of an increase of £4,183,000 in Defence Aid to Malaysia. Other major increases are £928,000 in the provision for electronic data processing plant and equipment and £410,000 for salaries and administrative expenses, including an amount of £199,000 in respect of Victoria Barracks which was formerly shared by the Service Departments. Navy.- The estimated increase of £27,463,000 in expenditure in 1965-66 reflects increases of £9,062,000 in expenditure on the purchase and construction of ships; £9,294,000 on general stores; £4,039,000 on purchase of aircraft and associated initial equipment; £1,248,000 on buildings and works; £2,274,000 on pay, salaries, and wages for R.A.N, personnel and civilian staff; £791,000 for the purchase of machinery and plant for naval dockyards and establishments; and £797,000 for repairs and other charges for ships, aircraft, machinery and plant. Army.- Of the estimated increase of £28,935,000 in expenditure in 1965-66, £11,048,000 relates to provision of accommodation for the Regular Army, the Pacific Islands Regiment in Papua/New Guinea and National Service trainees. Provision has also been made for increases of £7,618,000 for A.M.F. pay and salaries of civilian staff; £4,609,000 for arms and equipment; £1,654,000 for general services; £1,606,000 for forces stationed overseas; and &1 ,048,000 for acquisitions of sites and buildings. Air. - Expenditure is estimated to increase by £15,684,000 in 1965-66 mainly because provision has been made for increases of £8,525,000 in expenditure on aircraft purchase and manufacture; £4.614,000 for equipment and stores; £2,273,000 for buildings and works; and £1,970.000 for R.A.A.F. pay and civilian salaries. Expenditure on housing is estimated to decline by £2,431,000. Supply. - Expenditure is expected to be £2.863,000 greater in 1965-66 because expenditure on the purchase of reserve stocks is estimated to increase by £1,414,000: on machinery and plant by £1,197,000: on additional working capital for ammunition factories by £400,000; on production development by £310,000; and on buildings and works by £320,000. Net transactions on behalf of Other Administrations in 1964-65 resulted in a credit of £59,000; it is estimated that there will be a credit of £680.000 in 1965-66. Administration of the National Service Act.The estimated increase of £222,000 in 1965-66 reflects the cost of administering the National Service Act for a full year. Government Contribution to D.F.R.B. Fund. - The increase of £518,000 in 1965-66 mainly reflects the increasing numbers to whom retirement benefits are payable. Development of Exmouth Township. - The higher provision of £375,000 in 1965-66 represents the balance of the Commonwealth contribution to the Western Australia Government towards the cost of developing a township at Exmouth in connexion with die United States Communications Base which is being established at North West Cape. This item includes payments in the nature of financial assistance to or for the States except payments to the States for the maintenance of tuberculosis hospitals which are charged to the National Welfare Fund, contributions towards the cost of development of an integrated township at Exmouth charged to Defence Services and advances to Queensland for the Mount Isa railway project which were charged to the Loan Fund. It also includes some minor payments which are in the nature of reimbursements for expenditures incurred on behalf of the Commonwealth. Detailed comments on these payments are given in the White Paper "Commonwealth Payments to or for the States, 1965-66". Brief comments on the principal variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are set out below. Financial Assistance Grants. - Under new financial assistance arrangements agreed at a Premiers' Conference held in June, 1965, the financial assistance grant payable to each State in 1965-66 is to be determined by adjusting the grant paid to that State in 1964-65 (with the addition of £1,000,000 to the grant to Queens land) in accordance with a formula based on estimated movements in the population of that State between 31st December, 1964 and 31st December, 1965, the increase in average wages for Australia as a whole between 1963-64 and 1964-65, and a "betterment" factor of 1.2 per cent. In addition, the grant to Victoria as determined under this formula will be increased by £600,000. Preliminary estimates made by the) Commonwealth Statistician indicate that the financial assistance grants payable to the States in 1965-66 will total £377,547,000, or £36,873,000 greater than the grants paid in 1964-65. The final determination of the grant payable to each State in 1965-66 will be made by the Commonwealth Statistician later in the year. Special Grants. - The Commonwealth Grants Commission has recommended special grants for the claimant States in 1965-66 totalling £20,885,000, compared with £15,860,000 in 1964-65. The Commission has recommended that Western Australia be paid £12,019,000, compared with £8,560,000 in 1964-65, and Tasmania, £8,866,000, compared with £7,300,000 in 1964-65. Payments under the Financial Agreement. - The Financial Agreement provides that the Commonwealth will in each year, during the period of 58 years commencing 1st July, 1927, contribute a fixed amount of £7,585,000 towards the interest payable on State debts existing at 30th June, 1927. The Sinking Fund contributions made by the Commonwealth in respect of State debts existing at 30th June, 1927, and in respect of State debts incurred since that date, vary according to the nature and extent of borrowings by the States and are paid direct to the National Debt Sinking Fund. The estimated increase of £643,000 in these contributions in 1965-66 reflects the growth in State debt. Commonwealth Aid Roads Grants. - The Commonwealth Aid Roads Act 1964 provides for the payment of a total amount of £70,000,000 to the States in 1965-66 for roads purposes- £64,000,000 as basic grants and £6,000,000 as additional grants. In 1964-65, road grants paid to the States totalled £65,000,000, of which £62,000,000 represented basic grants and £3,000,000 additional grants. Financial Assistance for Universities. - Consequent upon the Eggleston Report on Academic Salaries and also upon certain proposals arising out of the Report of the Committee on the Future of Tertiary Education in Australia, the Universities (Financial Assistance) Act 1963 was amended in 1965 to increase the financial assistance payable to the States for universities over the three calendar years, 1964, 1965 and 1966, from £58,400,000 to £65,300,000. Following the second Report of the Committee on Teaching Costs of Medical Hospitals, it is expected that proposed payments to the States for certain recurrent expenditures of teaching hospitals and for capital assistance towards specified university projects in those hospitals, will further increase the total assistance to the States over the three year period. Payments to the States for universities are expected to increase by £2,077,000 in 1965-66. Research Grants.- It is expected that £750,000 will be made available through State Governments in 1965-66 in support of selected research projects to be carried out in any academic field by individuals or research teams. Grants to Colleges of Advanced Education. - Consequent upon the Report of the Committee on the Future of Tertiary Education in Australia, it is expected that interim capital grants totalling £1,000,000 will be made to the States in 1965-66 for specified colleges. Mental Health Institutions - Contribution to Capital Expenditure. - The States Grants (Mental Health Institutions) Act 1964 provides for Commonwealth .grants to the States over a period of three years, of amounts equal to one-third of the total expenditure incurred by them, with the Commonwealth's approval, in building and providing equipment for mental health institutions. Expenditure by the Commonwealth in 1965-66 is estimated at £2,000,000, compared with £1,252,000 in 1964-65. Replacement of Derby Jetty- Western Australia. Under the Derby Jetty Agreement Act 1962, the Commonwealth has provided £800,000 for construction of a new jetty at Derby in the West Kimberley region. Half of the assistance has been by way of grant, the other half being repayable with interest over 15 years. In 1964-65, payments to the State amounted to £150,000, bringing total payments by the Commonwealth to the agreed amount of £800,000. No provision is, therefore, required in 1965-66. Western Australia - Northern Development - The Western Australia (Northern Development) Agreement Act 1963 provides for financial assistance to Western Australia of £3,500,000 for development of approved projects during the three years, 1963-64 to 1965-66. In 1964-65, an amount of £1,284,000 was provided under this Agreement, comprising £734,000 for the Ord River Project and £550,000 (of which £275,000 is repayable with interest) for the Broome jetty works, lt is estimated that, in 1965-66, £556,000 will be made available in respect of the Ord River Project, and £577,000 for the Broome jetty works, making total estimated payments and advances of £1,133,000. Commonwealth payments under this Agreement will then be completed. Water Supply- Western Australia. - Under the Western Australia (South-west Region Water Supplies) Agreement Act 1965, the Commonwealth is to provide financial assistance to Western Australia of up to £5,250,000 by way of repayable interest-bearing advances, over a period of eight years beginning in July, 1965, for the purpose of accelerating works undertaken by that State to extend the scheme termed the "Comprehensive Water Supply Scheme" in the south-west portion of the State. The new areas to be served total about 4,000,000 acres. Commonwealth payments will be based on one half of the States expenditure on the scheme, and repayment's, spread over 15 years, will commence 10 years after each payment is made. An amount of £625,000 is provided for payment in 1965-66. Weipa Development - Queensland. - The Commonwealth has offered to provide financial assistance of up to £1,635,000 to Queensland by way of repayable interest-bearing advances to finance harbour and township works to be carried out at Weipa on Cape York Peninsula. Payments by the Commonwealth in 1965-66 are expected to total £750,000. Cattle Roads - Queensland. - Under the Queensland Beef Cattle Roads Agreement Act 1962, the Commonwealth is to provide financial assistance of up to £8,300,000 to Queensland for the construction and bitumen sealing of certain roads for the transport of beef cattle in .that State. One half of the expenditure by the Commonwealth in excess of £1,700,000 is repayable by the State; the remainder takes the form of a grant. In 1964-65, payments were made to the State amounting to £2,300,000 (of which £1,150,000 is repayable), bringing total Commonwealth contributions to £5,997,000. It is estimated that £2,000,000 will be required for expenditure by the State in 1965-66, comprising £1,000,000 grant and £1,000,000 advance repayable with interest. Brigalow Lands Development - Queensland. - The Brigalow Lands Agreement Act 1962 provides for financial assistance to Queensland of up to £7,250,000 for the development of approximately 4,271,000 acres of brigalow land in the Fitzroy River Basin. The assistance is being provided by way of interest-bearing advances to cover expenditure by the State on certain specified works during the period of five years ending on 30th June, 1967. Repayments are to commence in 1968. Advances amounting to £700,000 were made in 1964-65, and provision has been made for advances totalling £1,000,000 in 1965-66. Coal Loading Works - Queensland. - Under the Coal Loading Works Agreement (Queensland) Act 1962, the Commonwealth entered into an Agreement with the Queensland Government to provide financial assistance of up to £200,000 to expedite improvements to coal loading facilities at Gladstone. Assistance was to be by way of a repayable long term advance of up to £100,000 and a grant of up to £100,000. Final payments of £120,000 were made to the State in 1964-65 under this Agreement. Chowilla Reservoir - New South Wales. - Under the Chowilla Reservoir Agreement Act 1963, the Commonwealth is providing a loan to New South Wales to finance that State's one-quarter contribution towards the cost of constructing the Chowilla Reservoir, as an approved work under the River Murray Waters Agreement. Payments to the State in 1964-65 amounted to £78,000, and it is estimated that advances in 1965-66 will total £200,000. The Commonwealth contribution to the River Murray Commission in respect of its quarter-share under the Agreement of the cost of the Chowilla Reservoir is included in the expenditure estimates of the Department of National Development (see Item No. 11. - Capital Works and Services). Blowering Reservoir - New South Wales. - Under the Blowering Water Storage Works Agreement Act 1963, arrangements have been made between the Commonwealth and New South Wales Governments for construction of the Blowering Reservoir. The bulk of the work involved will be undertaken by the Snowy Mountains Hydroelectric Authority as the agent for, and at the expense of, the State of New South Wales. The Commonwealth will, however, finance one half of the cost in the form of repayable interest-bearing loans to New South Wales. Payments to New South Wales in 1964-65 were £1,746,000, and are estimated to amount to £3,050,000 in 1965-66. Flood Mitigation - New South Wales. - Under the New South Wales Grant (Flood Mitigation) Act 1964, the Commonwealth is to provide financial assistance of up to £2,750,000 to carry out flood mitigation works on the Macleay, Clarence, Richmond, Tweed, Shoalhaven and Hunter Rivers. Commonwealth payments will match expenditures by the State, which in turn bear a prescribed ratio to local authority expenditures on flood mitigation works in these areas. Payments amounted to £650,000 in 1964-65; it is estimated that £570,000 will be paid in 1965-66. Gordon River Road- Tasmania.- The Tasmania Grant (Gordon River Road) Act 1964 authorizes the grant of financial assistance of up to £2,500,000 to Tasmania for construction of a developmental road into the Gordon River region of Tasmania, primarily for the purpose of facilitating detailed investigations of a further stage of the Tasmanian hydro-electric system. In 1964-65, £547,000 was paid under the Agreement, and £638,000 has been provided for payments in 1965-66. Water Resources Investigations. - Under the States Grants (Water Resources) Act 1964, the Commonwealth is authorized to grant financial assistance to the States for the purpose of accelerating the States' programmes of measuring the discharge of rivers and investigating underground water resources. Grants to each State are related to that State's capital expenditure and the operational expenditure which it incurs in carrying out its measurement and investigation programmes. The total payment to the States in 1964-65 was £343,000, and it is estimated that a total amount of £444,000 will be paid in 1965-66. Railway Projects. - Expenditure under this heading is estimated to Increase by £6,860,000 in 1965-66. Under the Railway Agreement (Western Australia) Act 1961, financial assistance is to be provided for the construction of a standard gauge railway from Kwinana to the iron ore deposits at Koolyanobbing and to Kalgoorlie. Payments amounting to £5,133,000 were made for this project in 1964-65, and it is estimated that £10,150,000 will be required in 1965-66. Work on the standardization of the Port Pirie-Broken Hill railway is being carried out under the Railway Standardization (South Australia) Agreement Act 1949. Expenditure under this Agreement amounted to £2,245,000 in 1964-65, and is estimated to be £4,088,000 in 1965-66. {:#subdebate-52-0} #### Item No. 3. - Payment to National Welfare Fund The National Welfare Fund Act provides that the payment from Consolidated Revenue to the National Welfare Fund each year should be equal to the actual expenditure from the Fund in that year. Expenditure from the Fund was £445,183,000 in 1964- 63 and, after taking account of the cost of the increase of £25,649,000 in expenditure from the Budget proposals, ls estimated at £470,832,000 ta Fund in 1965-66 are given in Statement No. 4. - 1965- 66. Detailed explanations of the estimated National Welfare Fund Estimates, 1965-66. The main factors responsible for variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Sinking Fund.- -The estimated increase of £1,828,000 in contributions to the National Debt Sinking Fund reflects the normal rate of accumulation in these contributions. Interest.- The estimated increase of £1.1,000 in interest payable on overseas debt reflects an increase of £577,000 in interest payments on drawings made against the International Bank loan for the Snowy Mountains Hydro-electric Scheme, and decreases of £360,000 and £206,000, respectively, in interest payments on earlier International Bank loans and other overseas debt, the outstanding amounts of which have been reduced as a result of redemptions and repayments by the National Debt Sinking Fund. The estimated decrease of £1,385,000 in interest payable on debt in Australia mainly results from increased recoveries from the States in respect of housing advances and the Mount Isa railway project. Loan Redemption and Conversion Expenses.Loan redemption and conversion expenses are estimated to increase by £88,000 because of the amount of debt maturing in Australia in 1965-66 for which the Commonwealth will be responsible is greater than in 1964-65. Customs and Excise.- Payments under the Phosphate Fertilizers Act 1963 are expected to increase by £1,060,000 in 1965-66 because of increased sales of superphosphate, and cotton bounties payable under the Raw Cotton Act 1963-1965 are estimated to be £879,000 greater because of an increase in bountiable production. Bounty payments in respect of sulphate of ammonia and vinyl resin are also expected to increase in 1965-66, by £267,000 and £498,000, respectively. External Affairs. - lt is expected that Australia's contribution to the Indus Basin Development Fund will be £546,000 greater in 1965-66. Housing. - In accordance with the provisions of the Housing Loans Insurance Act 1965, an amount of £100,000, was advanced to the new Housing Loans Insurance Corporation upon its establishment in May, 1965. No advances are expected to be necessary in 1965-66. Labour and National Service. - Payments to the Australian Stevedoring Industry Authority under the Stevedoring Industry Act 1956-1962 are expected to increase by £200,000 in 1965-66. Primary Industry. - Expenditure is estimated to be £14,776,000 greater in 1965-66 primarily because lower export prices and the higher return guaranteed to growers in respect of the 1964-65 wheal crop are expected to result in an increase of £8,654,000 in the Commonwealth payment (£9,600,000) into the Wheat Prices Stabilization Fund this year. Payments for wool promotion (£10,980,000) under the Wool Industry Act 1962-1964 are expected to increase by £1,856,000 in 1965-66: the Commonwealth's contribution (£4,190,000) towards this purpose is also expected to be £783,000 greater. Initial payments under the Poultry Industry Assistance Act 1965 are expected to amount to £3,600,000 in 1965-66- as from 1st July, 1965, a Commonwealth levy will be imposed on poultry farmers in respect of hens over six months of age which are kept for commercial purposes: collections from this levy will be paid into a Trust Account, from which payments will be made to the States to assist the poultry industry. It is also expected that payments totalling £495,000 will be made under the Dried Vine Fruits Stabilization Act 1964 in 1965-66: there have been no previous payments under this Act. Trade and Industry.- An amount of £1,000,000 is being provided to increase the capital of the Export Payments Insurance Corporation in 1965-66. Treasury. - It is estimated that total expenditure will be £21,548,000 greater in 1965-66. Payments under the Currency Act 1963 in respect of the introduction of decimal currency are expected to increase by £13,086,000 to £14,949,000 this year. The States Grants (Petroleum Products) Act 1965, which implements the Government's undertaking to reduce the prices of petroleum products sold in country areas to no more than 4d. a gallon above capital city prices, is expected to operate from early in October, 1965, and to cost £4,200,000 in 1965-66. Commonwealth contributions to the Superannuation Fund (£12,268,000) are expected to be £2,252,000 greater because one additional payday occurs in 1965-66 and the volume of pension payments is increasing. Payments to the Internanotial Development Association (£3,340,000) will increase by £2,067,000 in 1965-66, and payments under the Gold-Mining Industry Assistance Act 1954-1965 are expected to be £310,000 greater, because of higher payments to two large mines and other liberalizations in the subsidy scheme. Payment of the gold portion ($US25,000,000) of the increase in Australia's quota in the International Monetary Fund will be made in 1965-66, involving expenditure of £11,161,000, or the same amount as that required in 1964-65 to satisfy the two drawings of Australian currency from the I.M.F. by India. Department Running Expenses comprise the annual expenditure on wages and salaries and administrative expenses of Civil Departments (excluding Business Undertakings, Defence Departments and expenditure in the Territories). Some of the factors responsible for the more important variations between estimated expenditure in 1965-66 and actual expenditure bt 1964-65 are: - Civil Aviation. - Expenditure is estimated to be £1,302,000 greater in 1965-66. Administrative salaries and expenses are expected to increase by £193,000, and the maintenance and operation of civil aviation facilities by £1,109,000. External Affairs. - The estimated increase in expenditure of £1,018,000 includes £325,000 attributable to increased staff and salary payments and £400,000 to accounting changes at overseas Posts. Interior.