Senate
6 August 1952

20th Parliament · 1st Session



The President (Senator the Hon. Edward Mattner) took the chair at 3 p.m., and read prayers.

page 3

COMMONWEALTH EMPLOYEES’ FURLOUGH ACT

Petition

Senator HENDRICKSON presented a petition from certain citizens of the Commonwealth praying that action be taken by the Parliament to rectify an injustice which, they consider, exists under Section 8 of the Commonwealth Employees’ Furlough Act.

Petition received and read.

page 3

ASSENT TO BILLS

Assent to the following bills ported : -

Appropriation Bill (No. 2) 1951-52. Appropriation (Works and Services) (No. 2) 1051-52.

Atomic Energy (Control of Materials) Bill 1.052.

Coal Industry Bill 1952.

Conciliation and Arbitration Bill 1952. re-

Bill

Defence (Special Undertakings) Bill 1952. Immigration (Guardianship of Children I Bill 1952.

Income Tax and Social Services Contribution

Assessment Bill (.No. 2) 1952.

Land Tax Assessment Bill 1952. Land Tax Bill 1962.

New Guinea Timber Agreement Bill 1952. Public Service Arbitration Bill 1952. Snowy Mountains Hydro-electric Power Bill 1952.

States Grants (War Service Land Settle ment) Bill 1952.

Supply Bill (No. 1) 1952-53. Supply (Works and Services) Bill (No. ! 1

1952-53.

Supplementary Appropriation Bill 1950-51. Supplementary Appropriation (Works Mid

Services) Bill 1950-51.

War Pensions Appropriation Bill 1952. Wheat Industry Stabilization (Refund «f

Charge) Bill” 1952.

Wool ‘J ax Assessment Bill 1952. Wool Tax Bill (No. 1) 1952. Wool Tax Bill (No. 2) 1952.

page 3

DEATH OF SENATOR RICHARD HARRY NASH

The PRESIDENT:

– I desire to inform honorable senators that a letter has been received from Mrs. Nash thanking the Senate for the resolution of sympathy and condolence which was passed by this chamber on the occasion of the death of Senator R. H. Nash.

page 4

QUESTION

REPATRIATION

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Can the Minister for Repatriation inform me whether it is correct, as was recently reported, that it is proposed to curtail the full-time services of padres at repatriation hospitals throughout the Commonwealth? If the report is .correct, is such niggardly action necessary because. of the parlous financial position of the Govern.ment? In view of the excellent work done by padres in such hospitals, and the comfort which patients derive from the knowledge that padres are always at hand or on call, will the Minister take immediate action to cancel this miserable proposal ?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I have received a number of letters from South Australia concerning the position of padres at repatriation hospitals in that State, and I am having a report prepared on the subject. I shall be able , to let the honorable senator have a full reply to his question at an early date. Although .South Australia is the only State from which I have received complaints, I shall look at the over-all position, as well as that of South Australia.

page 4

QUESTION

KING ISLAND

Senator HENTY:
TASMANIA

– I address ,a question, to the Minister for Shipping and Transport, and refer to the visit which lie made to King Island some months ago. Has he received any information from the Tasmanian Government regarding that Government’s proposals to proceed with the building of the alternative wharf at Naracoopa, King Island? Has he any knowledge concerning the allocation of funds by the Tasmanian Government for this project?

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– I am not in a position to answer offhand the question asked by the honorable senator, but I shall make inquiries and let him have a reply.

page 4

QUESTION

IMMIGRATION

Senator O’BYRNE:
TASMANIA

– In view of the growing number of unemployed persons throughout the country and the inability of industry to give an assurance that many Australians at present in employ ment can be given security of employment, will the Minister for National Development press for the suspension of the intake of immigrants into Australia until such time as the economy of the country offers some prospect of their absorption into, national development projects and primary production ? I remind the Minister that such absorption was the basis of the original immigration policy.

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– I do not know whether the honorable senator is speaking in. a factual way about the growing number of unemployed in Australia, or whether it is a case of the wish being father to the thought. So far as the immigration programme is concerned, the Government has already announced that it proposes to restrict the intake of immigrants.

Senator O’BYRNE:

– Earlier to-da the Minister representing the Minister foi- Works asked that .a question bo placed on the notice-paper by Senator Arnold concerning the dismissal of Australians from an aerodrome project and the employment of new Australians on that project be placed on the noticepaper. The .question is also connected with the recent demonstration at the Bonegilla immigrant cam]), in Victoria. I now ask the Minister whether an allocation of £500,000 was made to the Department of Works for the absorption of these immigrants. If such an allocation was made, in what proportions was the amount distributed to the various States? Was any portion of the amount allotted to Tasmania for the purposes of its works programme?

Senator SPOONER:

– I have no knowledge of the allocation to which the honorable senator .has referred.

page 4

QUESTION

SHIPPING

Senator WRIGHT:
TASMANIA

– I draw the attention of the Minister for Shipping and Transport to press reports which appeared this week to the effect that because of the unavailability of shipping and disorganization of waterfront labour establishments which handle timber shipments from Tasmania, a number of sawmills in Tasmania either have closed down or have curtailed employment. From the positive interest which the Minister takes in Tasmanian affairs, I expect that he has seen such reports. Will he say whether the cause which has been attributed by the press to such curtailment of production and trade is in fact lack of shipping and waterfront labour disorganization? Will he investigate the matter so that, if that be a fact, appropriate remedies may be applied by his department?

Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · LP

– When I saw the press report to which the honorable senator has referred I asked my departmental officers to investigate the matter. To-day, I received information to the effect that the Tasmanian Traffic Committee, which looks after matters of this kind, had advised that the only request it had received for shipping space had been made a fortnight ago and that in response to the request Dulverton is nowloading at Launceston and Dubbo is now loading at Burnie. In view of the nature of the press statement I asked the committee to get in touch with the Timber Association of Tasmania in order to ascertain whether the statement was correct and to indicate the immediate future requirements of the industry. When a report on those matters has been received I shall be only too pleased to furnish the fullest information to Senator Wright and to other honorable senators who are interested in this problem.

Senator WORDSWORTH:
TASMANIA

– The Minister for Shipping and Transport is well aware of the importance of shipping to the people of Tasmania, and that rumours on any matter affecting the shipping service circulate among them very rapidly. Can the Minister say upon what date Taroona will resume its run on- the Tasmanian service?.

Senator McLEAY:

– When I read of the disastrous fire on Taroona I asked officers of my department to supply a report on the matter. I understand that the manager of the shipping company has stated that, notwithstanding the fire, Taroona, which was to resume running to-morrow, will be able to take up the run again within a week. The proposed sailing date has now been fixed at the 14th August. When it was proposed to dock the ship for repairs, every effort was made to get another ship with which to carry on the service but, unfortunately, the strike which occurred in the shipyards in Sydney rendered that impossible.

page 5

QUESTION

TAXATION

Senator COOKE:
WESTERN AUSTRALIA

– My question, which is addressed to the Minister for Trade and Customs, is based upon information furnished to me by the Wholesale Jewellers Association of Australia. Is the Minister aware that pre-budget statements that have been published in many newspapers forecasting or promising relief from some of the extortionate rates of sales tax have had very damaging effects on the manufacturing, wholesale and retail sections of industry resulting in unemployment? Does he realize that as the result of such statements business in the manufacturing, wholesale and retail jewellery trade and in other industries affected by sales tax has stagnated to such an extent that many firms and individuals have gone out of business? Is he aware that Crown Crystal Glass Proprietary Limited has closed one of its factories and has dismissed 40 skilled workers, and that Mr. Whiting, a highly skilled artisan, has been forced to close his works at Albion-street, Sydney, and to dispense with the services of highly skilled personnel? Will the Minister inform the Senate what Government authority gave information to the press relating to reduced sales tax in the budget yet to be brought before the Parliament? If the Government denies responsibility for the repeated press statements of possible budgetary relief, will the Minister take action to ascertain the. source of this leak of information relating to Government economic policy, which should remain highly confidential, and, if possible, deal with the person or persons who have been recreant to .their trust?

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– I am not. aware of the details mentioned by the honorable, senator, but I can assure him - and such assurances should be quite unnecessary - that there has been no leak whatever from the Cabinet or the Government relating to the contents of the budget. It is very unfortunate - and I should like the press particularly to take notice of this fact- that a great disservice is done to the country by wild speculation upon what the budget may or may not contain. No good can possibly come from such speculation. I agree with the honorable senator that speculation on the contents of the budget is grossly improper and renders a great disservice to the country.

Senator AYLETT:
TASMANIA

– I preface a question to the Minister representing the Treasurer by stating that representations have been made to me by primary producers in relation to the high rates of sales tax that are at ‘present imposed on spare parts for agricultural machinery and machinery used for clearing land. To assist to increase rural production, by lessening costs, will the Minister give urgent consideration to the lifting of sales tax on all spare parts for machinery used in connexion with agricultural production? Will he also consider lifting sales tax on machinery bought for the purpose of clearing and irrigating land in order to increase food production, if such provision has not been already made in the budget to be introduced during this sessional period?

Senator SPOONER:
NEW SOUTH WALES · LP

– I shall bring the matter raised by the honorable senator to the notice of the Treasurer.

page 6

EDUCATION

Senator HENDRICKSON:
VICTORIA

– Representations have been made to me and, I think, other members of the Parliament, in relation to the hardship that has been caused to parents by the steep increase of fees charged by private schools. Many of the parents of children who attend such schools are in receipt of fixed ‘ incomes, and consequently are experiencing considerable difficulty in meeting the increased fees. As taxpayers, they contribute also to the cost of maintaining State schools. Will the Minister representing the Treasurer urge that favorable consideration be given to making school fees an allowable deduction for income tax purposes.

Senator SPOONER:
LP

– I shall have the honorable senator’s request brought to the notice of the Treasurer.

page 6

QUESTION

GALVANIZED IRON AND PIPING

Senator SEWARD:
WESTERN AUSTRALIA

– Is the Minister for Shipping and Transport aware that galvanized piping and galvanized iron are still being transported from the eastern States to Western Australia by road ? What quantity of such commodities could the Commonwealth Railways transport weekly? What quantity was sent by rail each week during the last two months? In view of the heavy cost to consumers of galvanized iron and piping transported by road, can the Minister take any action to compel consignors to use railway f facilides when they are available?

Senator McLEAY:
LP

– For the benefit of Western Australian senators I point out that the Central Traffic Committee has been requested from time to time to pay particular attention to this very urgent problem. This week I have received reports to the effect that adequate shipping has been made available to meet the position in the immediate future. If the honorable senator will place his questions on the notice-paper I shall obtain the information for which lie asks.

page 6

QUESTION

GOLD

Senator VINCENT:
WESTERN AUSTRALIA

– I have been informed that the International Monetary Fund will hold a conference next month at Washington.. I understand that the South African Government has announced that it intends, at that conference, to submit the strongest possible case for an increase of the fixed price of gold. I believe that the Australian Government will be represented at the conference. Will the Minister representing the Treasurer inform me whether it is the intention of the -(Australian Government, through its representatives at the conference, to press for an increase of the fixed price of gold?

Senator SPOONER:
LP

– At the meetings of the International Monetary Fund and elsewhere the Australian Government has consistently supported the principle of a higher world price for gold. I am sure that our representatives will bc instructed to stress again that Australia considers that the world price of gold should be higher than it is at present.

page 7

QUESTION

RAIL TRANSPORT

Senator LAUGHT:
SOUTH AUSTRALIA

– Will the Minister for Shipping and Transport consider the practicability of running the 4-ft. 8 1/2in Commonwealth gauge railway onto the wharfs at Port Pirie, South Australia to enable Commonwealth rolling-stock to serve shipping direct and so obviate the need for cargoes to be transferred by lorry over the few hundred yards between the wharfs and the railway line?

Senator McLEAY:
LP

– I shall bring the matter to the notice of the Commonwealth Commissioner of Railways and obtain a report upon it as soon as possible.

page 7

QUESTION

KOREA

Senator MORROW:
TASMANIA

– Has the Minister representing the Prime Minister read a report in to-day’s press that the United Nations forces in Korea have marked out 7S North Korean cities and towns to be bombed, and that two of the towns have already been hit? If the Minister has not read the report, %vill he do so immediately and ascertain whether- it is correct? If it is found to be true, will the Minister request the Australian Government, which is a member of the United Nations, to lodge an emphatic protest against this inhuman, sadistic, and barbaric plan which must inevitably involve the killing of innocent men, women and children, and the wanton destruction of people’s homes and belongings, thereby rendering homeless many of those who do escape the bombing?

Senator O’SULLIVAN:
LP

– I have not seen the statement to which the honorable senator has referred, but I suggest that he should use some of his influence with the people who are responsible for the murdering of many innocent people throughout the world to-day. I am glad to know that the sympathy that the honorable senator so readily shows for the Communists of North Korea is not shared by other members of this chamber.

page 7

QUESTION

BROADCASTING

Senator PEARSON:
SOUTH AUSTRALIA

– In the report of the Australian Broadcasting Control Board recently presented to the Parliament, reference is made to the board’s programme for the provision of new regional stations throughout Australia, and for the increasing of the power of certain existing stations. In South Aus- ‘ tralia new stations are to be built at Penola, Mount Gambier, Renmark and Woomera, and the power of existing stations 5CL, 5AN and 5CK is to be increased. Can the Minister representing the Postmaster-General say how far this programme has been proceeded with, and when it is expected to be completed?

Senator COOPER:
CP

– I am unable to provide the honorable senator immediately with the information that he seeks, but I shall place his request before the PostmasterGeneral in order that a considered reply may be given.

page 7

QUESTION

EMPLOYMENT

Senator SANDFORD:
VICTORIA

– Can the Minister representing the Minister for Labour and National Service give to the Senate the latest figures in relation to registered unemployed throughout Australia, and also the figures at this time last year ? If the Minister cannot provide this information now will he obtain it for the Senate? Is it a fact that officials of the Commonwealth Employment Service have been forbidden to divulge information about unemployment?

Senator SPICER:
Attorney-General · VICTORIA · LP

– The total number of persons in receipt of unemployment benefits at the 26th July was 13,480. That figure represents about one-third of 1 per cent, of the total work force in Australia - a figure which I suggest is smaller than the corresponding figure in any other country in the world. I do not suggest that all the people who are unemployed at the moment have applied for unemployment benefits, but the figure that I have quoted is an indication of the existing state of affairs.

Senator Sandford:

– That figure is not one-tenth of the total persons who are unemployed.

Senator SPICER:

– If honorable senators opposite say that it does not represent the real number of unemployed who have sought relief, I suggest that they are engaged in the most deliberate exaggeration. I regret to say that it is becoming manifest that members of the Labour party seem to derive some . pleasure from exaggerating the present degree of unemployment. The Government is concerned about this matter. Honorable senators opposite should not imagine that the Labour party has a monopoly of concern about the problems that may arise from unemployment. It is the wildest exaggeration even to hint that there are 100,000 unemployed in this country. There are no figures available at the moment to support any such contention. All the evidence at present available indicates that the number of unemployed does not exceed 40,000.

Senator Ashley:

– That is a lot different from 13,4S0.

Senator SPICER:

– As I have said, the figure that I quoted previously represented the number of people who have applied for unemployment relief. I did not pretend that this figure represented the precise number of people who might be out of employment at the moment.

Honorable senators interjecting,

The PRESIDENT:

– Order ! A question has been asked, the purpose of which is to elicit information and the Minister has the right to reply in silence. I ask honorable senators ‘ to observe that right.

Senator SPICER:

– I went on to say that such evidence as I have seen - and perhaps I have not seen all the evidence available - would indicate that the figure may be about 4’0,000.

Senator O’BYRNE:

– That is a big figure.