- The estimated increase of £485,000 in expenditure in 1965-66 includes £562,000 for office accommodation and services, £199,000 for the Bureau of Meteorology and £89,000 for the Mews and Information Bureau, partly offset by a reduction of £440,000 in the estimate for the Electoral Branch. National Development. - Expenditure b estimated to increase by £342,000, which includes provision for expansion of the Northern Division of the Department and the Forestry and Timber Bureau. Prime Minister's. - The estimated increase of £542,000 in expenditure in 1965-66 includes Increases of £223,000 in staff and salary expenses and £319,000 in administrative expenses. The latter figure includes £270,000 for increased costs of renting office premises in London, a considerable proportion of which will be recovered by subletting. Trade and Industry. - Expenditure to 1965-66 is estimated to increase by £474,000, which includes provision for expenditure of an additional £206,000 for overseas trade promotion and £146,000 for the Commercial Intelligence service. Treasury.- The estimated increase of £1,094,000 in expenditure in 1965-66 is attributable to increases in staff and salaries estimated to cost an additional £1,033,000 and includes £472,000 for new positions associated with automatic data processing, mainly in the Bureau of Census and Statistics. An estimated increase of £415,000 in other administration costs is offset by accounting changes, amounting to £354,000 in 1965-66, in the treatment of running costs of the Royal Australian Mint. Works.- Of the estimated Increase of £1,393,000 in expenditure in 1965-66, £422,000 is attributable to increased requirements for furniture and fittings and results mainly from major transfers of Departments to new accommodation, £591,000 ls attributable to increased staff and salaries and £193,000 to increased general administrative costs. Expenditure on repairs and maintenance is estimated to increase by £187,000. Other Services includes expenditure on the activities of Government, other than those specifically provided for elsewhere (e.g., social services, Capital Works and Services, Payments to or for the States, and Defence Services) which are covered by Annual Appropriation Bills. Some of the more important factors responsible for variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Customs and Excise. - The increase in expenditure of £77,000 is mainly because of the estimated cost of operation in the Northern Territory of the scheme to reduce the margin above capital city prices of certain petroleum products sold in country areas to no more than 4d. per gallon. (See also Item No. 5. - Other Special Appropriations: Treasury.) External Affairs. - The estimated decrease of £3,053,000 in expenditure in 1965-66 is mainly the result of the fact that £3,801,000 was expended in 1964-65 on a gift of wheat to India. No similar expenditure is provided for in 1965-66. Expenditure under the Colombo Plan economic development programme is estimated to increase by £681,000 in 1965-66. Health. - Of the estimated increase of £123,000, £45,000 is attributable to a capital grant and increased subsidy for the Royal Flying Doctor Service and £34,000 is a contribution to the International Cancer Research Agency. Immigration. - Of the estimated increase of £417,000 in expenditure in 1965-66, £315,000 is for increased costs of assisted passages for migrants. National Development. - Expenditure is estimated to increase by £1,543,000 in 1965-66, which includes an additional £1,281,000 for oil search subsidies and a new provision of £130,000 to meet the Commonwealth's contribution towards additional research into coal utilization. Prime Minister's. - The estimated increase of £2,719,000 in expenditure in 1965-66 includes increases of £594,000 for the Australian National University; £227,000 for Commonwealth PostGraduate Awards; £587,000 for Commonwealth University Scholarships; £859,000 for Commonwealth Secondary School Scholarships; £264,000 for Commonwealth Technical Scholarships; and £100,000 for Commonwealth Advanced Education Scholarships. An initial provision of £300,000 is also made for Australian participation in the Universal and International Exhibition, Montreal, 1967. Shipping and Transport. - The estimated increase of £941,000 in expenditure in 1965-66 includes an additional £826,000 in expenditure on ship construction by the Australian Shipbuilding Board. Social Services. - Expenditure in 1965-66 is estimated to increase by £240,000, which reflects an increase of £504,000 in the provision for telephone rental concessions to pensioners and an estimated decrease of £300,000 in grants under the Aged Persons Homes Scheme. Trade and Industry. - Expenditure in 1965-66 is expected to increase by £160,000, of which £75,000 is for increased payments of the South American shipping service subsidy, and £25,000 for Australian participation in the 1966 First Asian International Trade Fair to be held in Bangkok under the auspices of E.C.A.F.E. Treasury.- The estimated decrease of £158,000 reflects a reduction of £188,000 in interest payable on trustee moneys lodged at call, non-recurring expenditure of £214,000 in 1964-65 resulting from a loss on minting operations, and a new provision of £200,000 in 1965-66 for a working advance to the Royal Australian Mint Trust Account. Of the estimated increase of £13,260,000 in expenditure in 1965-66, £860,000 represents the estimated cost of the proposals announced in the Budget speech. The estimated cost of these proposals in a full year is £1,150,000. War and Service Pensions and Allowances.- The estimated increase in expenditure is £11,314,000, of which £770,000 represents the estimated cost in 1965-66 of the proposed increases in benefits. An additional £8,114,000 will also be required to meet the cost of one additional twelve-weekly bank payment and one additional fortnightly cheque payment in 1965-66 as compared with the previous year. The balance of £2,430,000 allows for expected increases in the number of pensioners in 1965-66, for increases in existing rates of pensions following re-assessments of incapacity and for the fall-year effects of the increased benefits which were granted during 1964-65. Repatriation Hospitals and Other Institutions. - The operating expenses of Repatriation hospitals, out-patient clinics, artificial limb centres and Anzac Hostels are estimated to be £421,000 greater than in 1964-65. Of this increase, £286,000 is attributable to the full-year cost of salaries and wages of staff appointed during 1964-65 and the cost of filling vacant positions during 1965-66. The balance of £135,000 relates to expected increases in the number of specialist consultations and in other operating costs for the growing number of in-patients. Other Repatriation Benefits. - The estimated increase in expenditure is £1,525,000, of which £90,000 represents the estimated cost in 1965-66 of the proposed increases in benefits. The balance of £1,435,000 largely reflects continuing growth in the numbers receiving medical and related treatment. This increase comprises £471,000 to meet the cost of increased fees for local medical officers (which came into effect from 1st May, 1965) and more frequent visits and consultations' by medical personnel together with higher costs of ancillary medical services; £451,000 for higher costa of pharmaceutical services resulting from an expected increase in the number of items prescribed; £102,000 for increased costs of main* tenance of patients in non-departmental institutions; £143,000 for telephone concessions to eligible service pensioners; £112,000 to cover one additional bank payment and one additional cheque payment under the Soldiers' Children Education Scheme in 1965-66; and £156,000 for increased maintenance, travel and incidental costs of the larger numbers of beneficiaries receiving treatment and assistance. The main factors responsible for variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Railways.- The estimated increase of £376,000 in expenditure in 1965-66 reflects an increase in maintenance work on the North Australia Railway, estimated to cost an additional £119,000, and higher operating costs on both the Trans-Australian and Central Australia Railways resulting from rising volumes of traffic. Post Office. - Salaries and wages are expected to increase by £4,750,000 in 1965-66, of which £2,500,000 arises from the cost for a full year of arbitration determinations made during 1964-65; the balance of £2,250,000 relates to additional staff, the full-year cost of staff engaged in 1964-65, and other increases in wages and allowances. Provision has been made for an increase of £1,130,000 in administrative expenses, mainly travelling and subsistence, the cost of printing telephone directories, and the costs of fuel, light and power. Expenditure on stores and materials is expected to increase by £1,087,000, most of which relates to the operation and maintenance of engineering service facilities. Conveyance of mails by outside agencies is expected to cost an additional £849,000 in 1965-66. Broadcasting and Television. - Expenditure is estimated to increase by £2,339,000 in 1965-66. The costs of the Postmaster-General's Department for technical and other services are expected to increase by £366,000, almost entirely because of the opening of new television stations. The increase in respect of the Australian Broadcasting Commission is estimated to be £1,860,000, and includes £435,000 for television relay facilities and £350,000 for radio studio technical services, the control of which was transferred from the Post Office during 1964-65. The main factors contributing to variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Australian Capital Territory.- The estimated increase of £1,595,000 in expenditure in 1965-66 reflects the continuing development of the National Capital. Provision has been made for additional expenditures of £39,000 for the maintenance of parks and gardens, £48,000 for the Australian Capital Territory police, £117,000 for repairs and maintenance, £458,000 for educational services, and £426,000 for the operation of health services (mainly the Canberra Community Hospital). Administrative expenditure of the National Capital Development Cmmission is expected to increase by £38,000 in 1965-66. Northern Territory. - The requirements of the Territory Administration account for £697,000 of the total estimated increase of £1,186,000 in 1965-66. The operation of public utility and health services will require increased expenditures of £102,000 and £94,000, respectively. The provision for repairs and maintenance and developmental services has been increased by £152,000. Papua and New Guinea. - The estimated expenditure of £31,229,000 relates almost entirely to the grant of £31,000,000 by the Commonwealth towards the budget of the Administration of the Territory. The increase of £3,000,000 in this grant will assist development of the Territory along the lines agreed by the Government following consider' ationof the Report by the International Bank Mission. The main factors responsible for variations between estimated expenditure in 1965-66 and actual expenditure in 1964-65 are: - Civil Aviation. - The estimated decrease of £544,000 in expenditure in 1965-66 relates to the phasing of expenditure on navigational aids and other equipment. Commonwealth Scientific and Industrial Research Organization. - The estimated decrease of £1,31*7,000 in expenditure in 1965-66 is principally because of reduced expenditure on the purchase and installation of scientific computing equipment. Expenditure for this purpose amounted to £1,430,000 in 1964-65 whereas in 1965-66 a final payment of only £130,000 is expected. External Affairs. - Expenditure is estimated to Increase by £157,000 in 1965-66, of which £150,000 is increased provision for expenses associated with the design of the new Chancery in Washington. Housing - War Service Homes. - It is estimated that £35,000,000 will be expended on War Service Homes in 1965-66, the same amount as in 1964-65. Immigration. - The estimated increase of £150,000 in expenditure in 1965-66 relates almost wholly to works, buildings and equipment for migrant hostels. Interior.- The estimated decrease of £331,000 in expenditure in 1965-66 is the net result of an estimated decrease of £524,000 in expenditure on the acquisition of sites and properties (excluding acquisitions for the Post Office, broadcasting and television services, and the Territories), and an increase of £193,000 in expenditure on equipment, including £33,000 for the Electoral Branch and £149,000 for the Meteorological Branch. National Development - Snowy Mountains Hydro-electric Authority. - Expenditure by the Authority is estimated to decrease by £1,680,000 in 1965-66 because payments for major works within the Snowy Scheme are expected to be lower as a result of the substantial completion of some works, and because recoveries by the Authority as agent for the State of New South Wales in constructing the Blowering Water Storage Works are expected to be greater. The bulk of expenditure at the present time is related to the Snowy-Murray section of the Scheme. It is estimated that £8,000,000 of the total expenditure by the Authority in 1965-66 will be financed from drawings made on the International Bank loan of $US100,000,000 for the Murray 1 power project. This power station is expected to come into operation by the winter of 1966. National Development - Other Items. - The estimated increase of £190,000 in expenditure in 1965-66 is attributable to an increase of £147,000 in payments under the River Murray Waters Act 1915-1963, including the Commonwealth's contribution towards the cost of constructing the Chowilla Reservoir, and to additional requirements of the Bureau of Mineral Resources and the Forestry and Timber Bureau. Prime Minister's - Australian National University. - Expenditure by the Australian National University in 1965-66 is expected to be £165,000 less than in 1964-65. The estimate of £2,531,000 relates to the programme of capital works and services recommended by the Australian Universities Commission for the 1964-66 triennium and to university housing. Shipping and Transport - Expenditure under this heading is estimated to decrease by £1,334,000 in 1965-66. In 1964-65, the Austraiian Coastal Shipping Commission (the Australian National Line) was provided with additional capital of £1,500,000: in 1965-66, provision is made for a loan to the Commission of £500,000. Expenditure on the replacement of lighthouse supply vessels is extimated to be £373,000 less than in 1964-65 as the main programme of replacement is now virtually complete. Treasury. - It is estimated that expenditure in 1965-66 will decrease by £590,000. Expenditure associated with the electronic computer installation is estimated to increase by £309,000 because of a carry-over of expenditure from 1964-65, while expenditure on additional equipment for the Government Printing Office is expected to be £63,000 greater. These increases are more than offset by estimated decreases of £607,000 in expenditure on plant and equipment for the Royal Australian Mint, and £353,000 in connexion with the special contracts which were entered into with Royal Mint Branches during 1964-65 for the stockpiling of decimal currency coins. Works - Civil Works Programme- Civil Aviation. - Expenditure on buildings and works is estimated to increase by £3,659,000 in 1965-66 as a result of major airport developments, including additional amounts of £1,053,000 for the Sydney Airport project, £1,506,000 for Tullamarine Airport, £492,000 for runway works at Brisbane, Perth and Hobart, and £582,000 for the new Launceston terminal. Works - Civil Works Programme - Customs and Excise. - Expenditure is estimated to increase by £365,000 in 1965-66 mainly because of increased requirements for the new Customs House in Melbourne. Works - Civil Works Programme - Interior.Expenditure is estimated to increase by £190,000 in 1965-66 largely because of increased expenditure on Stage 2 of the new Commonwealth Offices in Melbourne. Commonwealth Railways. - Of the estimated increase of £1,751,000 in expenditure in 1965-66, £1,351,000 is mainly for additional rolling stock required to cater for generally heavier traffic on the Trans-Australian and Central Australia Railways, and for the transport for export of iron ore on the North Australia Railway. The balance of £400,000 is required to finance increasing stores transactions and stocks. Post Office. - Expenditure is estimated to increase in 1965-66 by £10,318,000, of which £8,414,000 is for telecommunications equipment to meet increased requirements for subscribers' telephone services, trunk facilities and associated equipment Expenditure on buildings and miscellaneous plant and equipment, including motor vehicles, is expected to increase by £1,904,000. The working advance to the Post Office Stores and Services Trust Account has been increased by £1,000,000 to enable stock levels to be increased to implement the expanded works programme in 1965-66. Overseas Telecommunications Commission. - The advance of £1,600,000 is required to finance Australia's share of the SEACOM submarine cable project, and for capital contributions to the global communications satellite system; this provision is £600,000 greater than in 1964-65. Broadcasting and Television. - Expenditure in 1965-66 is estimated to be £715.000 less than in 1964-65 because of reduced expenditure on television transmission equipment and buildings associated with the regional television development schedule. The provision for broadcasting and television studio equipment for the Australian Broadcasting Commission is £140.000 less than expenditure in 1964-65. Australian Capital Territory. - Expenditure is estimated to increase by £1,790.000 in 1965-66. An additional amount of £2,100,000 is provided for the National Capital Development Commission's programme, £125,000 for plant and equipment replacements for the Department of Works, and a total of £203,000 for additional advances to the Housing Commissioner and local building societies. These, and other smaller increases, are partly offset by certain decreases in expenditure, including the nonrecurring provisions in 1964-65 of £456,000 for works, equipment and furniture requirements of Commonwealth Hostels Limited and £150,000 for additional capital for Commonwealth Brickworks (Canberra) Limited. The provision for the department of Health, mainly to develop the Canberra Community Hospital, is £225,000 less than actual expenditure in 1964-65. Northern Territory-- The 1965-66 provision for the Northern Territory is £2,327,000 greater than actual expenditure in 1964-65. This estimate includes increases of £445,000 for the Northern Territory Administration's works programme, £271,000 for health services (principally development of the Darwin Hospital), £141,000 in the grant to the Darwin City Council for road and drainage reconstruction, and £200,060 for advances to the Northern Territory Housing Commission for rental housing. The provision (£1,150,000) for the beef cattle roads programme in the Territory is £651,000 greater. An increased provision of £778,000 has been made for advances to the Northern Territory Port Authority. The provision for plant and equipment for the Northern Territory Administration is £100,000 lower. {:#subdebate-52-1} #### Item No. 12. - State Works and Housing Programmes At its meeting in June 1965, the Loan Council approved a governmental borrowing programme for 1965-66 of which £295,000,000 is for State works and housing. The Loan Council also approved borrowing programmes of £124,370,000 for State semi-government and local authorities with programmes in excess of £100,000 in 1965-66, and £578,000 for Commonwealth authorities. The Loan Council decided that no overall limit should be placed on borrowings by authorities for which the State Governments approve programmes of not more than £100,000 in 1965-66. The approved allocations for State works and housing in 1965-66 compare as follows with the final allocations for 1964-65: - The resolution approving the above-mentioned allocation of £295,000,000 for State works and housing was supported by the Commonwealth on the understanding that the states would fulfil certain conditions designed to promote governmental loan raisings in 1965-66. For its part, the Commonwealth undertook - {: type="i" start="i"} 0. to make available to the States the Aus tralian currency equivalent of any new money loans raised for general purposes overseas; 1. to leave to the States, to the extent neces sary to complete the borrowing programmes for State works and housing purposes, the whole of the proceeds derived from public loan raisings in Australia (other than the proceeds of borrowings for temporary purposes) after deducting amounts required to meet encashments of Special Bonds and redemptions which cannot be financed out of the National Debt Sinking Fund; 2. to arrange, to the maximum possible extent, for the refinancing of maturing loans that may not be fully converted; and 3. to make monthly advances to the States for the first eight months of the financial year at an annual rate not exceeding £295,000,000, the position then to be reviewed and a tentative determination made, not later than 28th February 1966, of the amount of special loan assistance the Commonwealth may provide from its own resources. State domestic raisings are estimated to produce £7,000,000 in 1965-66, so that £288,000,000 will be required to complete this year's borrowing programme for works and housing purposes. This compares with £279,678,000 in 1964-65. Details of the manner in which the State works and housing programmes have been financed since 1955-56 are given in the White Paper " Commonwealth Payments to or for the States, 1965-66". {:#subdebate-52-2} #### Item No. 13. - Wah Service Land Settlement It is estimated that payments in 1965-66 to the States for War Service Land Settlement, which will again be financed from loan moneys, will amount to £3,800,000, compared with £3,617,000 in 1964- 65. The composition of estimated expenditure in 1965- 66, compared with actual expenditure in 1964-65, is as follows: - {:#subdebate-52-3} #### Item No. 14. - Mount Isa Railway Project Under the Railway Agreement (Queensland) Act 1961, the Commonwealth agreed to provide advances of up to £20,000,000 to Queensland towards the cost of improving the Mount IsaTowns.villeCollinsville railway. These advances are repayable by the State, with interest, over a period of twenty years commencing 30th June 1965. Work on the railway is to all intents complete and no provision for expenditure in 1965-66 is, therefore, necessary. During 1964-65, the Commonwealth advanced a total of £1,508,000 to Queensland, bringing total advances for this project to £17^67,000. The State commenced repayment of these advances on 30th June 1965 as provided for in the Agreement. Item No. 15. - Customs Duty. On the basis of existing legislation, customs collections -are estimated to increase by £4,611,000 in 1965-66 to a total of £139,000,000. Imports are expected to increase less rapidly than they did in 1964- 65; the ratio of customs revenue to imports is expected to be about the same as in 1964-65. After allowance is made for the effects of the revenue proposals announced in the Budget Speech, customs collections arc estimated to amount to £143,600,000 in 1965-66, which is £9,211,000 greater than collections in 1964-65. {:#subdebate-52-4} #### Item No. 16. - Excise Duty On the basis of existing legislation, excise collections in 1965-66 are estimated to total £333,500,000, compared with actual collections of £315,479,000 in 1964-65. The estimated increase of £18,021,000 allows for increases in clearances of all the major products subject to excise duty, although at slower rates than in 1964-65. The effect of the revenue proposals announced in the Budget Speech is to increase the estimate for excise collections in 1965-66 to £383.440,000, which would bc £67,961,000 greater than actual collections in 1964-65. This estimate includes the direct effects of the increases in rates of duty on petroleum products, beer, potable spirits, and cigarettes, cigars and other tobacco products, and allows for some reduction in the levels of consumption in 1965-66 that were estimated on the basis of the existing rates of duty on these products. Item No. 17.