Senator SPICER:

– I suggest that it is a small figure when compared with the number of unemployed in other countries of the world. The evidence indicates that the personnel represented by that figure is constantly changing. In other words, it is entirely false for honorable senators opposite to suggest that there are that number of permanent unemployed in this- country.

Senator Ashley:

– I rise to order! The Attorney-General has said that a statement by Opposition senators in relation to the number Of unemployed is entirely false. That remark is offensive to me and I ask that it be withdrawn.

The PRESIDENT:

– I have listened most attentively, and I cannot uphold the point of order.

Senator SPICER:

-r-What I said, and what I now repeat, is that, on the basis of the figures which I have cited, it would be utterly false to assume that the persons covered by those figures have been out of employment for any long period of time. The fact is that those who at any particular time are registered as being out of employment have been unemployed for only a short time. In other words, the unemployed personnel is constantly changing. While some are being placed in employment, others, perhaps, are losing their jobs. That is the best information that I can supply at the moment. If the honorable senator wishes to get more detailed information I shall be glad to supply it.

Senator SANDFORD:

– I should like to have the figures for the corresponding period of last year.

The PRESIDENT:

– Order !

Senator SANDFORD:

– The Minister has not yet answered the last part of my question. I asked whether it was a fact that officers of the Commonwealth Employment Service had been forbidden to supply information about the number of persons out of employment. The Minister has not answered that question.

The PRESIDENT:

– A Minister may answer any question as he thinks fit, and it is not the province of the President to direct him how he shall answer. The Minister has stated that further information will be supplied if it is required. That is the answer to the honorable senator’s question.

Senator ASHLEY:

– The AttorneyGeneral has said that he will give further information about the unemployment situation. I want some information, and I suggest that the formula now being applied for the computation of the number of unemployed should be extended. I am prompted to make this suggestion because of a report that was published in the press about ten days ago, evidently inspired by the Government, in which it was stated that among “ other towns “ in New South Wales there were 270 unemployed persons in

Orange. My information is that 1,300 persons have been put off by Emmco during the last three months-

Senator SPICER:

– I rise to a point of order. The honorable senator is making a statement rather than asking a question.

Senator ASHLEY:

– I am coming to that.

The PRESIDENT:

– Order ! I allow honorable senators a certain amount of latitude in the framing of their questions, and I have given Senator Ashley all the latitude to which he is entitled. He must now ask his question.

Senator ASHLEY:

– I appreciate your tolerance, Mr. President, but the AttorneyGeneral insulted me-

The PRESIDENT:

– Order !

Senator ASHLEY:

– I ask the Attorney-General whether he will have the formula extended so that it may be possible to ascertain with accuracy the number of persons out of employment.

Senator SPICER:

– I assure the honorable senator that the Government is concerned that the most accurate information in relation to this matter should be available to honorable senators.

Senator Ashley:

– It has not been made available to date.

Senator SPICER:

– If the honorable senator is patient, that information will be provided in a very short space of time.

Senator SHEEHAN:
VICTORIA

– In view of the fact that questions have been asked which indicate that unemployment is increasing in Australia in industries other than those which have been affected by immigration, can the Minister for National Development inform me of the steps which his department proposes to take in order to prevent the further growth of unemployment V

Senator SPOONER:
LP

– The honorable senator has addressed to me a question which relates to the general economic position of the country. My department is one of many Government departments which are being conducted in accordance with the general policy of the Government. To attempt to state that policy in detail would, be, I consider, more than is expected during question time. ! direct the attention of the honorable senator to the fact that substantial sums of money have been made available to the States under the loan programme.

Senator Sheehan:

– Not sufficient in Victoria !

Senator SPOONER:

– I also refer to the amounts that have been made available to the States as their share of tax collections, in excess of the amounts to which they were entitled. The Australian Labour party in trying to make of this subject a political issue with which to attempt to defeat the Government is doing a great disservice to Australia. The question is in terms which are too general. A specific reply cannot be given to it, particularly as it has been addressed to a member of the Cabinet on budget day.

Senator BROWN:
QUEENSLAND

I am more than pleased that the Attorney-General intends to make a definite endeavour to get at the truth about unemployment. For many years I was the organizer of a trade union, and I am aware of the lax methods adopted by government officials in arriving at unemployment figures. Is it not a fact that thousands of female workers are being dismissed by Australian firms and that most of such workers do not register as unemployed? If that is so, it is obvious that a true picture of unemployment is not being painted at the present time. Can the Minister inform me of the means at the disposal of the Government with which to gain a true knowledge of the number of unemployed persons ? I should like the Attorney-General thoroughly to investigate this matter. I make no accusation such as the members of the Government make against the Australian Labour party. All honorable senators should be seriously concerned with this subject. I have been unemployed and I know what unemployment means. Because of the admitted failure of the Government during the last year or two to preserve full employment, will consideration be given to bringing together in conference the leaders of the trade union movement and the captains of industry, in order that a real solution of the unemployment problem .might be found ?

Senator SPICER:

– All that I wish to say in answer to the last question asked by the honorable senator is that there is no admission on the part of the Government of any failure to maintain full employment in this country. Full employment has been the policy of the Government and remains its policy to-day. As far as sources of information regarding unemployment are concerned, I remind the honorable senator that there are several sources to which we may turn. First, we may turn to the registrations of people for unemployment relief, although I agree that that is not a perfect ‘ test. Next, the Government has access to figures which are supplied by trade unions, indicating the number of trade unionists who, from time to time, state that they are unemployed. The Government also is able to obtain information from the Commonwealth Employment Service, which can supply figures which show the number of vacancies that exist. I remind the honorable senator that many vacancies for employment are still registered with the Commonwealth Employment Service. The last figures which I saw were approximately 31,000.

Senator Sandford:

– Those figures are fictitious !

Senator SPICER:

– -They are not nearly as fictitious as are most of the statements made by the honorable senator. In addition, the persons who register for employment with the Commonwealth Employment Service indicate the period of time for which they have been unemployed. There are, therefore, various sources from which it is possible to obtain information which, although perhaps not completely accurate, is as good as it is possible to obtain. These sources of information are at present being carefully examined. As I have said, honorable senators will be (riven full information on this matter inthe course of a day or two.

Senator O’FLAHERTY:
SOUTH AUSTRALIA

– In reply to a question .by Senator Sandford, the Attorney-General said that he used the number of applicants f”r the unemployment benefit as an indicator of unemployment. He mentioned that there are now about 13,000 applicants for the benefit. Later, he said that possibly 40,000 per sons were unemployed but that that number was not a permanent figure because some of those who registered for work obtained it and new ‘ applicants were being registered. How does the AttorneyGeneral reconcile the two statements ? The fact that some unemployed are obtaining work and others are becoming, unemployed must surely indicate that ari army of approximately 40,000 persons is permanently unemployed? > Senator SPICER.- I cannot follow the honorable senator’s reasoning. Apparently, we speak different languages. If 40,000 unemployed persons who have been registered for a week obtain jobs and at the end of that week a new group of 40,000 persons is registered, it cannot bc- said that 40,000 persons can be described as being in a condition of permanent unemployment. The most that oan be said is that, from week to week, 40,000 persons are out of employment for the week. That was not what Senator Sandford sought to convey when he suggested that 40,000 persons are per.manently unemployed. On the contrary, he sought to convey the impression that 40,000 persons are completely down and out and have no possibility of finding jobs, whereas according to the latest information in my possession, despite the existence of a small degree of unemployment - and it is very small - approximately 31,000 vacancies are registered with the Commonwealth Employment Service. That may mean that there is still in this country, as I believe there is, a considerable unsatisfied demand for certain classes of labour:

Senator Ashley:

– Those vacancies can be filled only by skilled labour.

Senator SPICER:

– It is possible that the demand for unskilled labour is not quite as great as it was a few months ago. If I were unkind enough to do so, I could remind honorable senators opposite that some years ago, when the Labour party was in office, we passed through a period, not unlike the period through which we have just passed, when 25 per cent, of the working population of Australia was unemployed.

Senator AMOUR:
NEW SOUTH WALES

– Is the Minister representing the Minister for Labour and National Service aware that because of the permissible income provisions of the social services legislation many workers *;ru not qualified to apply for the unemployment benefit? Is he further ti ware that when workers attend the offices of the Commonwealth Employment Service to be registered as unemployed they ure told that if they are unskilled it is useless for them to register and in consequence many of them are not so registered? As the Minister intends to furnish to the Senate figures relating to unemployment, will he instruct the officers of the Commonwealth Employment Service that unemployed persons of all categories must be registered, whether they be skilled or unskilled, in order that we may obtain a true conspectus of the unemployment position?

Senator SPICER:
VICTORIA · LP

– In answer to the first part of the honorable senator’s question, I am aware that a means test is applied to the unemployment benefit. In answer to the second part of the honor:i bie senator’s question, I suspect that his statements are not correct and that particulars of all unemployed persons who report to the Commonwealth employment offices are taken notwithstanding the fact that there may be difficulty in placing them in employment. If the honorable senator wishes me to check up on that matter, I shall only be too glad to do so.

Senator SANDFORD:

– The AttorneyGeneral has stated that there are 31,000 vacancies throughout Australia. Is he aware that many employers who have only one vacancy make a request to the Commonwealth Employment Service for three men? I have definite evidence of this practice, which has obviously been adopted because the employers want the right of selection.

Senator SPICER:

– I am not aware of any such practice.

Senator WRIGHT:

– I wish to ask the Minister for National Development a question concerning the matter which, for political expediency, is occupying the attention of honorable senators opposite, although they are not promot- ing the welfare of the people who are seeking employment. Does the Minister remember that several years ago the Australian Labour party had a programme of public works which was to be a panacea for any recession with which Australia might be confronted?- Will the Minister inform rae how many millions of pounds have been made available by the Commonwealth to the States, out of revenue in the past few years to enable the States, in some of which Labour governments are in office, to maintain their programmes of public works? To what extent did this Government, last year, increase the amounts of reimbursements to the States out of revenue to enable the States to maintain their current expenditures? Will the Minister inform the Senate whether there is any precedent on the part of a Labour administration for such an action.

Senator SPOONER:

– I think the Senate will concede - that Senator Wright’s question is appropriate and to the. point. Before I became a member of the Parliament I read a press report to the effect that a great public works programme that had been prepared by the Australian Labour government then in office, would be a buffer against unemployment. The estimated expenditure involved was astronomical. I think that it was almost £1,000,000,000. Like so many of Labour’s plans, that plan was all right except that the unemployment did not occur. That is the position again to-day. There is not at present unemployment, and please God there will not be unemployment. One of the best ways to promote unemployment is for the Labour party to try to create nervousness and anxiety. In the last budget we provided £225,000,000 from various sources for works programmes of the States, which the States would not have been able to provide for themselves. This year we have undertaken to provide £180,000,000, and the distribution to the States from the proceeds of uniform taxation will be almost £16,000,000 greater than it was last year.