- Sales Tax. Collections of sales tax are estimated to amount to £197,000,000 in 1965-66, which is an increase of £15,620,000 on collections in 1964-65. Sales of most taxable goods are ' expected to increase in 1965- 66 but at slightly slower rates than in 1964-65. Allowance has also been made for the full-year effects of the increased rate of tax upon passenger motor vehicles which was imposed in the 1964-65 Budget. {:#subdebate-52-5} #### Item No. 18.- Income Tax It is estimated that, on the basis of existing legislation, collections of income tax from individuals in 1965-66 would total £881,000,000, or £95,738,000 greater than in 1964-65. As a result of expected increases in both average wages and employment in 1965-66 and allowance for the fullyear effects of the discontinuance of the 5 per cent, rebate of tax in 1964-65, it is estimated that net " pay-as-you-earn " collections would exceed those of 1964-65 by £84,700,000. As regards taxpayers subject to provisional tax, it is estimated that there was a further substantial increase in the taxable incomes of business and professional, &c, taxpayers in 1964-65, but that incomes of primary producers declined significantly during that year. The effect of this decline in primary producers' incomes is largely to offset the increase in tax to be collected on the incomes of other taxpayers subject to provisional tax in 1965-66, with the result that total cash collections from those taxpayers are estimated to be £11,038,000 greater than in 1964-65. The effects of the revenue measures announced in the Budget Speech are to increase the estimated amount of income tax to be collected from individuals in 1965-66 to £898,720,000 or £113,458,000 greater than in 1964-63. Collections of income tax from companies in 1965-66 are estimated to amount to £393,000,000, which is £38,478,000 greater than in 1964-65. A further increase in the incomes of companies subject to tax is estimated to have occurred in 1964-65. Dividend (withholding) tax is estimated to yield £10,000,000 in 1965-66, or £1,980,000 greater than in 1964-65. It is estimated that, on the basis of existing legislation, total income tax collections in 1965-66 would be £1,284,000,000, or an increase of £136,196,000 on total collections in 1964-65. After allowance is made for the revenue measures announced in the Budget Speech, the estimate of total income tax collections in 1965-66 is £1,301,720,000, or £153,916,000 greater than in 1964- 65. Item No. 19. - Pay-roll Tax. Gross pay-roll tax collections are estimated to increase by £7,160,000 in 1965-66 as a result of expected increases in employment and average wage and salary payments. Rebates payable to exporters in 1965-66 under the export incentive scheme are expected to increase by £199,000 so thai net collections of pay-roll tax are estimated at £82,000,000, or £6,961,000 greater than in 1964-65. {:#subdebate-52-6} #### Items Nos. 20 and 21. - Estate and Gift Duties Collections of estate and gift duties in 1965-66 are estimated at £23,000,000 and £4,000,000, respectively, compared with actual collections of £20,765,000 and £3,654,000 in 1964-65. {:#subdebate-52-7} #### Item No. 22.- Business Undertakings The estimated increase of £1,006,000 in the operating revenue of the Commonwealth Railways mainly reflects expected growth in the volume of traffic but it also allows for recent increases in fares and certain freight rates. Post Office receipts are expected to increase by £16,676,000 in 1965-66 as a result of growth in postal, telephone and telegraph business and the full-year effect of the increased telephone charges introduced in 1964-65. Revenue from broadcasting and television services is expected to increase by £1,841,000 in 1965- 66. The main components of the increase are £694,000 for broadcast listeners' and television viewers' licence fees, and £946,000 for television stations licence fees, of which £408,000 accrued in 1964-65 but has been carried over for payment in 1965-66 because of a question of interpretation of the Television Stations Licence Fees Act 1964. {:#subdebate-52-8} #### Item No. 23. - Territories Territories revenue in total is expected to be £33,000 greater in 1965-66, reflecting an estimated decrease of £201,000 in revenue in the Australian Capital Territory and an estimated increase of £234,000 in revenue in the Northern Territory. In the A.C.T., receipts from premiums on lease sales are expected to decline by £916,000 but receipts from rates and from sales of Government houses and repayments of housing loans are expected to be, respectively, £233,000 and £419,000 greater. The estimated increase for the Northern Territory mainly relates to an expected increase of £128,000 in receipts of the electricity undertaking. The main factors responsible for variations between estimated revenue in 1965-66 and actual revenue in 1964-65 are: - Civil Aviation. - The estimated increase of £586,000 in revenue for 1965-66 results from an estimated increase of £611,000 in air navigation charges and a net reduction in other items. The estimated increase in air navigation charges revenue includes £60,000 for the proposed increase in the rates of the charges. Housing. - The bulk of the estimated increase in revenue in 1965-66 relates to interest payments on advances outstanding under the War Service Homes Scheme. Labour and National Service. - Receipts from the Stevedoring Industry Charge are expected to increase by £195,000 in 1965-66. National Development. - Revenue is estimated to increase by £430,000 in 1965-66 mainly because progress payments in respect of the sale of the aluminium undertaking at Bell Bay, in Tasmania, are expected to be £375,000 greater. Primary Industry.- Of the estimated increase in revenue in 1965-66, £963,000 is increased receipts in respect of War Service Land Settlement (mainly attributable to increased State contributions towards the writing-off of excess costs of acquisition and development) and £4,552,000 relates to higher proceeds from the levies and charges imposed upon various primary industries which are subsequently paid over to commodity boards or else transferred to Trust Accounts associated with the marketing and research arrangements, &c, for the relevant products. Thus, the new levy designed to assist the poultry industry is estimated to yield £3,600,000 in 1965-66 and receipts from charges imposed under the Dried Vine Fruits Stabilization Scheme, and from the tax imposed on the sale of shorn wool for purposes of wool promotion and research, are expected to be greater by £495,000 and £317,000 respectively. Repatriation. - The estimated decrease of £336,000 results from a change in accounting arrangements for this item. Shipping and Transport - The estimated increase of £887,000 is made up mainly of increases of £778,000 in receipts from sales of ships, £166,000 in interest payments by the States under the railway standardisation agreements, and £150,000 from the proposed increase in the rate of light dues, and a reduction of £126,000 in the payment in the nature of a dividend by the Australian Coastal Shipping Commission. Treasury.- Under the Reserve Bank Act 1959, the profits of the Note Issue Department of the Reserve Bank of Australia and such proportion as the Treasurer determines of the profits of the Reserve Bank from central banking business are payable to Consolidated Revenue. Total payments in respect of these profits in 1965-66 are expected to be £2,498,000 greater than in 1964-65. Interest and repayments in respect of advances to the States under the various Commonwealth and State Housing Agreements are estimated to increase by £319,000 in 1965-66, and interest on payments made under the Blowering Water Storage Works Agreement is expected to be £138,000 greater. Interest and profit on investments of the General Trust Fund, however, are expected to decline by £310,000 in 1965-66. Army.- The estimated decrease of £1,528,000 in 1965-66 is due to a reduction in repayments to revenue of moneys appropriated in earlier years. In 1964-65, the investment incomes of the Loan Consolidation and Investment Reserve and the National Welfare Fund amounted to £10,100,000 and £2,099,000, respectively. There were also increases of £600,000 and £500,000, respectively, in the balances of the Swiss Loans Trust Account and the Munitions Factories Trust Accounts; the cash balance of the General Trust Fund declined by £2,200,000 in respect of changes in investment in bullion and there was a reduction of £2,600,000 in the cash balance of the Post Office Stores and Services Trust Account. Supply. - Payments by the British Government in respect of its share of the costs of the Joint Weapons Project are estimated to be £155,000 greater than in 1964-65. Miscellaneous receipts from disposals sales are expected to be £566,000 greater. Payments to revenue of unrequired balances of Trust Accounts are estimated to be £319,000 less in 1965-66. Item No. 25.- National Debt Sinking Fund. The receipts of the National Debt Sinking Fund amounted to £96,312,000 in 1964-65, and it is estimated that they will increase by £7,173.000 to £103,485,000 in 1965-66. The main components of this estimated increase are an increase of £1,843,000 to £32,578,000 in the statutory percentage contributions payable out of Consolidated Revenue Fund by the Commonwealth, an increase of £2,232,000 to £17,800,000 in repayments on war service homes, and an increase of £2,845,000 to £41,324,000 in contributions by the Commonwealth and States in respect of State debt. Item No. 26 - Net Increase in Other Balances. Other cash balances of the Commonwealth increased by £8,539,000 in 1964-65 and are estimated to increase by £14,000,000 in 1965-66. In 1965-66, the investment incomes of the Loan Consolidation and Investment Reserve and the National Welfare Fund are expected to amount to £12,400,000 and £2,120,000, respectively. The cash balance of the Swiss Loans Trust Account is expected to increase by £600,000, and an increase of £400,000 is expected in the cash balance of the General Trust Fund as a result of changes in investment in bullion. The cash balances of the Munitions Factories Trust Accounts are expected to decline by £1,000,000, and the cash balance of the Post Office Stores and Services Trust Account by £600,000. {: .page-start } page 70 {:#debate-53} ### RECEIPTS The National Welfare Fund Act requires an appropriation from Consolidated Revenue to the National Welfare Fund each year of an amount equal to expenditure from the Fund in that year. Accordingly, as expenditure from the Fund in 1965-66 is estimated to increase by £25,649,000, a corresponding increase is expected in the moneys received by the Fund from Consolidated Revenue. With the inclusion of an estimated increase of £21,000 in interest received from the investment of the balance in the Fund, total receipts of the National Welfare Fund in 1965-66 are estimated at £472,952,000, or £25,670,000 greater than in 1964- 65. {: .page-start } page 70 {:#debate-54} ### EXPENDITURE It is estimated that expenditure from the National Welfare Fund will increase by £25,649,000 to £470,832,000 in 1965-66. The proposals announced in the Budget to increase existing benefits, te introduce new benefits, and to widen the field of eligibility for enrolment in the Pensioner Medical Service account for £5,180,000 of the overall increase of £25,649,000. It is estimated that the cost of these proposals in a full year would be £7,720,000. The proposed increase in the rate of supplementary assistance and the extension of this benefit to a pensioner whose wife receives a wife's allowance are estimated to cost £3,200,000 in 1965-66. The cost of introducing a guardian's allowance for single age and invalid pensioners with children is estimated to be £340,000. The proposed payment of standard rate pension to a married invalid pensioner whose wife receives a wife's allowance is estimated to cost £340,000. The widening of the field of eligibility for membership of the Pensioner Medical Service will cost an estimated £1,000,000, details of which are contained m the comments given below on particular items of expenditure where the estimate for 1965-66 varies substantially from actual expenditure in 1964-65. Age and Invalid pensions. - Expenditure in 1965- 66 is expected to increase by £10,301,000. The estimated cost of the proposed increase in the rate of supplementary assistance and the extension of this benefit to pensioners whose wives receive wife's allowance is £2,900,000. Other proposed concessions are expected to cost £700,000. Approximately £4,000,000 of the remaining increase of £6,701,000 arises from an increase in the number of pensioners, and the balance to the full-year effect of the higher rates of pension granted in 1964-65. Widows' Pensions. - The estimated increase of £1,778,000 includes an amount of £300,000 for the proposed increase m the rate of supplementary assistance. The remainder of the increase is attributable to an increase in the number of pensioners and the full-year effect of higher pension rates granted in 1964-65. Funeral Benefits. - The proposal to increase the rate of funeral benefit to £20, where the cost of a pensioner's funeral is met by another pensioner, accounts for practically the whole of the increase of £292,000. Child Endowment. - Expenditure is expected to be £1,285,000 greater than in 1964-65 because of an increase in the number of endowed children. Unemployment and Sickness Benefits. - The provision of £6,633,000 comprises £2,745,000 for unemployment benefit and £3,888,000 for sickness and special benefits. Corresponding expenditure in 1964- 65 was £3,404,000 and £3,866,000, respectively. The lower provision for unemployment benefit reflects an expected decrease in the average level of unemployment in 1965-66. Hospital Benefits. - Expenditure in 1965-66 is estimated to increase by £2,055,000, of which £290,000 relates to an expected increase in the number of pensioner patients in public hospitals arising from the proposed widening of the field of eligibility for membership of the Pensioner Medical Service. The remainder of the additional requirement is largely attributable to expected increases in the number of nursing home beds qualifying for Commonwealth benefit and in membership of hospital benefit organizations. Pharmaceutical Benefits. - Expenditure In 1965- 66 is expected to increase by £1,811,000 mainly because of greater utilization of benefits. Pharmaceutical Benefits for Pensioners. - The estimated increase of £818,000 includes £260,000 attributable to the proposed widening of the field of eligibility for membership of the Pensioner Medical Service. The remainder of the estimated increase reflects an expected growth in the number of pensioners and dependants enrolled under the existing conditions for membership, and greater utilisation of benefits. Medical Benefits. - Expenditure is expected to increase by £3,062,000, largely because of higher membership of medical benefit organizations and increased services qualifying for payment of Commonwealth benefit. The higher rates of benefit introduced in June, 1964 will have their first fullyear effect in 1965-66. Medical Services tor Pensioners. - The estimated increase of £2,690,000 includes £450,000 for the cost of the proposed widening of the field of eligibility for membership of the Pensioner Medical Service. Higher fees for participating doctors are estimated to cost an additional £2,000,000 in 1965-66. The balance of the increase arises from an expected growth in the number of pensioners eligible to enrol in the Service under existing conditions for membership. Miscellaneous Health Services- The estimated increase of £245,000 relates mainly to expected increases in expenditure on blood products and poliomyelitis prophylactic. Tuberculosis Medical Services and Allowances. - The estimated increase of £323,000 relates mainly to payments to the States for the running costs of tuberculosis hospitals and compulsory X-ray and diagnostic activity. Homes Savings Grants. - It is expected that more grants will be paid in 1965-66 at an estimated additional cost of £1,325,000. {: .page-start } page 72 {:#debate-55} ### STATEMENT No. 5.- SUMMARY OF BUDGET RESULTS, 1951-52 TO 1964-65, AND 1965-66 (ESTIMATED) The table shown on pages 74 and 75 sets out Commonwealth Budget results for the financial years 1951-52 to 1964-65, inclusive, and the estimated results for 1965-66, in a form broadly consistent with that now being used. Numerous changes have been made in the financial accounting arrangements of the Commonwealth Government since 1951-52. The figures for earlier years have been adjusted so as to produce the greatest practicable degree of consistency but it has not been possible to make all necessary adjustments. The only inconsistency of any importance that remains in these figures arises from accounting changes made in 1963-64, when credits amounting to £22,017,000 which, in previous years, had been offset against expenditure, were paid to revenue. Other inconsistencies remaining in the figures used in the table do not involve substantial sums and are unlikely to affect the comparative value of the figures. Many of the figures included in the table differ from those which appeared in the various Budget documents for earlier years: the following notes explain the content of particular items and the adjustments which have been made to the more important figures previously published. Expenditures ordinarily charged to Consolidated Revenue Fund. - This item includes expenditures on Defence Services and the Snowy Mountains Hydro-electric Scheme which were charged to the Loan Fund in some years: it excludes expenditures on redemptions of savings certificates and Treasury Bills, &c, and all transfers made to Trust Accounts such as, for example, the Loan Consolidation and Investment Reserve and the Debt Redemption Reserve. The figures for the years prior to 1960-61 have been adjusted to include the so-called "selfbalancing items " which were not then included on either side of the account. These "self-balancing items" mainly represent taxes and charges on commodities, the proceeds of which are appropriated for expenditure for specific purposes. To accord with the treatment adopted for 1965-66, Commonwealth expenditures on railway standardisation projects have been included in the figures of Payments to or for the States in all earlier years. State works and housing programmes. - The figures for State works and housing programmes are net of the amounts which the States themselves raised by way of domestic loans. As such, they represent the amounts actually paid out of Loan Fund by the Commonwealth in respect of these programmes. Details of the total works and housing programmes in each year are set out in Table No. 40 of the White Paper "Commonwealth Payments to or for the States, 1965-66 ". Receipts of Consolidated Revenue Fund. - As with expenditures ordinarily charged to Consolidated Revenue Fund, the figures of receipts for the years prior to 1960-61 have been adjusted to include the so-called "self-balancing items" for those years. The figures for Other Revenue (in all years) and for receipts of Business Undertakings (in 1962-63 and 1963-64) include amounts transferred from unrequired Trust Fund balances. National Debt Sinking Fund.