Senator BENN:
QUEENSLAND

– Will the Minister representing the Minister for Labour and National Service inform me how many unemployed persons were registered in Queensland on the 31st July, 1952? Will he improve the organization of his department by providing facilities in all country post offices for unemployed persons to* register for work and to apply for unemployment benefits?

Senator SPICER:

– I have not before me the figures at the 31st July. However, on the 26th July, there were 1,553 males and 641 females, a total of 2,194 persons registered for unemployment benefits in Queensland. Those figure’s showed an increase of 153 males and 21 females on the figures for the previous week, but revealed a reduction compared with the figures for an earlier period. I shall convey the honorable senator’s request to the Minister for Labour and National Service.

Senator CRITCHLEY:

– Is the Minister for Trade and Customs aware that many employees have been retrenched from the mills of Australian Cotton Textile Industries Limited, at Woodville in South Australia, and that those mills are now only working short time?’ Does he also know that South Australian Worsted Mills Proprietary Limited, at Mount Gambier, in South Australia has ceased production entirely? If so, will the Minister indicate whether there is any possibility of the Government providing contracts to assist the textile industry to carry on, and so prevent its employees from swelling the rapidly increasing number of unemployed?

Senator O’SULLIVAN:
LP

– I have heard that there has been actual retrenchment, or fear of retrenchment by the Actil cotton mills, and’ I have discussed with my colleague, the Minister for Supply, the possibility of contracts for the supply of textiles being spread throughout the whole of the textile industry in order to maintain it on a sound basis.

Senator ASHLEY:

– In his proposed survey of the unemployment position, will the Attorney-General examine the part-time employment position in Australia? A fortnight ago about 2,500 employees in the textile industry in New South Wales were working only three days a week.

Senator SPICER:

– I do not want the honorable senator to proceed under any misconception that I am going to conduct a survey. The Minister for Labour and National Service is responsible for this matter. I shall draw his attention to the honorable senator’s remarks.

Senator BENN:

asked the Minister representing the Minister for Labour and National Service, upon notice -

  1. Is it a fact that more than 2,000 worker* in Brisbane’s boot and shoe manufacturing factories have had their employment terminated because of a leather shortage and that further dismissals are expected T
  2. If so, will the Minister have the cause of the dismissals investigated for the purpose of ensuring that the employees will be reengaged in the boot and shoe industry as early as possible?
Senator SPICER:

– Inquiries by the Department of Labour and National Service reveal that some 1,100 employees of :en boot and shoe manufacturers in Brisbane were given notice of dismissal. Notices of dismissal by manufacturers were made following the temporary withholding of leather supplies by leather merchants, while awaiting a decision by the Queensland Prices Commissioner on an application for an increase in the price of leather. Following the granting of an increase of ls. per’ lb., supplies of 1 father to manufacturers were resumed.

page 12

QUESTION

LIBRARY AT ALICE SPRINGS

Senator ROBERTSON:
WESTERN AUSTRALIA

– Will the Minister representing the Minister for Territories say what steps, if any, are being taken to provide a reference and fiction library at Alice Springs? A reference library will be necessary when the very fine secondary school, now under construction in that centre, is opened.

Senator SPICER:
LP

– I shall make inquiries of the Minister, and supply the honorable senator with any information that I obtain.

page 12

QUESTION

DOLLAR LOAN

Senator RYAN:
SOUTH AUSTRALIA

– Will the Minister for Trade and Customs explain in detail particulars and conditions of a recent dollar loan, with particular relation to the following points : - 1. The reason and need for seeking and negotiating a dollar loan from the United States of America ? 2. Why, if such a loan was essential, the sterling countries were not consulted for accommodation? 3. Why the facilities of our own Commonwealth Bank were not utilized ? . 4. Is the financial technique of the International Bank different from the banking practice, system and technique employed by the Commonwealth

Bank, which successfully financed Australia’s war effort and its post-war economic development? 5, Will the loan be made available in the form of capital equipment or in the form of fluid credits? 6. If it is to be available in. the form of a combination of those factors, what will be the proportion of each? 7. How will the dollar loan enable the Government to honour its election promise to the Australian community to maintain full employment?

Senator O’SULLIVAN:
LP

– I think you will agree. Mr. President, that from the nature of the questions an answer would be entirely wasted on the honorable senator. However, I assure him that .we are not just getting pieces of paper; we will get capital equipment. If the honorable senator is interested in further details I commend to his attention the statements that have already been made on this subject.

page 13

QUESTION

MILK

Senator TANGNEY:
WESTERN AUSTRALIA

– Oan the Minister representing the Minister for Health say what proportion of scholars under twelve years of age are at present receiving free milk as a part of the national health scheme? What is the proportion of schools at which free milk is being distributed? What is the total cost of the scheme? What is the cost per child per annum ? What provisions is made for children in remote areas where fresh and powdered milk are practically unobtainable? Is any alternative proposal being considered to give a health service of the same value to children who do not receive free milk? Does the Minister consider that, in view of the cost involved and the proportion of children benefiting under this scheme, proper value is being received by the community? Does lie not think that an alternative health service, for example, dental treatment, wight be substitinted?

Senator COOPER:
CP

– 1 shall bring the honorable senator’s question to the notice of the Minister for Health.

page 13

QUESTION

DUTCH NEW GUINEA

Senator WILLESEE:
WESTERN AUSTRALIA

– Has the Minister representing the Minister for External Affairs seen a report which stated that, by arrangement between ibo Dutch and Indonesian authorities, a sub- stantial number’ of Indonesians are to be settled in Dutch New Guinea? If he lias not seen the report, will he make inquiries and, as a matter of urgency make a statement to the Senate concerning the position ?

Senator SPICER:
LP

– I shall inquire from my colleague, the Minister for External Affairs, whether a statement in i elation to this matter can be made.

page 13

QUESTION

DETERGENTS

Senator COOPER:
CP

– On the 29th May, Senator Byrne asked the following question : -

I desire to ask the Minister representing the Minister for Health a question concerning detergent. In the course of a. recent discission with it lauding medical pathologist 1 was concerned to hour that cleansing preparations, which are now in constant demand for washing and which are generally known a detergents, are what he calls carcinogenic, which means that they are likely to cause cancerous conditions on skin surfaces that are exposed to their action. I understand that this is an opinion that is widely held in Australian medical circled. As these detergent* are extremely efficient cleansing agents, they are . widely used, find if they have the effect that has been suggested by the medical pr”fession they are a constant and growing source of danger to the health of the community. In these circumstances, will the Minister ask the Minister for Health to make a statement on the matter ?

The Minister for Health has now furnished the following reply s-

The special “ soapless “ cleansing preparations - synthetic detergents - that are i0« being used a,re complex organic compounds. Like soaps, they net by lowering the surface tension of water and they assist its cleansing action. They also have certain advantages over soaps, e.g., they can be used satisfactorily in hard waters and since they are not alkaline and are free from irritating fatty acids they will not irritate the skin in the same way that swap does, although it U possible they may irritate the skin in some other way. According to reports, some of these detergents give good indications of being less irritating to some skins than i$ soap.

The question whether synthetic detergent? have a carcinogenic action on the skin” has been discussed with prominent dermatologists and other medical specialists in Sydney nml with representatives of two large soap manufactoring firms. A search has also been made of the relevant medical literature available at the School of Public Health and Tropical Medicine, Sydney. There )£ no information from .any of these sources to indicate that the use of synthetic detergents is associated with the risk of cancer of the skin, and no indication from the medical practitioners consulted that they believe such an association to be likely.

Most of the synthetic detergents used in Australia ave imported and include preparations named Teepol, Pref, Kwit, Santomerse aud Lissapol. Some of these compounds have been used for several years in industrial skin cleansers, particularly in the United States of America. They are especially suitable for workers who are sensitive to the usual soaps, or to alkalies or who are affected with dermatitis, and have been recommended by authorities such as Dr. Louis Schwartz, until recently Chief Dermatologist to the United States Public Health Service, and by the Committee on Occupational Dermatoses of the American Medical Association. It is hardly likely that their use in skin cleansers would be advocated if there were any suspicion of a carcinogenic effect. fu Medical Uses of Soap, edited by Morris Fishbein (1045), at that time editor of the Journal of the American Medical Association, it is stated, at page 1G2, that materials in thu group of sulphonated alkylated aromatic hydrocarbons have been used as household and industrial detergents - Aliwol, Saves. Swer- and that “ no published reports have come to our attention .showing the action nf these substances on the skin when they yet into contact with the skin in connexion with their use as household detergents “.

I.n view of the information thus elicited, the honorable senator might care to let me have the reference on which he based his question, in order that further inquiries might bp pursued.

page 14

QUESTION

COAL

Senator O’BYRNE:

– Recently, the Minister for National Development made a statement about the quantities of coal that are now at grass in New South Wales. Is he aware that in Tasmania also there are large stocks of coal at the pit tops? In view of this state of affairs, is Indian and South African coal still being imported? If so, have any steps been taken to discontinue such importations? What is the difference in price between Australian coal and Indian coal landed in this country? Is the importation of coal being subsidized?

Senator SPOONER:
LP

– While there is an adequate supply of Australian coal available, importations of coal will be confined to orders in respect of which commitments have already been undertaken and cargo space obtained, and to certain quantities of gas coal. The position to-day is that supplies of coking coal and general purposes coal are sufficient to meet our requirements, but that some gas coal still has to be imported. I have quoted the relative prices of Australia]* coal and imported coal from time to time. The cost of imported coal varies with fluctuations in freight charges. The price of the coal itself is fairly constant, but freight rates have varied considerably over the last twelve months. In 1950-51, the subsidy on imported coal totalled £1,700,000. The subsidy averaged £2 4s. a ton on coal delivered to South Australia, and £2 7s. a ton on coal delivered to Victoria. The quantity of coal imported in that year was 733,000 tons. In 1951-52, imports fell to 231,000 tons, on which the subsidy totalled £1,300,000. The average payment was £5 5s. 10d. a ton on coal for South Australia, and £6 2s. 8d. a ton on coal for Victoria.