- The figures published in the Annual Reports of the National Debt Commission have been adjusted to exclude the payment from the Consolidated Revenue Fund to the National Debt Sinking Fund in 1951-52, and also the proceeds from various International Bank loans which were credited to the Sinking Fund prior to 1959-60. Net movement in other balances. - This item comprises mainly a large number of movements in the cash balances of Trust Funds. In recent years, the number of Trust Funds and the scope of the financial transactions carried out through Trust Funds have been considerably reduced so the movements in balances now reflect mainly the investment incomes of the Loan Consolidation and Investment Reserve and the National Welfare Fund, less unrequired balances in other Trust Funds transferred to revenue. Loan proceeds. - The figures of loan proceeds are the actual cash proceeds from loans, &c, credited to Loan Fund in each year less discounts on conversion charged against the National Debt Sinking Fund, and less loan flotation expenses, &c, incurred net of amounts recovered from the States during that year. The figures for loan proceeds in Australia include the net proceeds derived from the issue of Special Bonds since 1958-59 - that is, subscriptions to Special Bonds less redemptions: they do not include the amounts subscribed by the Commonwealth to special loans or to public loans (as occurred in 1954-55 and 1955-56). Oversea "refinancing" operations, which had previously been treated as conversions, are treated in this table as adding to both loan proceeds and redemptions where they involved receipts into Loan Fund and expenditure from Loan Fund. As a result, total loan proceeds and total redemptions are increased compared with the figures previously published for the years in question; net loan proceeds are not affected. Redemptions. - This- item consists of expenditure incurred in reducing the amount of funded debt (that is, public debt other than temporary borrowing by way of Treasury Bills and Treasury Notes) outstanding, in Australia and overseas, other than redemptions of Special Bonds. It includes all expenditure on redemptions, repurchases and repayments from the National Debt Sinking Fund (except expenditure on the reduction of temporary debt, for example, Treasury Bills and Debentures, domiciled in London from 1951-52 to 1955-56, inclusive) and all expenditure on redemptions, &c, from the Loan Fund, except redemptions of Special Bonds, and from the Consolidated Revenue Fund and the Canadian Loan Trust Account. It does not include the cost to the National Debt Sinking Fund of discounts on conversion, which as previously mentioned has been deducted from loan proceeds (nor does it include losses on realisation of investments, &c, which have been included in the net movement in other balances). Net movement in temporary borrowings. - The figures for the years from 1951-52 to 1955-56, inclusive, include movements in the unfunded debt (Treasury Bills and Debentures) then domiciled in London. For footnotes see next page. In the foregoing table, the Commonwealth foregoing table, Budget is presented in national accounts form. In this form, the receipts and outlay of the Commonwealth are classified into categories which are directly comparable with those for which similar information is provided, in respect of past years, for the entire economy in the White Paper on National Income and Expenditure presented to the Parliament with the Budget each year. The table compares the actual outcome in 1964-65 with the Budget estimates for that year, with the actual outcome for 1963-64, and with the prospective outcome for 1965-66 implied by the present Budget estimates. A supplement to the Treasury Information Bulletin, entitled "National Accounting Estimates of Public Authority Receipts and Expenditure", reproduces the figures given in this table and provides comparable figures for earlier years from 1953-54 onwards. For the same years it also shows national accounting figures for Commonwealth authorities outside the Budget and consolidated figures for the entire Commonwealth government sector. At the same time it provides a detailed explanation of the basis on which the figures are compiled. {: .page-start } page 77 {:#debate-56} ### BUDGET RESULTS 1964-65 Net direct expenditure on goods and services from the Budget in 1964-65 totalled £627 million, £10 million more than the Budget estimate and £98 million more than in 1963-64. Current expenditure on goods and services was £70 million more than in 1963-64, and fixed capital expenditure on new assets and increase in stocks was £28 million greater than in 1963-64. Cash benefits to persons in 1964-65 amounted to £541 million, £3 million less than the Budget estimate and £26 million more than in 1963-64. Grants to States, at £478 million, were £1 million less than estimated in the Budget but £30 million greater than in 1963-64. Oversea grants were £47 million in 1964-65, £5 million more than the Budget estimate and £9 million above 1963-64. Grants towards private capital expenditure, at £14 million, were £8 million below the Budget estimate but £10 million above 1963-64. Including interest paid and subsidies total expenditure in 1964-65, at £1,945 million, was £3 million more than the Budget estimate and £180 million more than in 1963-64. After taking account of net loans for capital works and housing through the Budget, which at £322 million were £6 million more than the Budget estimate and £32 million more than in 1963-64, total outlay was £2,267 million. This was £9 million more than estimated in the Budget and £212 million more than in 1963-64. Total taxation receipts in 1964-65 were £1,894 million, £50 million greater than had been estimated in the Budget and £284 million more than in 1963-64. After allowance for receipts of interest, rent and dividends, the income of public enterprises and the proceeds of net sales of existing assets, the net increase in indebtedness in 1964-65 was £86 million. This was £52 million less than had been estimated in the Budget and £105 million less than the net increase in indebtedness in 1963-64. {: .page-start } page 77 {:#debate-57} ### BUDGET ESTIMATES 1965-66 Net direct expenditure on goods and services from the Budget in 1965-66 is estimated to total £743 million, £116 million more than in 1964-65. Current expenditure on goods and services is estimated to be £588 million, £101 ' million more than in 1964-65, and fixed capital expenditure on new assets and increase in stocks is estimated at £155 million, £15 million more than in 1964-65. Of the rise in current expenditure £81 million is estimated to occur in the war and defence item. Cash benefits to persons in 1965-66 are estimated to total £579 million, an increase of £38 million on 1964-65. Grants to States are estimated to be £533 million, £55 million more than in 1964-65. Subsidies are estimated to increase by £18 million, to £61 million, and grants towards private capital expenditure by £16 million, to £30 million, in 1965-66. Including interest paid and oversea grants, total expenditure in 1965-66, at £2,204 million, is estimated to be £259 million greater than in 1964- 65. After account is taken of net loans for capital works and housing through the Budget to the States and others, which in 1965-66 are estimated to total £315 million, or £7 million less than in 1964-65, total outlay in 1965-66 is estimated to be £2,519 million. This would be an increase of £252 million over total outlay in 1964-65. It is estimated that total taxation receipts in 1965- 66, on the basis of existing legislation, would be £2,084 million or £190 million more than in 1964-65. Public enterprises income is estimated to be £80 million in 1965-66, £6 million above the 1964-65 level. After interest, rent and dividends received and the proceeds of net sales of existing assets have been allowed for, it is estimated that, on the basis of existing legislation, the net increase in indebtedness in 1965-66 would be £126 million, £40 million more than the net increase in indebtedness which occurred in 1964-65. After allowance for the effects of the changes in taxation proposed in the Budget, it is estimated that total taxation receipts in 1965-66 will be £2,156 million, an increase of £262 million over 1964-65. The net increase in indebtedness in 1965-66 after these taxation changes is estimated at £54 million. This would be £32 million less than the net increase in indebtedness which occurred in 1964-65. This is a smaller decline than last year, when the net increase in indebtedness was £105 million less than in 1963-64. Total outlay in the year ahead is expected to rise by more than in 1964-65, and total receipts are expected to rise by less. A Budget both influences, and is influenced by, economic conditions. For the most part, increases in expenditures from the Budget add to the demand for goods and services and to some degree increases in revenue subtract from the spending of those who pay the taxes or other revenue charges. But the trends in the incomes and expenditures of those who contribute to the revenue will in part determine the amount of the increases in revenue, which may therefore be, to a large extend, the result of rising trends in incomes and expenditure in the economy. The economic effects of a Budget can thus be adequately assessed only in the context of the totality of trends in the economy as a whole. The likely impact of the Budget can, however, be assessed broadly by a consideration of the main aggregates in the table above. The estimated increase of £116 million in net expenditure on goods and services this financial year will be the largest in any Commonwealth Budget to date. After allowance for some £25 million or thereabouts which is estimated to represent the increase, within the total figure, in direct expenditure overseas, the resulting direct increase in demand for goods and services (including, of course, demand for imports also) within the domestic economy can be expected to be about £91 million. Of the total increase of £136 million in the other items of outlay (which constitute the " transfer " payments out of the Budget), the decline of £5 million in net loans for T.A.A. and Qantas can be set aside on the grounds that any changes in overseas expenditure on aircraft by those authorities will not affect the domestic economy in any case. Of the increase of £141 million which remains, a high proportion of the £55 million estimated increase in grants to the States can be expected to be spent directly on goods and services by the States. On the basis of recent experience roughly £45 million of the increase might be allocated in that way so that, together with the estimated increase of £16 million in grants towards private capital expenditure (all of which can be expected to increase direct spending on goods and services) an.d after allowance for the minor decline in net lending items, roughly £59 million of the total transfer payments can be expected to lead to direct increases in demand for goods and services (including imports) within the domestic economy. Of the remaining £82 million increase in total transfer items, some £5 million represents an increase in overseas grants. The remaining £77 million represents transfers of income into the hands of Australian recipients, such as pensioners, bond-holders, recipients of subsidies, and so on. The "first round" effects of the Budget can therefore be estimated as leading to increased direct demands for goods and services within Australia (including imports) amounting, in round figures, to roughly £150 million. Of the additional domestic incomes that will be generated by spending on domestic output, some will flow to Governments, including the Commonwealth Government, in the form of additional taxation; some may be remitted to oversea residents; some will be saved; and some will be spent within the economy as a "second round " of increased demand for goods and services, thereby adding again to incomes (except in so far as the demand has been met by imports). This cumulative process will continue and, when, account is taken of the full "multiplier" effects of this kind, the additional domestic demand and consequent increase in incomes stemming from the Budget can be expected to exceed very considerably the initial direct increase of about £150 million referred to above. On the side of receipts, the total increase (excluding the proceeds from net sales of existing assets) is estimated, after the revenue measures taken in the Budget are taken into account, to amount to £286 million. This is the measure of the additional transfers to the Commonwealth Government to be found from the increased incomes of the current year. Against it may be offset, therefore, the increases in those incomes resulting from transfer payments from the Budget to recipients in Australia (which was put above at £77 million or thereabouts) to give a resulting net figure of £209 million. Because the indirect effects of these increases in receipts and outlay cannot be precisely calculated, it is not possible, on the basis of these figures. to arrive at a precise estimate of the net addition to or subtraction from incomes in the domestic economy which the figures imply. But it seems likely that, on balance, the increase in incomes stemming from the very large increase in direct expenditures on goods and services involved in the Budget will exceed the reduction in incomes resulting from the increase in taxation and other receipts (a considerable part of which will be realized only if incomes and expenditures rise strongly in 1965-66), net of internal transfer payments. In that event the Budget would make some net addition to total spending in the economy, even though the net increase in indebtedness, as estimated, would be somewhat less in 1965-66 than it was in 1964-65. When trends in factors outside the Budget are considered, the Budget thus appears to be consistent with the continued growth of national product and expenditure in 1965-66, although at a somewhat slower rate than in 1964-65. {: .page-start } page 79 {:#debate-58} ### RECONCILIATIONS The following tables show how the figures contained in the table on page 76, and particularly the figure for the net increase in indebtedness, may be reconciled with those given in Statements Nos. 1 and 2, and with figures in the While Paper " National Income and Expenditure 1964-65 ". Foi iooino.es sec next page. {: .page-start } page 81 {:#debate-59} ### ADDENDUM: BUDGET ESTIMATES, 1965-66 IN TERMS OF DECIMAL CURRENCY The introduction of decimal currency in Australia will commence on 14th February, 1966. From that date, all Commonwealth Departments will change to decimal currency operation. It is intended that monetary amounts will continue to be shown in terms of the present currency, in financial documents prepared by the Treasury and other Commonwealth Departments and published before 14th February, 1966, but that in documents published on and after that date they will, as far as practicable, be expressed in terms of dollars and cents. The tables which follow have been prepared to provide a link between the 1965-66 Budget estimates, which are expressed in the present currency, and the 1965-66 Budget results which will, of course, be published in terms of the new decimal currency. The Budget prospects for 1965-66 are compared in the following table with the Budget result for 1964-63. For footnotes see next page. For footnotes see next page. Debate adjourned. (on motion by **Mr. Calwell)** {: .page-start } page 83 {:#debate-60} ### APPROPRIATION BILL (No. 2) 1965-66 Message from the Administrator recommending appropriation for proposed expenditure announced. Bill presented by **Mr. Harold** Holt, and read a first time. {:#subdebate-60-0} #### Second Reading {: #subdebate-60-0-s0 .speaker-009MC} ##### Mr HAROLD HOLT:
Treasurer · Higgins · LP -- I move - That the Bill be now read a second time. On the occasion of presenting the Supply Bill 1965-66 I explained the changes being made in the form of the annual appropriation measures. I indicated that henceforth there will be a separate bill, subject to amendment by the Senate, containing appropriations for expenditure on - {: type="a" start="a"} 0. The construction of public works and buildings; 1. The acquisition of sites and buildings; 2. Items of plant and equipment which are clearly definable as capital expenditure; 3. Grants to the States under section 96 of the Constitution; and 4. New policies not authorised by special legislation. Subsequent appropriations for such items will however be included in the Appropriation Bill not subject to amendment by the Senate. This Bill then contains details of the proposed appropriations for these purposes. The main points regarding the proposed expenditures in this Bill are dealt with in the Budget Speech. I commend the Bill to honorable members. Debate (on motion by **Mr. Crean)** adjourned. Commonwealth Payments to or for the States 1965-66. National Income and Expenditure 1964-65. Government Securities on Issue at 30th June, 1965. Commonwealth Income Tax Statistics for income year 1962-63. Civil Works Programme 1965-66, prepared by the Minister for Works. Ordered to be printed. {: .page-start } page 84 {:#debate-61} ### BUDGET 1965-66 {: #debate-61-s0 .speaker-009MC} ##### Mr HAROLD HOLT:
HigginsTreasurer · LP -- I present for the information of honorable members the following papers in connection with the Budget for 1965-66 - >Estimates of Receipts and Summary of Estimated Expenditure for the year ending 30th June, 1966. {: .page-start } page 84 {:#debate-62} ### TARIFF PROPOSALS 1965 {:#subdebate-62-0} #### Customs Tariff Proposals (No. 1); Customs Tariff Proposals (No. 2); Customs Tariff Proposals (No. 3); Excise Tariff Proposals (No. 2) {: #subdebate-62-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Housing · Wentworth · LP -- I move - [Customs Tariff Proposals (No. l).t] That the Customs Tariff 1965 be amended as set out in the Schedule to these Proposals and that the amendments operate, and be deemed to have operated, on and after the first day of July, One thousand nine hundred and sixty-five. [Customs Tariff Proposals (No. 2).t] Thai the Customs Tariff 1965, be amended as set out in the Schedule to these Proposals and that, on and after the eighteenth day of August, One thousand nine hundred and sixty-five. Duties of Customs be collected accordingly. [Customs Tariff Proposals (No. 3).t] That the Customs Tariff 1965 be amended as set out in the Schedule to these Proposals and thai tha amendments operate on and after the eighteenth day of August, One thousand nine hundred and sixty-five. [Excise Tariff Proposals (No. 2).] That the Schedule to the Excise Tariff 1921-1964 be amended as set out in the Schedule to these Proposals and that, on and after the eighteenth day of August, One thousand nine hundred and sixty-five, Duties of Excise be collected in pursuance of the Excise Tariff 1921-1964 as so amended. **Mr. Deputy Speaker,** the Customs Tariff Proposals and the Excise Tariff Proposals, which I have just tabled, relate to proposed amendments of the Customs Tariff 1965 and the Excise Tariff 1921-1964. Proposals No. 1 incorporate tariff changes consequent on the adoption by the Government of two reports by the Special Advisory Authority on - >Continuous filament polyam.de and polyester yarns; and > >Air cooled, four cycle, horizontal driving shaft, internal combustion piston engines, nol exceeding 10 B.H.I'. They also incorporate the following reports by the Tariff Board on - >Acetyl products; > >Copper and brass sheet, strip and foil; > >Safflower seed and soya beans, safflower oil and soya bean oil; > >Bubble levels; Umbrellas and sunshades; Static transformers; > >Laboratory, hygienic and pharmaceutical glassware: > >Continuous- filament acetate yarn;. > >Electrostatic air or gas fillers operating at voltages not exceeding 20 kV; > >A.C. watt-hour meters; > >Telescopic sights for weapons; > >Ethylene polymer and copolymer products; and > >Monofil, strip and imitation catgut. These reports were tabled during the autumn sessional period and remained undebated when the House went into recess in May last. By reason of the introduction of the new Tariff based on the Brussels Nomenclature and operating from 1st July 1965 the collection of duties under the proposals introduced at the time the Tariff Board and Special Advisory Authority reports were tabled, was validated until 30th June 1965. The duties were then carried forward by means of a Gazette Notice issued pursuant to section 273ea of the Customs Act and are now again introduced into the Parliament and will be debated at a convenient time. In addition, certain other changes are made in Proposals No. 1 and Proposals No. 2. Honorable members will recall that when I introduced the new Customs Tariff Bill into the House last sessional period I gave an undertaking on behalf of my colleague the Minister for Customs and Excise **(Senator Anderson)** that discrepancies in the Tariff Bill then before Parliament which were more than minimal and which were brought to the notice of the Department of Customs and Excise after the passage of the Bill would be adjusted as soon as possible. The balance of the amendments in Proposals No. 1, which operate from 1st July and all the amendments in Proposals No. 2, which operate from tomorrow morning, are changes necessary to correct discrepancies which occurred in the translation from the old tariff to the new tariff. Details of the tariff changes are contained in the precis of tariff alterations being circulated to honorable members. Proposals No. 3 provide for amendments to the Customs Tariff 1965 and Excise Tariff Proposals No. 2 provide for amendments to the Excise Tariff 1921-64 in accordance with the fiscal changes outlined by my colleague the Treasurer **("Mr. Harold Holt)** earlier this evening. Thi summaries of alterations, which are attached to the copies of the proposals circulated to honorable members, set out the proposed rates of duty as compared with those at present in operation. The new duties will take effect from tomorrow morning. I commend the proposals to honorable members. Debate (on motion by **Mr. Crean)** adjourned. {: .page-start } page 122 {:#debate-63} ### TARIFF PROPOSALS {:#subdebate-63-0} #### Discharge of Motions {: #subdebate-63-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Housing · Wentworth · LP -- by leave - I move - >That the following Tariff Proposals, constituting Order of the Day No. 16, Government Business - namely, Customs Tariff Proposals Nos. 31 to 38 and Customs Tariff Proposals Nos. 31 to 38 No. 4 - be discharged. These proposals have now been superseded by the proposals which I have just introduced. Question resolved in the affirmative. {: .page-start } page 122 {:#debate-64} ### DIESEL FUEL TAX BILL (No. 1) 1965 Bill presented by **Mr. Bury,** and read a first time. {:#subdebate-64-0} #### Second Reading {: #subdebate-64-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Housing · Wentworth · LP -- I move - >That the Bil] be now read a second time. **Mr. Deputy Speaker,** this Bill to amend the Diesel Fuel Tax Act (No. 1) 195/ contains only amendments consequent upon the tariff changes already introduced in the Budget proposals tonight. The Bill is the first of three bills which I will deal with in relation to diesel fuel. Clauses 1 and 2 of the Bill are procedural changes whilst clauses 3 and 4 provide for the change in the rate of tax from one shilling to one shilling and threepence per gallon on diesel fuel sold or otherwise disposed of to a person who is not the holder of a certificate. I commend the Bill to honorable members. Debate (on motion by **Mr. Crean)** adjourned. {: .page-start } page 123 {:#debate-65} ### DIESEL FUEL TAX BILL (No. 2) 1965 Bill presented by **Mr. Bury,** and read a first time. {:#subdebate-65-0} #### Second Reading {: #subdebate-65-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Housing · Wentworth · LP -- I move - >That the Bill be now read a second time. This Bill to amend the Diesel Fuel Tax Act (No. 2) 1957 contains only amendments consequent upon the tariff changes already introduced in the Budget proposals tonight. The Bill is the second of the three bills relating to diesel fuel. Clauses 1 and 2 of the Bill are procedural changes whilst clauses 3 and 4 provide for the change in the rate of tax from ls. *to* ls. 3d. per gallon on diesel fuel used in propelling a road vehicle on a public road. I commend the Bill to honorable members. Debate (on motion by **Mr. Crean)** adjourned. {: .page-start } page 123 {:#debate-66} ### DIESEL FUEL TAXATION (ADMINISTRATION) BILL 1965 Bill presented by **Mr. Bury,** and read a first time. {:#subdebate-66-0} #### Second Reading {: #subdebate-66-0-s0 .speaker-JTP} ##### Mr BURY:
Minister for Housing · Wentworth · LP -- I move - >That the Bill be now read a second time. This Bill to amend the Diesel Fuel Taxation (Administration) Act 1957 contains only amendments consequent upon the tariff changes already introduced in the Budget proposals tonight. The Bill is the last of the three bills relating to diesel fuel. Clauses 1 and 2 of the Bill are procedural changes whilst clauses 3 and 4 provide for rebate of duty on diesel fuel to be payable at the same rate as that at which the duty on the fuel was originally paid. I commend the Bill to honorable members. Debate (on motion by **Mr. Crean)** adjourned. {: .page-start } page 123 {:#debate-67} ### LOAN (HOUSING) BILL 1965 {:#subdebate-67-0} #### Second Reading Debate resumed (vide page 18). {: #subdebate-67-0-s0 .speaker-6U4} ##### Mr WHITLAM:
Werriwa **.- Mr. Speaker,** it is appropriate that there should be such a full House to listen to the resumed debate on the Loan (Housing) Bill. The Bill is being debated rather earlier than usual in the Budget session. Accordingly, it is not possible for honorable members to seek the statistics which usually adorn these debates. There are no statistics from the Commonwealth. There are no statistics available from any of the State Governments or from their housing authorities. The Vernon Committee accumulated a great deal of information and a great many statistics on housing during the three years or more that it deliberated. {: .speaker-JTP} ##### Mr Bury: -- Are you sure? {: .speaker-6U4} ##### Mr WHITLAM: -- Yes. Well, it tried to get them. It said that it was seeking them. The Cabinet has had the Vernon Committee's report for about four months and the House is not to have the Committee's report or its information until the Government has made up its own mind about them. Accordingly, **Sir, honorable** members, can debate the Loan (Housing) Bill at large. They need not be fettered by the latest statistics. This is the fifth of the annual bills which make allocations under the 1961 Commonwealth and State Housing Agreement, as it is called. That is the arrangement which the Commonwealth laid down in 1961 for grants to the States for housing. This agreement is the third such set of arrangements which the Commonwealth has made, the first being in 1945 and the second in 1956. The most encouraging feature of the speech of the Minister for Housing **(Mr- Bury)** on this Bill was his statement that he and his officers and State housing officers are now inquiring into many features of the housing situation in preparation for the next set of arrangements which will have to take effect from the middle of next year. In particular, the Minister stated - >The officers also made a close examination of the housing needs of those on the lower incomes, and especially of the persons whose needs are greatest. The information obtained from this conference will be of very great benefit to me and, [ believe, to the State Ministers for Housing when we meet - I expect before the end of this year - to consider a new Commonwealth and State Housing Agreement to extend or replace toe existing Agreement which expires in June next. I would hope that the new Agreement will replace the existing Agreement, for reasons which I shall give. A mere extension of the present Agreement would certainly not be adequate. I would also express the wish that members of Parliament might be given the opportunity to discuss this matter further in the light of further statistics when they are available. It is eight years since the Department of National Development, which was then in charge of housing, made a survey of the housing situation in Australia. In subsequent years the Minister for National Development consistently refused to bring this estimate up to date. The State ministers responsible for housing 18 months ago asked for an inquiry into housing and this Government refused it. Just under two years ago, the Australian Labour Party in this chamber moved that there should be such an inquiry, and every Government supporter voted against the motion. Accordingly, it is encouraging to note that the housing officers, Commonwealth and State - I am certain through the co-operative attitude of the first Commonwealth Minister for Housing that there has been for 12 years - are now inquiring into these matters. I hope that honorable members will be able to debate them before the Commonwealth enters into an agreement, as the Commonwealth calls it, with the States, or lays down conditions for the States. Increasingly, as the States' finances are subject to detailed conditions laid down by the Commonwealth, members of parliament in the Commonwealth and in the States will be denied the opportunity to debate those arrangements. They will be faced with faits accomplis. They will be faced with arrangements that they can merely adopt or reject. It will be no more possible to amend arrangements or have a meaningful discussion of such arrangements between the Commonwealth and the States than it is to do so in relation to treaties or conventions between Australia and other countries. If members of parliament in these new circumstances are to do their job properly, there should be an informed debate. The present housing arrangements which came into force in 1961 really continued those which were made in 1956 by the Menzies Government in replacement of those which had been made by the Chifley Government in 1945. {: .speaker-JTP} ##### Mr Bury: -- The present agreement runs from 1961. Do you mean the earlier one? {: .speaker-6U4} ##### Mr WHITLAM: -- I was referring to the substantially new agreement which was made in 1956 and which was extended for five years under the agreement which will end this financial year. There were four principal changes made by the 1956 and 1961 agreements, compared with the original agreement of 1945. The first is that 35 per cent, of the Commonwealth's grants to the States has been diverted from State housing authorities to building societies or to dwellings for members of the forces. The second is that the trend now is for State constructed houses to be sold rather than to be let. The third is that the interest rate has constantly gone up. The Minister points out, quite rightly, that the interest rate is 1 per cent, lower than that for long term loans, but he does not point out that the interest rate has constantly been going up and that the interest now paid by purchasers or tenants of housing commission houses is 50 per cent, greater than it was at the end of 1949. The other change made by these agreements over the last 10 years has been that rental rebates have been discontinued for all houses constructed since mid- 1956. I hope that all these matters will be corrected in the arrangement which will take effect from July of next year. It is just as well to consider the Commonwealth's responsibility in housing. There are many cliches which attend CommonwealthState financial arrangements and administrative arrangements. We are told that housing is not a Commonwealth function, but primarily a State function. The fact is that housing is not mentioned in the Constitution. Furthermore, until 20 years ago, no government in Australia spent any money on housing, except the Commonwealth through the War Service Homes Division. Every State house built since then has been built with Commonwealth money. Apart from this, most of the sources of borrowing for housing - banks and assurance societies - are subject to Commonwealth legislative jurisdiction. The Commonwealth itself can undertake the construction or financing of housing for present and former members of the forces, for Commonwealth employees, for migrants, for social service beneficiaries and for residents of the Territories. I shall spell this out in greater detail. The Commonwealth does construct and finance houses for former members of the forces, through the War Service Homes Division. It can do so for present members of the forces. It does not have to do what it has done since 1956, that is, to make grants to the States to build such houses. {: .speaker-JTP} ##### Mr Bury: -- It does build a few. {: .speaker-6U4} ##### Mr WHITLAM: -- Married persons' quarters. {: .speaker-JTP} ##### Mr Bury: -- In addition to the States, the Department of Works builds them. {: .speaker-6U4} ##### Mr WHITLAM: -- By and large, under this agreement, the Commonwealth can direct that up to 5 per cent, of the total funds shall be spent on dwellings for serving members of the forces. In that case, the Commonwealth gives a direct additional amount to the States to build those dwellings. The State housing commissions build very satisfactory houses for serving members of the forces - the Commonwealth has always taken that attitude - but the Commonwealth does not have to provide such houses through the State housing commissions. It can provide them through the War Service Homes Division or through any other Commonwealth authority. The Commonwealth can build houses for age pensioners or invalid pensioners. It does not have to subsidise private organisations under the Aged Persons Homes Act. The Commonwealth can make grants to the States for any housing purpose, and it has done so for some housing purposes under this legislation. It does not have to make grants to the States just for houses. It can make grants to the States for any housing environmental purposes. The Commonwealth can grant benefits to the tenants and purchasers of houses. Between 1945 and 1956 the Commonwealth made grants to the States in respect of tenants of housing commission houses who could not pay an economic rent, and in respect of houses built during that period the Commonwealth is still prepared to share with the States the cost of rebates. Half the States have ceased to co-operate with the Commonwealth in this regard. It is not necessary for the Commonwealth to make grants to the States in order to carry out this purpose. The Commonwealth itself can subsidise rents or repayments for persons who are unable, for any reason, to keep up such rents or repayments, the clear cases being bereavement or injury. Again, the Commonwealth can regulate the amounts and terms of housing loans by banks and insurance companies. I have gone through this general survey of the Commonwealth's powers in respect of housing because only when we frankly acknowledge what the Commonwealth can do will we accept the responsibilities of the Commonwealth. I come now to the things which ought to be done under the next housing agreement, even within the relatively restrictive circumstances that we have hitherto contemplated. I point out that there is nothing in what I am about to suggest concerning the conditions which the Commonwealth should lay down in any housing agreement with the States which has not already been in operation for several years in the United States of America. There the Federal Government does the things which I am about to suggest the Commonwealth Government should do in Australia. There is no question that, under section 96 of the Constitution, the Commonwealth could see that all these things were done. First of all, a more deliberate effort should be made to see that the States construct houses financed at the lowest possible interest rate, giving priority to those most in need. It may be that in practice housing commission homes are allotted to people with a great need, but this is not expressly laid down by the Commonwealth. The situation could arise that some of the people in this country most in need of houses were not able to get them, either as tenants or as purchasers. When there are such persons - and any inquiry would reveal their considerable numbers - governments ought to supply this housing. There is no reason why any family in Australia should not have housing appropriate to its needs. The Commonwealth should see that loans are made available to the States at the lowest possible interest rates. It should be possible to make loans available to the States for housing at the same interest rate as that applicable to loans made through the War Service Homes Division. In making grants to the States, the Commonwealth could specify certain standards df services, amenities and accessibility. The Minister has stated, as many persons interested in the building industry have stated, that the cost of every house could be reduced by at least £250 if the six States, the two Territories and the 1,000 local governing authorities were to coordinate their building standards. The Commonwealth could not enact building standards itself, except in the Territories, but it could lay down building standards with respect to the grants which it makes to the States. In other words, the cost in this respect could be reduced very greatly. Again, the Commonwealth could lay down - it has not hitherto - standards for the siting of the projects which the State housing commissions construct, the amenities that would be in these communities and the accessibility of the communities to transport and to employment. The State housing commissions depend entirely on Commonwealth money. There is nothing improper in the Commonwealth stating how its money is best spent - most cheaply and most conveniently. The matters in the new agreement to which 1 have referred up to this stage only involve more specific arrangements than those already made. They are along the lines of the arrangements which now have been in operation for 20 years. I come, however, to further arrangements which the Commonwealth should make by way of grants to the States. There is no provision in any arrangement between the Commonwealth and the States for the States to resume sub-standard bousing with Commonwealth money and to rebuild or replan the land so cleared. It is true that the States themselves resume land for this purpose but they are restricted very considerably in the scale of such resumptions by their financial resources. It is also true that when they have made resumptions they can then, under this agreement, spend Commonwealth money in planning and building new houses or flats. The Commonwealth, however, should be much more deliberate, much more specific, as in the United States Federal Government, in making grants to the States for resumptions, for reclamations and for rehabilitation. The next thing which I suggest the *Com.monwealth* could do, as the United States Government does, would be to make grants to the States to enable them to acquire or resume land for the purpose of development, not merely development by the States or by local Government authorities but development by approved insurance companies . and approved project builders. Levittowns are a feature of the United States landscape. It takes the powers of government to clear or replan any part of our cities. Individuals and companies do not have this power. Governments have it. If our cities are to be revived it will be done by the exercise of this government power. Financially, the Commonwealth's participation is essential. I have drawn many parallels between the situation in Australia and the situation in the United States. Our situation is different from that in the United States to the extent that the financial powers of the American States, compared with the financial powers of the Federal Administration, arc much greater than those which reside in the States in Australia. Comparatively speaking, much greater resources are available to the States in America than is the case with the States in the Australian Commonwealth. Accordingly, in any new agreement the Commonwealth should make grants to the States to acquire land, and to make the redevelopment of land or the development of new land possible in this way. This does not mean that only governments would be developers. It does mean, however, that no longer would private developers alone perform this function. It should be possible for new development to take place at cost. There is no suggestion here that the taxpayer should subsidise it. All I am suggesting is that the taxpayer should make the money available to resume and develop this land at cost. Eventually the money would come back to the taxpayer. This has happened in Canberra, but it should not be confined merely to Canberra where the Commonwealth's jurisdiction is complete. It should be extended also to all the growing centres in Australia where the Commonwealth can exercise jurisdiction via the States. The concluding additional matter which I would suggest should be incorporated in any new agreement is that the Commonwealth should provide that in any new State housing estates built with Commonwealth money there should be the same range and quality of amenities as the Commonwealth itself provides in housing estates in the Territories. Canberra is the model for urban development and planning. The Commonwealth provides much better and much more numerous community amenities in its housing estates in Canberra than are provided or can be provided by the States in the housing estates which they construct with Commonwealth grants. Summing up on this matter, I suggest that the Commonwealth, in any new agreement, should not make merely overall general grants to the States to construct housing commission, houses for sale or rental. In addition, the new agreement should provide, first, that housing areas which are declining should be reclaimed and regenerated with Commonwealth funds; secondly, that new areas of the cities which are being opened up should be planned and developed partly by governments, the further development to take place either by governments or by private project builders or insurance companies, and thirdly, that Commonwealth grants for housing in the States should be conditional on the establishment of housing estates of a standard which already exist in the Commonwealth's own Territories. There are some other features which I should mention while dealing with the general position of housing. The Minister, in his second reading speech, made no reference to the matter of slum clearance, the development of new land or the provision of community amenities. Two general propositions must be faced in this regard. The first is that governments, through their housing powers, their powers to regulate finance for housing and the siting and standard of housing, are mainly responsible for the quality of life in our cities. Town plan ning depends more on the way governments exercise their powers over housing than on any other matter. Secondly, town planning depends on transport arrangements. In this country transport arrangements are wholly governmental. Since Australia, like every industrial or commercial community, will develop principally in the cities, it is the responsibility of governments through their housing and their transport arrangements to determine the quality of our urban living. The other great matter is cost. The Minister did not mention the cost of land or the cost of housing. In the course of considering, at the Federal conference of the Australian Labour Party the week before last, the housing policy which was approved at that conference I looked up the Liberal Party's policy on housing, and I was astonished to note - perhaps not so astonished really - that the policy made no reference whatsoever to the cost of housing or the cost of land. Can anybody consider the housing position in Australia without considering those matters? Can governments properly discharge their housing responsibilities without considering the cost of housing and the cost of land? The cost of housing depends on the skill of the builders, the quality of the materials and the general standards that are imposed. To none of these matters did the Minister make reference in his second reading speech. I have shown how these are all matters that can be dealt with in the Commonwealth's grants to the States. Nor did the Minister make any reference to the cost of land. The cost of housing has gone up very greatly since the war; the cost of land has gone up by many times the amount of the increase in the *cost of* housing. Here again governments can do something about the position. State governments could, if they wished, impose land sales control, while the Commonwealth could make grants to the States to ensure that the development of land is carried out, to a very large extent, at cost. This can be done by means of grants to the States. We must get away from the idea that there are certain matters in the housing field which must be exclusively in private hands. There are no features of the housing field - whether finance, land or construction - which should be wholly in private hands. It is an anomaly, it is an archaism, that this should be so in any field. If any features of the quality or cost of housing are to be adequately tackled in Australia they must be tackled through government participation. I know that my arguments on this aspect of the matter will be immediately distorted and that I will be charged with suggesting that the Government should do the lot. This is not what I am saying; I merely say that the Government should participate. We all accept the fact now that the Government participates in the building of houses for sale or rental. As far as soldiers are concerned we accept the fact that governments participate in the financial arrangements. To a certain extent, we accept the fact that governments can regulate the source of private loans through banks and insurance societies. But we have to go further and accept the fact that governments should participate in the development of land, that governments - the Commonwealth Government through its grants to the States - should lay down standards for housing, and that the Commonwealth should, through grants to the States, see that town planning principles are observed and that substandard houses are replaced. The availability of housing and the quality of housing in Australia - and this means the quality of our urban living - will depend on the extent to which governments participate further in all fields of housing. I have referred to matters which come directly within the Commonwealth's power under section 96 of the Constitution, under which the Commonwealth can make grants to the States. Everything I have suggested until now can be done by the Commonwealth making grants to the States. Now let me come back briefly to what the Commonwealth can do itself. In this connection I shall read from the housing policy of the Australian Labour Party which was issued the week before last. That policy states, in part - >The Commonwealth can provide subsidies directly itself for tenants or purchasers who, through bereavement or injury, become unable to meet the prescribed economic rental or repayment. > >The Commonwealth can provide subsidies for bereaved or invalid persons who cannot secure housing within their means. The two situations are covered: First there is the situation of people who already have houses and are unable to keep up the payments, and secondly there is the situation of people whose means would ordinarily preclude them from ever securing houses. The Commonwealth can cater for these two situations under its social service power and has been able to do so ever since the 1946 referendum Our policy goes on - >The Commonwealth can expand the War Service Homes Division to cater for all persons who come within the Commonwealth's constitutional responsibility. The number of people who are applying to the War Service Homes Division is falling every year. It is bound to fall further unless we are engaged in further great wars. Yet the War Service Homes Division has available architects, lawyers, builders, financiers, with very great skill and dedication. Their services should be retained for the' benefit of all residents of this country for whom the Commonwealth can cater directly itself. I refer to present as well as former members of the Services, Commonwealth employees, migrants, aged and invalid persons and widows and residents of the Territories. Our policy continues - >The Commonwealth can ensure adequate finance to building societies by requiring banks and assurance companies to divert a prescribed proportion of securities to a central building society pool for allocation by a high council of society representatives to individual societies. As it is now the Commonwealth lays down certain amounts which savings banks may lend for housing purposes and it lays down certain inducements for insurance companies to invest in government securities, ft in fact does not require the banks or assurance societies to lend any particular amount or to lend on any particular conditions for housing. The great fault of the Commonwealth's attitude towards housing loans by the building societies and by the banks and life assurance societies is that the Commonwealth is solely preoccupied here with housing units: it has not concerned itself with housing environments. The Commonwealth should require or encourage banks and life assurance societies - and building societies, which depend totally for their funds on the Commonwealth directly or by way of banks and assurance societies governed by the Commonwealth - to participate in project building. Project building need not be drab. Anybody who has been on either side of the North Atlantic knows that project building not only is the most economical but also can be amongst the most attractive forms of environmental development. It is clearly much cheaper, but it is also largely more convenient for people to be able to participate, if they want to, in project building. In the United States certainly, the banks and the insurance companies participate very actively in project building; in Australia they do very little indeed, and, as far as the Commonwealth Government is concerned, they need not do so at all. Here again the Commonwealth would have a crucial influence on building costs by laying down the standards on which banks or insurance companies or building societies should make their loans. Project building is very often the most economic because it is carried out by big companies and, as everybody knows, the big construction companies are able to attract and retain the most skilled operatives in every section of the building field, whether it is quantity surveying, architecture, finance or the various trades involved. Our building in Australia - particularly our domestic building - is unnecessarily diffuse and expensive because we have not used our resources to good advantage. The individual cannot plan these things himself but the organisations can and the Commonwealth Government should encourage them to do so. There are a few concluding matters in connection with which the Australian Labour Party suggests that the cost of housing to the individual could be effectively reduced. First, we suggest that the Commonwealth Government should make a grant of £100 for the reduction of home mortgages in respect of each child born during the period of a mortgage. As honorable members know, the homes savings grant can be spent on any purpose at all. Marriage grants such as we suggest - that is, Commonwealth grants to reduce a mortgage - would provide assistance in housing at the time when help would be most appreciated by the community and by the individual. Secondly, the Australian Labour Party believes that the Commonwealth should expand and develop the Building Research Division of the Commonwealth Scientific and Industrial Research Organisation and stimulate the efforts of other research bodies. Honorable members will have noticed that for several Budgets past the building research appropriations for the C.S.I.R.O. have been stationary. Thirdly, we believe that the Commonwealth should negotiate with the States to obtain uniformity of building codes, standards and practices. No national standards are laid, down for materials or workmanship or for general installations. The Commonwealth itself could lay down standards where it makes grants to the States. It could greatly encourage such provisions through its legislative powers over banks and insurance companies, and thus over building societies. As for the rest, it should negotiate with the States to see that there are uniform codes. After all, the Commonwealth either provides the money or regulates the private sources of the money used for housing. The Commonwealth should at least take the initiative to see that that money is spent to the best advantage. I repeat that the individual cannot do this. Even large organisations cannot do it. But governments can and until governments take the initiative, every person who is buying a house or renting a house will pay hundreds of pounds more than he needs to pay because governments have not effectively carried out their function in this regard. The fourth proposal of the Australian Labour Party is that the Commonwealth should indemnify those States which forgo stamp duties and conveyancing fees on housing transactions. It is ironical that we should make that suggestion at the very time when these duties and fees are being introduced in Commonwealth Territories. There are two ways of approaching these regressive forms of taxation. One is the Government's way - to see that everybody in the Territories pays just as much as anybody pays in the States. This is said to be fair. The other way surely is for the Commonwealth itself to remove all these imposts and to enable the States to do so by reimbursing them for those charges which are removed. We all know that these imposts are passed on; that the same percentage which applies to every bit of equipment and to every order which is placed in respect of a house also goes on to all those duties and fees which are imposed by State Governments and which are now to be imposed by the Commonwealth in the Territories. I concluded by rounding out some of these other matters because they all illustrate the things which governments, and only governments, can do' to make better houses, more economic housing and better housing environments available to the Australian people. The Australian people depend on governments to do these things for them. The individual, the family, the individual communities and the several institutions are powerless to do it. Governments can do all these things. Until governments move in these matters our citizens will pay more and they will get less value. Now, in all these respects the Commonwealth has the principal responsibility. All the money that governments spend on housing in Australia comes from the Commonwealth. Nearly all the money which is borrowed by individuals for housing purposes comes from institutions concerning which the Commonwealth has the power to make laws. The Bill which we have been debating, the Loan Housing Bill 1965, is the last of the five annual bills under the Commonwealth and State Housing Agreement of 1961. I have dealt with these matters in some detail because I hope that the Minister will be able to effectuate some of them when he is making arrangements with the State housing ministers for the housing agreement of 1966. We should know from the experience of the Chifley Government's Commonwealth and State Housing Agreement of 1945 and the Menzies Government's housing agreements of 1956 and 1961 what can be done and how much more still has to be done. I believe that of all the Ministers of the present Government there is no man who is so seised of the possibilities and is so well equipped to discharge them as the Minister for Housing is. {: #subdebate-67-0-s1 .speaker-K7J} ##### Sir JOHN CRAMER:
Bennelong -- **Mr. Speaker,** if any person needed to be convinced of the policy of the Australian Labour Party and its final socialist objective he would only have had to listen to the speech of the Deputy Leader of the Opposition **(Mr. Whitlam)** tonight. In the course of his speech he tried to forecast that he would be misunderstood. At one stage he said: " I must not be misunderstood as meaning that I want governments to do everything. I do not." I understood him to mean that he wanted certain things handed out to private enterprise. But the whole of his speech was on the line that the Government should do everything. The Government should take control. The Government should order the States. The Government should put a string to the money that it gives to the States, requiring them to do certain things. The honorable member encouraged all these ideas. If any person could listen to this type of speech and not conclude that the ultimate objective of the Deputy Leader of the Opposition is to have complete and absolute control over housing in Australia in the hands of the Commonwealth, with the Commonwealth to provide all the money for housing, then I just do not understand common English. This policy is, of course, diametrically opposed in principle to the policy of this Government or any government standing for the maintenance of a system of individuality and of free enterprise in any country. The honorable gentleman's policy could not possibly be tolerated. 1 agree with the Deputy Leader of the Opposition when he says that housing is without doubt one of the most important necessites of our civilised life. I agree that this is true. This point was made in another way by the Deputy Leader of the Opposition. In my opinion, housing represents, not only shelter, but homes. Homes are not only shelter but, I believe, they are the very basis of our national existence. It is in homes that all the love, affection and relationships of human beings are brought together. No nation can be great unless its people are housed in a proper and decent fashion. I believe that every man, woman and child in the community has the right to expect decent and civilised housing. I believe in these things. I have always believed in them and, indeed, I have worked for them. But the Deputy Leader of the Opposition failed to go into this matter. In this desire to perpetuate his socialist objective, he failed to look at the facts as they are. It cannot be denied that the standard of housing in Australia is one of the best in the world, even at this point of time. This has been so for quite a time. Australia's standard of housing today is, without doubt, one of the best standards in the world. I will deal with that point in a moment or so from an historical point of view to show just what has happened in the field of housing, and the cause of the difficulties that we have experienced in recent years. It is true that, following on World War I], we ran into certain difficulties in relation to housing shortages throughout Australia. But I would point out - and I think I can prove this - that this was mainly because of the policy of the Labour Party. Indeed, the very policy that the Deputy Leader of the Opposition has expounded in this House tonight would bring about the same sort of difficulties unless each State were socialised or there were a socialised Commonwealth. He could not deal with the two matters and get away with it. This serious shortage developed after World War II. Private investment was driven completely out of the building industry by the policy of the Labour Party which is akin to the policy expounded here tonight by the Deputy Leader of the Opposition. {: .speaker-K5L} ##### Mr Cope: -- What tripe. {: .speaker-K7J} ##### Sir JOHN CRAMER: -- It is true. No one can deny that the building of rental housing ceased altogether as a result of the policy of the Labour Party when that party formed the Government. Money for investment in housing was diverted to other forms of investment. This actually caused the unprecedented inflationary trends that this country suffered and which were brought about by government interference. This state of affairs was brought about by Labour's policy. Let us think back for a moment to prewar conditions of housing in Australia. There may not be many members in this House who have an intimate knowledge of those conditions or, because of the conditions in which we live now, many members may fail to think of those circumstances. But it is a fact that, prior to the Second World War, there was no actual shortage of housing in Australia. In any suburb of any Australian city a person could go and find a house to let or a flat to let in almost every street. Anybody who can think back at this time to housing conditions prior to the war will realise that this situation existed in Sydney, Melbourne and in most other cities in the Commonwealth. Indeed, there was competition by owners to persuade prospective tenants to take their places. This state of affairs existed just prior to the Second World War. I know of my own knowledge, for instance, that the owner of every block of, say, 12 flats provided a free flat for a caretaker, in the hope that the presence of a caretaker would persuade people to rent the flats and help to keep the tenants happy. These were the conditions that existed. There was only one problem them - slum clearance. This matter was investigated by a committee, and this was the only aspect of housing that was investigated. There was no question of a housing shortage then, because at that time there was in fact no shortage. At the end of the war, **Mr. Speaker,** the Australian Labour Party - the same Labour Party that is in opposition in this Parliament today - was in office. The Labour Government insisted on continuing the wartime controls. I am sure that honorable members opposite will not deny this, because it is in line with their policy. The Labour Government set out to create a Commonwealth housing commission that would do the very things that have been stated in this House tonight by the Deputy Leader of the Opposition. That commission was destined to build practically all the houses to be built for rental in Australia, and Labour's policy was that all houses built were to be for rental. The Labour Government continued controls on land sales. Even this aspect of policy received a passing reference by the Deputy Leader of the Opposition this evening. The Labour Administration also retained the controls on such materials as were available at the time. This policy, of course, was intended to bring about the preferred socialist state. The words of **Mr. Dedman,** who was Minister for Post-war Reconstruction in the Labour Government, have been quoted many times in this House and they should never be forgotten by the people of Australia. When challenged in this chamber, he said that Labour did not want to build up a nation of little capitalists. This meant that the Labour Party did not want private ownership to be fostered. Notwithstanding the legal interpretation placed on Labour's scheme this evening by the Deputy Leader of the Opposition, that scheme was found to be unconstitutional, and the Labour Government then resorted to the 194S Commonwealth and State Housing Agreement. I do not know what is the explanation that the honorable gentleman gives for that. But it is a fact that Labour could not carry out its purpose. So it entered into an agreement with the States in 1945. Under that agreement, money was lent to the States at bond rate of interest. Later I shall mention what this Government is doing about lending money to the States. Because the Labour Government could not get its proposed Commonwealth housing commission operating, that agreement provided only for housing for rental. I emphasise this, because it was an important point of policy in the minds of those who composed the Labour Government in 1945. The agreement was designed to provide houses only for rental. There was to be no encouragement of home ownership. If a State, in its discretion, sold a dwelling that had been financed with funds provided by the Commonwealth under this agreement, the money received had immediately to be repaid to the Commonwealth. Money obtained from rentals, of course, was retained until the period of the agreement expired. The whole basis of this agreement was rental housing. Rent control was retained by the Commonwealth as long as possible and then was handed over to the States. This completely prevented private enterprise from building houses for rental in Australia from that time on. We keep forgetting these facts, **Mr. Speaker.** When we forget these things, the arguments put by the Deputy Leader of the Opposition become very persuasive. But these facts reveal the history of the background in these matters. You will recall that, under the 1945 agreement, rentals were charged on the basis of a tenant's ability to pay. They had no relationship whatever to the building cost of the house. The rental was based fundamentally on the ability of the tenant to pay and the subsidising of losses by the Commonwealth ended only in 1956. In other words, during the whole of the Labour Party's term of office the private ownership of homes was completely discouraged. That cannot be denied. When the present Government came to power in December 1949 it was saddled with the old agreement made by the Labour Government. This Government had to carry out the terms of that agreement until it expired and a new agreement was made in 1956. {: .speaker-K5L} ##### Mr Cope: -- That is not right. {: .speaker-K7J} ##### Sir JOHN CRAMER: -- It is true. As the Deputy Leader of the Opposition said, the 1956 agreement constituted a major change in that it set aside part of the available money for building societies, which helped to encourage home ownership, and it also ended the subsidy. The interest rates were lowered and that allowed the States to subsidise home building as they desired. The States were encouraged to sell homes, thus increasing home ownership and, in fact, most of the States sold many houses. I have not time to quote the figures tonight, but they show that the percentage of homes sold by the States which are parties to this agreement has increased enormously -since 1956. In New South Wales very few homes were sold while the old agreement remained in force. The making available of money to the building societies attracted further funds that would not have been available had all the money gone to the State housing commissions. Under the 1961 agreement 30 per cent, of the money made available by the Commonwealth to the States went to the building societies and this resulted in the building of more houses than would have been the case had all the money been expended by the State housing commissions. The 1961 agreement raised to 30 per cent, the amount of the Commonwealth funds available to building societies and, in addition, allotted 5 per cent, of the funds to the building of homes for the Services. It provided money for this purpose on a £1 for £1 basis, creating a revolving fund so that the available money could be turned over to a greater degree than in the past. The term of the loan to the building societies is 31 years and the term of the loan by the Commonwealth to the States is 53 years, which means that the money can be turned over almost twice before it is repayable to the Commonwealth. Under the 1961 agreement the rate of interest was reduced to 1 per cent, below the bond rate, whereas under the 1945 agreement it was at the bond rate, lt is interesting to see that this Government, in the period from 1956 to 1965, during which it has had control of the Commonwealth and State Housing Agreement, has provided £391,526,000, which has built 132,773 dwellings. I refer there to dwellings that have been sold, financed and rented. It is interesting to see that of the 132,773 dwellings, those sold and financed with money provided to the building societies totalled 83,344 which is a tremendous percentage of the total number of buildings erected. That justifies the policy of this Government to encourage the development of home ownership in the community which, I believe, is fundamental to our desires in this nation. I believe - I do not say this merely because I am a member of this House - that any impartial observer who looks into this question will say that this Government's record in housing is better than that of any other government in our history and compares more than favourably with that of any other country. Last year alone the Government provided approximately £115 million for housing in a direct sense. This sum included £51 million under the Commonwealth and State Housing Agreement and £35 million for war service homes. A further £4 million was provided under that splendid homes for the aged scheme which was originated by this Government. I believe that the Government should receive great credit for the introduction of this scheme because it dealt directly with a section of the community which was unable to help itself. The scheme, I believe has been a great source of comfort to elderly people. The Government provided about £7 million for housing within the Territories which are under our control. In addition, it set aside, although not all the money has been spent, £10 million under the new homes savings grant scheme which also is breaking new ground and about which I have spoken previously in this House. I believe that all these things, added together, show that this Government's record in housing is unsurpassed. Honorable members may suggest all sorts of little gimmicks, as the Deputy Leader of the Opposition has been trying to do, such as an extra £100 for each child born, and so forth. The little gimmicks would be all very well if we could afford them, but there must be limitations to this kind of thing. In addition to the matters that I have mentioned, the Government has taken other action which I believe has been beneficial to the housing position in Australia. As an example I cite its action in amending the savings bank regulations to enable the banks to invest in housing 35 per cent, of the depositors' balances that they were holding. It is very interesting to note also that as a result of this action the advances from the savings banks for housing rose from £58.6 million in 1961-62 to £149 million in 1964- 65. These are really sensational figures which indicate clearly what the Government has been doing to encourage housing. The number of houses commenced in 1961-62 was 82,470. In 1964-65 the estimated number of houses commenced rose to 116,738. I have mentioned the new homes savings grant scheme under which the Government is giving £250 for every £750 saved. The effect of this scheme will not be noticed immediately, but young people are already taking advantage of it and are establishing accounts in the savings banks. The increased deposits will enable the banks to lend more for housing. The young depositors will then be building homes which they will own. The insurance scheme, which is not yet ready but which has been referred to by the Minister, will be something quite new in Australia and will encourage people to invest more money in housing. The Minister for Housing told us that 112,500 homes were completed in 1964-65. This in itself is a wonderful achievement, but let us measure it against the increase in our population. Sometimes we do not stop to think of these things. I ascertained from the Commonwealth Statistician today that between March 1964 and March 1965 our population increased by 222,122. So, the increase would be approximately the same for the period from June 1964 to June 1965. In 1964-65 we built 112,500 houses. In other words, one new home was built for less than every two increase in our population. I do not know of any other country whose housing figures could compare with that. Credit must be given to the Government for its operations in the field of housing. The only State in Australia where there is any apparent shortage of houses is New South Wales, which for the last 24 years has been under the control of a Labour Government. It has been quite clear to anybody who has watched this problem that where Labour has gone out of office in a State, in no time the housing problem in that State has been solved. I have not the slightest doubt that, within a reasonable time, the Askin Government will solve the housing problem in New South Wales. It cannot be expected to unscramble the egg in five minutes, but there is no doubt that it will succeed. Labour does not seem to understand yet that interference by governments in housing is the cause of some of our present problems. The very things that the Deputy Leader of the Opposition advocated tonight are the kind of things that would bring further troubles to our economy. One could talk for quite a long time about what has happened in New South Wales. The reason for the shortage of houses in New South Wales is the formerLabour Government's persistence in maintaining vicious and unjust rent control. Rentals were pegged to 1939 money values. I do not know how any government could continue to adopt such a policy for so long. Admittedly, it is not possible to unravel the problem overnight. That would cause hardships which I do not think any government would be justified in imposing upon the people. But the truth of the matter is that the Labour Government, for the period it was in office in New South Wales, deliberately legislated for injustice. It deliberately kept in force laws that were completely unjust to a large section of the community. This created an anomaly which, in my opinion, was one of the reasons why the Labour Government was defeated in New South Wales. Young people today are getting a splendid deal from this Government. They receive assistance to purchase a home. However, in New South Wales, people who want to rent homes find that they have to pay very high rentals. That is because the Labour Government persisted in pegging rents at 1939 levels. So, we have a mother and father living with their sons and daughters in a home and paying a rental that is pegged in relation to 1939 money values. The sons and daughters get married and go to live in other homes. The mother and father pay about £2 a week for their home but the sons and daughters find they are paying about £10 a week for homes that are only half as good as their parents' home. The people are disgusted with that position. They realise that an inequity, an injustice, is being perpetrated. That is what has caused the position in New South Wales. I believe that the Askin Government will rectify that position. I do not want to stand up in this House and give that Government advice on what it ought to do. I believe that it knows what it ought to do. It has already made certain suggestions and taken certain action which will help people in New South Wales. I refer particularly to the release of land at very low annual payments. The Askin Government has also initiated the idea of developing certain parts of Sydney by means of residential buildings and projects. In my opinion that will have the effect of rehabilitating certain parts of that city. It was a lucky day for the people of New South Wales when they threw out the Labour Government, with its prehistoric ideas and its belief that every ill can be cured by a system of controls and government interference. That is not so. If we give the economy a chance, if we let it be free and if we let the people have freedom of choice and their own individuality, then we will have good government. We will never have a happy and contented nation if we have the type of system that was advocated here tonight by the Deputy Leader of the Opposition. He said that the Government should put in the big boot and, wherever possible, control what the State Governments do with grants that are made to them. He suggested that the State Governments should resume land; but he did not say at what figure it should be resumed. No doubt, it would not be a fair figure. He would adopt anything at all in order to get complete, socialised control by a government. In my opinion, that is absurd; it is not what the people of Australia want; and it will not cure the ills from which honorable members opposite think we are suffering. Debate (on motion by **Mr.** L. R. Johnson) adjourned. House adjourned at 10.38 p.m. {: .page-start } page 135 {:#debate-68} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions upon notice were circulated - {:#subdebate-68-0} #### Commonwealth Administrative Appeals. (Question No. 890.) {: #subdebate-68-0-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Prime Minister, upon notice - >What additional or different methods of appeal from decisions of Commonwealth departments and instrumentalities have come into operation since his answer to me on 14th May 1958 (" Hansard ", page 1843)? {: #subdebate-68-0-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- Since 1958 there has been a number of changes in the methods of appeal from decisions of Commonwealth departments and instrumentalities and the citations of some of the statutes have also been changed. I am therefore providing a revised list of the boards, tribunals, committees or courts to which such appeals can be made. {:#subdebate-68-1} #### Garlic. (Question No. 939.) {: #subdebate-68-1-s0 .speaker-RK4} ##### Mr Hayden:
OXLEY, QUEENSLAND n asked the Minister for Trade and Industry, upon notice - {: type="1" start="1"} 0. Are imports of garlic being received in this country. 1. If so, what are the sources of these imports, and what quantities have been received from each source during each of the past twelve months. 2. Will he take steps to arrange for the domestic garlic growing industry to be granted tariff protection against imported garlic. {: #subdebate-68-1-s1 .speaker-009MB} ##### Mr McEwen:
CP -- The answers to the honorable member's questions are as follows - 1 and 2. Imports of garlic are not separately recorded in official statistics. I am, however, informed that garlic has recently been imported from the republic of China and from Mainland China. Because of the lack of official statistics, the quantities imported are not known. {: type="1" start="3"} 0. The domestic producers of garlic have not requested protection by the tariff to assist them to meet competition from imports. If an application is made, establishing the need for assistance, consideration would be given to referring the question to the Tariff Board. {:#subdebate-68-2} #### Commonwealth Benefits for Aliens. (Question No. 1011.) {: #subdebate-68-2-s0 .speaker-6V4} ##### Mr Daly:
GRAYNDLER, NEW SOUTH WALES y asked the Prime Minister, upon notice - {: type="1" start="1"} 0. What benefits are granted or paid to aliens in Australia by the Commonwealth in respect of (a) housing loans, (b) social services, (c) education and (d) other benefits? 1. What qualifications are required of aliens in order to obtain these benefits? 2. How many benefits in these categories have been granted to aliens in each of the last five years, and what are the nationalities of the aliens concerned? {: #subdebate-68-2-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answers to the honorable member's questions are as follows - 1 and 2. Benefits granted or paid by the Commonwealth to aliens resident in Australia are as follows: - {: type="a" start="a"} 0. Housing Loans. - The only housing loans provided by the Commonwealth in the States are those provided under the War Service Homes Act. A person's eligibility for assistance under this Act depends upon the nature of his war service and his being otherwise able to satisfy the eligibility qualifications contained in this Act. Very few, if any, aliens would be eligible for such assistance. The home savings grant is payable to aliens who make their homes in Australia. An alien, in addition to meeting the general requirements of the Home Savings Grant Act in regard to eligibility for a grant, must also have resided in Australia throughout the period of three years immediately preceding the date he entered into the contract to buy or build his home, or the date construction of the home commenced if that is earlier. So far as the Commonwealth is concerned, alien migrants may be provided with dwellings constructed under the Commonwealth-State housing schemes and therefore receive the benefits of the interest concession provided by the Commonwealth. The extent to which aliens are eligible for benefits under these schemes is decided by each State, but in most States they are treated in substantially the same manner as Australian citizens. Housing benefits available to aliens in the Australian Capital Territory and the Northern Territory by the Commonwealth are the same as those available to other residents of each Territory. 1. Social Services. - Under the Social Services Act aliens in Australia may be granted and paid unemployment, sickness and special benefits and maternity allowances and child endowment. For unemployment, sickness and special benefits aliens are subject to exactly the same conditions as apply to Australian citizens. The qualifications for a maternity allowance are the same for an alien woman as for an Australian citizen but, where the woman was a British subject prior to her marriage or where the woman or her husband has not resided in Australian for twelve months immediately prior to the birth of the child, payment of the allowance is deferred (unless the woman is likely to remain in Australia) until the woman has completed twelve months residence in Australia. Child endowment also may be granted and paid in respect of the child of an alien father provided the child was born in Australia, or the mother of the child is a British subject, or the Department of Social Services is satisfied that the child is likely to remain permanently in Australia. In all other respects aliens are subject to the same conditions as apply to Australian citizens. 2. Education. - In general, there is no differentiation between aliens and Australian citizens in considering applications for education assistance. Some aliens would be eligible to be considered as applicants for Commonwealth scholarship schemes, eligibility of the applicant being based upon his permanent residence in Australia. Benefits payable to aliens would be those payable to other successful scholars under the particular scheme. 3. Other Benefits. - The provisions of the National Health Act 1953-65, dealing with the payment within Australia of medical, hospital and pharmaceutical benefits, do not require recipients of these benefits to be Australian citizens. Accordingly, aliens who are resident in Australia and who satisfy the normal requirements for payment of health benefits (for example, in the case of medical benefits, membership of a registered health insurance fund), arc entitled to receive benefits in the same way as Australian citizens. {: type="1" start="3"} 0. It is not the practice for separate statistics to be kept which would indicate the number of aliens who might have benefited under each type of service listed above. This part of the honorable member's question therefore cannot be answered. {:#subdebate-68-3} #### Inflow of Capital. (Question No. 1031.) {: #subdebate-68-3-s0 .speaker-KXZ} ##### Mr Peters:
SCULLIN, VICTORIA s asked the Prime Minister, upon notice - {: type="1" start="1"} 0. Is it a fact that a large amount of capital Inflow comes to Australia as imported goods? 1. Has his attention been drawn to the statement by **Mr. Puzey,** Director of the Australian Industries Development League, that most of the imports coming here are not necessary to our way of life, and the statement by **Mr. R.** W. C. Anderson, Federal Director of the Chamber of Manufactures, that about £200,000,000 could be sliced off Australia's import bill immediately without affecting local development or employment opportunities? 2. If so, is it a fact that » considerable portion of Australia's imports could be classified as unnecessary? 3. If the answers to these questions are in the affirmative, would action to reduce the importation of goods into Australia be a means of decreasing Australia's dependence on capital inflow and thus relieve the Right Honorable the Treasurer of the necessity of pleading with the United States of America to continue to provide finance which is used on unnecessary imports? {: #subdebate-68-3-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answer to the honorable member's questions is as follows - >My attention has been drawn to the statements on this matter made by **Mr. Puzey** and **Mr.** > >Anderson. Although there is no full statistical record of the amount of overseas capital received in the form of imported goods for which no payment is made, available data suggest that the capital inflow in this form is a variable but relatively small proportion of total capital inflow. {:#subdebate-68-4} #### Vietnam. (Question No. 1045.) {: #subdebate-68-4-s0 .speaker-1V4} ##### Dr J F Cairns:
YARRA, VICTORIA · ALP rns asked the Prime Minister, upon notice - {: type="1" start="1"} 0. What countries are now supplying military personnel for combat operations in South Vietname? 1. How many personnel are being supplied by each country? {: #subdebate-68-4-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answer to the honorable member's questions is as follows - >North Vietnam has sent, and is sending into South Vietnam large numbers of military personnel for subversion and for combat operations including large units of regular North Vietnamese armed forces. It is, in fact, responsible for initiating and extending combat operations in calculated aggression against South Vietnam. > >The South Vietnamese themselves have committed substantial forces in their own defence. The regular army of South Vietnam numbers more than 200,000 men and is supported by an even larger para-military force. In addition, South Vietnam air and naval units are constantly engaged against the enemy. > >In response to requests by the Government of South Vietnam, a number of countries have provided, and are providing, military personnel to assist the South Vietnamese in the defence of their country. The United States has made available military personnel in regular units and as military advisers and instructors. Australia has acted similarly. Other countries, including the Republic of Korea, New Zealand, the Philippines and Thailand have sent military personnel to South Vietnam to assist the South Vietnamese in various tasks. > >The figures of military personnel in South Vietname are constantly changing. North Vietnam continues to infiltrate military personnel into South Vietnam. The numbers of military personnel opposing this form of aggression - both in the armed forces in the Republic of Vietnam and from friendly countries responding to the Vietnamese Government's request for assistance - are increasing. The form of Australia's commitment has been publicly announced. It would not be appropriate for the Government of Australia to announce the details of military steps being taken by other countries. {:#subdebate-68-5} #### Medical Students and Teaching Hospitals. (Question No. 1047.) {: #subdebate-68-5-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Prime Minister, upon notice - {: type="1" start="1"} 0. How many medical students are enrolled at each university? 1. How many beds are available in the teaching hospitals associated with each university? {: #subdebate-68-5-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. The number of medical students enrolled at universities in 1964 is set out in Table 1. claim and, where applicable, the date on which the claim was determined: - Note. - Clinical numbers do not include Third Year students who carry out some clinical work in Third Term. {: type="1" start="2"} 0. The number of beds available in teaching hospitals associated with each university in 1964 is set out in Table 2. {:#subdebate-68-6} #### Public Service Arbitration Claims. (Question No. 1053.) {: #subdebate-68-6-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Prime Minister, upon notice - {: type="1" start="1"} 0. What claims did the Administrative and Clerical Officers' Association submit to the Public Service Arbitrator in 1963 and 1964? 1. On what dates were the claims submitted? 2. Have any of the claims been determined? If so, on what dates were they determined? 3. Why have the other claims not yet been determined? {: #subdebate-68-6-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answers to the honorable member's questions are as follows - 1, 2 and 3. The following table shows the claims which the Administrative and Clerical Officers' Association submitted to the Arbitrator during 1963 and 1964, the subject matter of each such {: type="1" start="4"} 0. The Arbitrator has generally been hearing claims having a higher priority than any of those listed in the table appearing in the answer to Questions 1, 2 and 3. The claims have, however, been discussed at statutory conferences convened by the Public Service Arbitrator pursuant to Section 12 of the Public Service Arbitration Act. All of the claims listed in the table, excepting that for economists, have now been referred to by the Arbitrator to public hearing on the 10th August, 1965. Taxation Branch: Arbitration Claims. (Question No. 1056.) **Mr. L.** R. Johnson asked the Prime Minister, upon notice - >Is it a fact that in February 1963, a log of work value claims affecting Commonwealth taxation department employees was lodged by the Federated Clerks' Union and the Administrative and Clerical *Officers'* Association with the Public Service Arbitrator? > >Did the Arbitrator refer the unions to the Public Service Board for negotiation? > >Were negotiations delayed by the Board on the grounds that it intended to undertake an investigation into the Taxation Department with a view to staff re-organisation? > >Did the Public Service Arbitrator, in the last round of conferences in February 1965, express concern that the Board had not undertaken the review and thai, as a result, consideration of the unions' claims had not been advanced? > >Will he slate (a) whether the Public Service Board has contributed to the delay in hearing the claims, (b) whether staff re-organisation has yet been undertaken, (c) whether the hearing of claims can be expedited, and (d) when the hearing of the claims is likely to be finalised? {: #subdebate-68-6-s2 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. Yes. 1. The Public Service Arbitrator indicated that the claims should be discussed between the parties. 2. The Board informed the Federated Clerks' Union and the Administrative and Clerical Officers' Association that, in accordance wilh its expressed policy and consistent with what it had done in response to many other claims, it would review the classification structure in certain areas of the Taxation Department. The claimants were advised that the purpose of the review was to determine whether or not the existing classification structure required variation or modification. This examination has in fact been completed and the results notified to the associations. 3. No. The Arbitrator was informed that the review was proceeding. The Arbitrator did ask that the investigation process in this matter be pursued with the greatest of expedition consistent with fairness and thoroughness. 5. (a) The listing of claims for hearing is solely the prerogative of the Public Service Arbitrator. The Board indicated to the Arbitrator that if the associations so wished hearings could proceed without awaiting the result of any organisation review, (b) See answer to Question 3. (c) Claims have been listed for public hearing on the 10th August 1965. (d) No estimate can be given as the time taken largely depends upon the nature of the case the associations wish to submit. {:#subdebate-68-7} #### Steel. (Question No. 1091.) {: #subdebate-68-7-s0 .speaker-KDV} ##### Mr Jones:
NEWCASTLE, VICTORIA s asked the Minister for Trade and Industry, upon notice - >What is the wholesale price of B.H.P. steel (a) plates and (b) sections in each capital city, Newcastle, Wollongong and Whyalla? {: #subdebate-68-7-s1 .speaker-009MB} ##### Mr McEwen:
CP -- The answer to the honorable member's question is as follows - >The basis price is the same in each of the capital cities, and the other three centres named, (a) Plates, £49 2s. 6d. per ton. (b) Sections, Merchant Bar, £44 15s. per ton; Structural, £45 per ton. {:#subdebate-68-8} #### Industrial Arbitration. (Question No. 1095.) {: #subdebate-68-8-s0 .speaker-KNM} ##### Mr E James Harrison:
BLAXLAND, NEW SOUTH WALES on asked the Minister for Labour and National Service, upon notice - {: type="A" start="I"} 0. Will he table the decision of the Commonwealth Industrial Court (MacKenzie v. Administrative and Clerical Officers' Association, Commonwealth Public Service) of the 26th March 1962? {: type="1" start="2"} 0. Is he able to say whether this decision places upon all registered organisations (employer aud employee) an embargo against the appointment of "managers" without any voting rights for an indefinite term of office? 1. If such an embargo is applied by this decision, will he take the necessary action to restore to organisations (employer and employee) their norma] right as a business to appoint " managers " for any term and under such conditions, except the right to vote at the administrative level of the organisation, as the organisation itself may desire? {: #subdebate-68-8-s1 .speaker-009MA} ##### Mr McMahon:
LP n. - The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. I do not think tabling is called for as the decision is published in Federal Law Reports (5 F.L.R. p. 342). 1. In Mackenzie v. the A.C.O.A. one of the findings of the Court was that the then rules of that organisation failed to comply with the Conciliation and Arbitration Regulations in that they did not provide for the election of the General Secretary of the Association. This decision has force as a precedent in the Industrial Court and as a guide to the Industrial Registrar when applying the relevant provisions of the Conciliation and Arbitra-tion Act. However, the rules of each registered organisation have to be considered in their own context. 2. This raises a question of policy. The matter is, however, receiving my attention. {:#subdebate-68-9} #### Housing. (Question No. 1105.) {: #subdebate-68-9-s0 .speaker-K9M} ##### Mr L R Johnson:
HUGHES, NEW SOUTH WALES son asked the Minister for Housing, upon notice - {: type="1" start="1"} 0. How many applications to (a) rent and (b) purchase homes have been received by each Slate housing authority each year since the inception of the first Commonwealth and State Housing Agreement? 1. How many applications for homes are now outstanding in each State? {: #subdebate-68-9-s1 .speaker-JTP} ##### Mr Bury:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. The numbers of applications received by each State housing authority to (a) rent and (b) purchase homes during each year of the required period are in the following table to the extent that the figures are available from the annual reports of the State housing authorities and from the records of the Department of Housing. It should be pointed out that a proportion of applicants proved to be ineligible or withdrew their applications. {: type="1" start="3"} 0. The numbers of applications outstanding with each State housing authority to (a) rent and (b) purchase homes at the 30th June 1964 are given in the following table - {: type="a" start="a"} 0. No figures available from South Australian Mousing Trust {:#subdebate-68-10} #### Housing Finance: Building Societies. (Question No. 1106.) {: #subdebate-68-10-s0 .speaker-K9M} ##### Mr L JR Johnson:
HUGHES, NEW SOUTH WALES son asked the Minister for Housing, upon notice - {: type="1" start="1"} 0. How many co-operative building societies are operating in each State, in the Northern Territory and in the Australian Capital Territory? 1. What funds have been available to building societies during each of the last five years? 2. Which (a) trading or saving banks, (b) insurance or assurance companies and (c) friendly societies, have made advances to building societies during each of these years, and what amount was advanced in each case? 3. What are the details of other miscellaneous advances to building societies during each of the same years? 4. Is he able to state which insurance companies made no advances to co-operative building societies during the same years? {: #subdebate-68-10-s1 .speaker-JTP} ##### Mr Bury:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. There are no figures available of the numbers of co-operative building societies actually operating but the following table shows the numbers of these societies registered as at 30th June 1963 which is the latest date for which the State figures have been published - {: type="1" start="2"} 0. Funds made available to co-operative termi-of the most recent five years for which all figuresnating building and housing societies during each are available were as follows - Similar information is not available for the perma-Statistician; but for only the two dates shown. Thenent and Starr-Bowkett building societies. However, changes in the liabilities between these two dates the following figures of the liabilities of these would be some indication of the net amounts of societies are available from the Commonwealth funds made available during 1962-63. {: type="1" start="3"} 0. This information is not available. 1. See answer to Question (2). No additional information is available. 2. This information is not available. Motor Vehicle Industry. {: #subdebate-68-10-s2 .speaker-009MB} ##### Mr McEwen:
CP n.- On 13th May 1965 the honorable member for Port Adelaide **(Mr. Birrell)** asked the following questions, without notice - What was the total sale in Australia of Japanese four wheel drive vehicles for each of the past three years? Is the Minister aware that because of falling sales Pressed Metal Corporation Limited in Sydney, which produces the British Land Rover, has been compelled to reduce its labour force this week and as a result 36 employees have been dismissed. The answers to the honorable member's questions are as follows - Sales of four wheel drive vehicles are not recorded in published statistics. However, registration figures for new Japanese four wheel drive vehicles over the past three years were: 1962 - 430; 1963-935; 1964-1,686. It is understood that Pressed Metal Corporation Limited in Sydney has recently dismissed 36 men because of a reduction in the Land Rover production schedule. Auditor-General. {: #subdebate-68-10-s3 .speaker-N76} ##### Sir Robert Menzies:
LP -- On 20th May 1965 the honorable member for Hindmarsh **(Mr. Clyde Cameron)** asked me without notice whether the Auditor-General is completely free to supply information when requested to do so by any member of the Parliament, covering any item of expenditure of Public Funds and, if he is not, what restrictions are placed upon htm and what arc the reasons for such restrictions. I told the honorable member 1 did not know but would have inquiries made immediately. Information on the expenditure of public funds is obtained by the Auditor-General and his officers for the purposes of discharging his duties under the Audit Act and particularly for the submission of reports to the Parliament. His duties do not include the supply of information at the request of individual members of Parliament. It would not be proper for him to supply information other than in his reports to the Parliament. Members' requests for information regarding any item of expenditure of public funds should be addressed to the Minister concerned. {:#subdebate-68-11} #### Broadcasting. (Question No. 1063.) {: #subdebate-68-11-s0 .speaker-KXI} ##### Mr Webb: b asked the Postmaster-General, upon notice - {: type="1" start="1"} 0. Did the Australian Broadcasting Commission 6.45 a.m. news on 1st May report the right honorable the Treasurer as saying that the decision by the Commonwealth Government to undertake still further substantial commitments in defending South-Fast Asia had been useful in crystallising opinion of the Johnson administration? 1. Has the Commission received a request from the Treasurer to correct or modify this report; if so, when? {: #subdebate-68-11-s1 .speaker-KIF} ##### Mr Hulme:
Postmaster-General · PETRIE, QUEENSLAND · LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. The A.B.C's early morning bulletin on May 1st did broadcast this statement. The information was received in a report of a press conference given by **Mr. Holt** in the United States, and was received through the Australian Associated PressRenter News Agency with supplementary information from United Press Agency,. 1. No. {:#subdebate-68-12} #### Papua and New Guinea: Leave for Teachers. (Question No. 1069.) {: #subdebate-68-12-s0 .speaker-KYS} ##### Mr Reynolds:
BARTON, NEW SOUTH WALES s asked the Minister for Territories, upon notice - {: type="1" start="1"} 0. What leave rights are enjoyed by teachers in the Territory of Papua and New Guinea? 1. What special arrangements are available to allow teachers to accumulate their leave? {: #subdebate-68-12-s1 .speaker-JOA} ##### Mr Barnes:
CP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. Entitlements for overseas officers include - {: type="a" start="a"} 0. One day's recreation leave in respect of each week of service in the Territory, 1. Long leave (as distinct from furlough) of three months after six years Territory service. 2. (a) Although in the case of other public ser vants leave normally accrues after the completion of 21 months' service from the date of taking up or returning to duty, teachers are required to take recreation leave each Christmas school vacation where the Public Service Commissioner is of the opinion that in the interests of the Service such a course is expedient and practicable. 2. Leave may be allowed to accumulate only in respect of service of up to 3J years before the date on which leave is to commence. {:#subdebate-68-13} #### Television: State Election. (Question No. 1082.) {: #subdebate-68-13-s0 .speaker-6U4} ##### Mr Whitlam: m asked the PostmasterGeneral, upon notice - >How much (a) free and (b) paid time was occupied by each political party on each commercial television station at the last elections for tho New South Wales Legislative Assembly? {: #subdebate-68-13-s1 .speaker-KIF} ##### Mr Hulme:
LP -- The answer to the honorable member's question is as follows - >The information set out in the statement hereunder relates to the election period which in this case was from Wednesday, 31st March, to midnight on Wednesday, 28th April 1965. The statement does not include station promoted programmes in which various candidates participated in some way. For example station CTC Canberra has a regular 5-minute programme " Keeping in Touch " in which **Mr. J.** Fraser, M.P., speaks. Three of these programmes were televised. A 22- minute discussion between Messrs. Renshaw and Askin was included in a programme in the "7 Days" series televised by station ATN Sydney, and station NBN Newcastle televised three halfhour programmes " Who's for the House " in which 28 of 31 candidates for electorates within the station's viewing area accepted the offer to speak for approximately two minutes each. Station TCN conducted a free ten-minute interview with **Mr. Askin** and according to the station a similar offer to the Australian Labour Party was not accepted. {:#subdebate-68-14} #### Television Programme. (Question No. 1085.) {: #subdebate-68-14-s0 .speaker-K9M} ##### Mr L R Johnson: son asked the PostmasterGeneral, upon notice - {: type="1" start="1"} 0. Was a film featuring the liberation of the Belsen Concentration Camp included in a "Four Corners" programme on Saturday, 24th April 1965, and excluded from the programme when telecast on Sunday, 25th April? 1. If so, was the film omitted from the Sunday screening because it was unsuitable for afternoon screening when children could be viewing, or was it omitted on other grounds? 2. If it was omitted on other grounds, what were they? 3. On whose initiative was the 'programme altered? 4. Did the Sunday screening of the programme include a film on venereal disease; if so, was this film considered in relation to its suitability for Sunday screening? {: #subdebate-68-14-s1 .speaker-KIF} ##### Mr Hulme:
LP -- The answers to the honorable members questions are as follows - {: type="1" start="1"} 0. Yes. 1. The segment was ommitted from the Sunday screening because the Commonwealth Film Censor had given it a censorship classification of 'A'. This meant it could not be screened before 7.30 p.m. It therefore had to be omitted from the Sunday repeat programme. 3 and 4. The suitability or otherwise of such a Programme for Anzac Day, which fell on the Sunday, was being considered by A.B.C. Programme Officers at the time the Censor's decision was received. 2. The segment on venereal disease (included in both editions of " Four Corners " on 24th and 23th April) was considered a significant item of importance to parents and teenagers alike. However, it was realised that parents might not wish their children to watch this particular item, and an announcement to this effect was accordingly made at the beginning of the programme. {:#subdebate-68-15} #### Studios for Melbourne Symphony Orchestra. (Question No. 1098.) {: #subdebate-68-15-s0 .speaker-KXZ} ##### Mr Peters: s asked the Postmaster-General, upon notice - {: type="1" start="1"} 0. What definite plans have been made by the Australian Broadcasting Commission to provide permanent and properly constructed rehearsal and broadcasting studios for the Melbourne Symphony Orchestra? 1. If plans are made, will the orchestra be located at close proximity to the place where all its public performances are to be given? 2. Will the studios possess such fundamental essentials as satisfactory air conditioning equipment and acoustic properties and also adequate accommodation for its library staff and other officers associated with the activities of the orchestra? {: #subdebate-68-15-s1 .speaker-KIF} ##### Mr Hulme:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. The A.B.C.'s plans for a permanent radio studio and office building in Melbourne include a studio intended primarily for use by the Melbourne Symphony Orchestra. 1. The studio cannot be located in close proximity to the place where all the orchestra's public performances are given in Melbourne. It will not, however, be built in an inconvenient location. 2. Yes. {:#subdebate-68-16} #### National Liberation Front. (Question No. Hil.) {: #subdebate-68-16-s0 .speaker-1V4} ##### Dr J F Cairns:
YARRA, VICTORIA · ALP rns asked the Prime Minister, upon notice - {: type="1" start="1"} 0. What are Australia's legal relations with (a) the National Liberation Front in South Vietnam, (b) North Vietnam and (c) China? 1. Has any "time of defence emergency" or "time of war" been declared with respect to Vietnam, or is the declaration of such a time being considered? 2. Does any country or part of a country exist which, at the present time, meets the requirements of the term " enemy " under section 24 of the Crimes Act 1914-1960 or a "proclaimed country" under section 24aa of the same Act? {: #subdebate-68-16-s1 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. The Australian Government has no relations with the so-called National Liberation Front in South Vietnam and has not entered into any form of official relationship with the authorities in North Vietnam. The Australian Government maintains diplomatic relation with the Government of the Republic of China. 2 and 3. On 29th April I informed Parliament that the Government would give further military assistance to the Government of the Republic of South Vietnam in response to the request of that Government. Following my announcement and the ensuing debate in Parliament, Australian forces were sent to South Vietnam, where they are engaged in the resistance of armed Communist aggression and externally directed subversion. In co-operation with the forces of South Vietnam and of other supporting countries, they are engaged in operations of war in defence of South Vietnam. No proclamations have been made either for the purposes of the Defence Act, or under sections 24 or 24aa of the Crimes Act, which deal respectively with the grave offences of treason and treachery. Parliament has imposed directly on the Executive Government the duty of determining whether the relevant provisions of the Defence Act, or the sections of the Crimes Act creating these offences, are to be brought into operation, except where the proclamation is to be under section 24 aa (1) of the Crimes Act, when it may only be made in pursuance of a resolution of each House of the Parliament. The Government is aware of the responsibilities with which it has been entrusted by Parliament in relation to these provisions. It may be added that other provisions of the Crimes Act relate to the offence of sedition. Parliament has made these provisions fully operative without the requirement of a proclamation. Visits to China by Commonwealth Employees. (Question No. 1114.) {: #subdebate-68-16-s2 .speaker-6U4} ##### Mr Whitlam: m asked the Prime Minister, upon notices - {: type="1" start="1"} 0. Which employees of the Commonwealth and of Commonwealth statutory authorities have made visits to mainland China since 1950? 1. When did they make the visits? {: #subdebate-68-16-s3 .speaker-N76} ##### Sir Robert Menzies:
LP -- The answer to the honorable member's questions is as follows - >Since 1950, employees of the Commonwealth and its statutory authorities have made official visits to the territory of Communist China as follows - > > **Mr. H.** C. Menzies, then Australian Government Trade Commissioner, Hong Kong - MarchApril 1956 > >Messrs. R. N. Harrison and K. V. Snelling, senior officers representing the foreign division of the Commonwealth Trading Bank - June 1958 > >Messrs. T. G. Sinclair and D. D. R. Hamilton, senior officers representing the foreign division of the Commonwealth Trading Bank - November 1959 > > **Dr. H.** C. Coombs, Governor, Reserve Bank of Australia; **Mr. D.** R. Parr and Miss M. G. Lewis, officers of the Reserve Bank of Australia- October 1961 > > **Mr. G.** R. B. Patterson, O.B.E. then Australian Government Senior Trade Commissioner, Hong Kong - > >May 1961 > >April-May 1962 > > **Mr. C.** J. Perrett, then General Manager, Australian Wheat Board - > >March 1961 > >April-May 1962 > >Messrs. A. E. Dash and H. I. Petchell, senior officers representing the foreign division of the Commonwealth Trading Bank - JulyAugust 1962 **Dr. A.** J. Farnworth, Technical Director, Australian Wool Board - February 1964 **Mr. J.** V. Moroney, Chairman, Australian Wheat Board; **Mr. L.** H. Dorman, General Manager, Australian Wheat Board - SeptemberOctober 1964 Messrs. A. E. Dash and K. G. Eastaugh, senior officers representing the foreign division of the Commonwealth Trading Bank-November 1964 {:#subdebate-68-17} #### Post Office, Sutherland. (Question No. 1094.) {: #subdebate-68-17-s0 .speaker-K9M} ##### Mr L R Johnson: son asked the PostmasterGeneral, upon notice - {: type="1" start="1"} 0. When will the temporary post office at Sutherland, New South Wales be replaced? 1. What are the principal features and estimated capital cost of the proposed new building? {: #subdebate-68-17-s1 .speaker-KIF} ##### Mr Hulme:
LP -- The answers to the honorable member's questions are as follows - {: type="1" start="1"} 0. During the *1965/66* financial year. 1. Two storey masonry building with frontages to both Princess Highway and Flora Street is envisaged. All postal facilities will be provided on ground floor and staff amenities on first floor. It is expected that the cost will be in the vicinity of £55,000.

Cite as: Australia, House of Representatives, Debates, 17 August 1965, viewed 22 October 2017, <http://historichansard.net/hofreps/1965/19650817_reps_25_hor47/>.