Senator WRIGHT:

– The question that I wish to ask the Minister for National Development has been provoked by the implications of the question asked by Senator O’Byrne - implications which to honorable senators on this side of the” House are grounds for congratulation but which to honorable senators opposite apparently are grounds for complaint. I ask the Minister whether the stage has now been reached at which Australian industry has an adequate supply of coal. If so, will the Minister indicate to the Senate in what measure this satisfactory state of affairs has been contributed to by the Government’s programme to increase production in the New South Wales coal mines, both by open-cut and underground methods, and to what degree it is due to the Government’s policy of supplementing home production with importations of coal?

Senator SPOONER:

– When this Government came to office, coal was being produced in New South Wales at the rate of 10,700,000 tons a year. The present production rate in that State is 15,000,000 tons a year. When we came to office, open-cut coal production in New South Wales was at the rate of 1,300,000 tons a year; to-day, the production is 2.800,000 tons a year. In addition, New South Wales has been surveyed and prepared so that production can be expanded at short notice to whatever level is required by the nation. Most significant of all, however, is the fact that, whereas when this Government was elected the production loss due to industrial disputes was at the rate of 14 per cent, per annum of the productive capacity of the coal -mines now, and for many months past, despite Communist leadership of the miners’ federation, losses due to industrial disturbances are considerably less than half of what they were when Labour was in office.

page 15

QUESTION

CEMENT

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Can the Minister for Trade and Customs say whether it is true that a contract for 6,000 tons of cement, or a portion of that amount, has been let to Messrs. Scott and English ? Is this cement to come from Japan? What price and conditions of delivery apply to the purchase ? Is it a fact that cement produced in New South Wales is available for purchase and with an assurance of continuous supply, if so, will the Minister ensure that, in future, in the acceptance of Commonwealth tenders, preference will be given to Australian cement over that produced in other countries, particularly Japan?

Senator O’SULLIVAN:
LP

– Answering the last question first, there should be no need for any honorable senator to seek such an assurance because no Australian Government would give preference to the produce of Japan over that of thi? country. I am not aware of the contract to which the honorable senator has referred, but I do know that licences for the importation of cement from overseas have been granted only because the local supply has not been able to cope with the demand. On occasions, even customs by-law concessions have been granted in respect of imported cement, and the United Kingdom Government has consented to waive the British preference requirements because that country has been unable to supply our needs. The policy of this Government, and indeed of all Australian governments, is to require the use of Australian products wherever practicable. If local supplies are inadequate, preference is then given to the United Kingdom and other Commonwealth countries. Only if goods are. not available within the British Commonwealth are orders placed with other countries. The honorable senator will realize, of course, that the Commonwealth itself is not the buyer in such instances. The buying is done by merchants. However, it is necessary for them to obtain import licences.

page 15

QUESTION

HEALTH AND MEDICAL SERVICES

Senator WILLESEE:

– Can ihe Minister representing the Minister for Health say whether the Minister for Health has instructed all public hospitals in those States which have accepted the Government’s health scheme that accounts must be presented to patients each week of their stay in Hospital? Tr. this practice not detrimental to the recovery of the patients? Will, the Minister withdraw the order if he was responsible for it? If he was not responsible for it will he take steps to stop this unkind and unwise practice?

Senator COOPER:
CP

– I should say that the Minister for Health would have no authority over the administrative affairs of any State hospital, but I shall brins the honorable senator’s question to his notice and obtain a. reply from him.

page 15

QUESTION

CANBERRA

Senator COOPER:
CP

– On the 4th June, Senator Sandford asked the following question : -

I understand that, until about three months ago, it was possible for residents of Canberra to buy sides of mutton from the Canberra abattoirs cheaper than they could be purchased at retail butchers’ shops, but that this practice has now been discontinued. As the abattoirs are under the jurisdiction of the Minister for the Interior, T should like his representative in this chamber to ascertain whether the concession was withdrawn by ministerial direction.

The following reply has been furnished by the Minister for Health :-

The Canberra abattoir is administered by my department and the Minister for the Interior has accordingly referred the honorable senator’s question to me. Facilities are provided at the abattoir for the slaughtering and chilling of meat by slaughtering butchers, but not for .retail selling. Nevertheless, a practice developed whereby single sides of lamb and mutton and other meat .vere sold to members of the public by the slaughtering butchers’. The frequent opening of large chilling halls for individual sales, a practice contrary to the first principles of refrigeration, interrupted the normal work of the abattoir staff and ultimately interfered with the efficient working of the establishment. My department therefore required the discontinuance of the sales. The decision was a normal administrative function and no ministerial direction was necessary.

page 16

QUESTION

OIL FROM SHALE

Senator ASHLEY:

– As there is some doubt whether thecracking plantwhich is being dasmantled atGlen Davis will go to Bell Bay in Tasmania I ask the Minister for National Development whether the plant is to he transferred to one of the major oil companies. If not. what is its destination ?

Senator SPOONER:
LP

– Thecracking plant at Glen Davis has provedunsuitable for use at Bell Bay and will not, therefore, be transferred there. Noarrangementshave been made for its sale and the Government will have to realize on the plant as best it can.

page 16

QUESTION

TRADE WITH RUSSIA

Senator MORROW:

asked the Minister For Trade and Customs, upon notice -

What types of goods and materials and what quantities were imported from the Union of Soviet Socialist Republics during the last twelve months?

Senator O’SULLIVAN:
LP

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

page 16

QUESTION

PUBLIC ACCOUNTS COMMITTEE

Senator WEDGWOOD:
VICTORIA

asked the Minister representing the Prime Minister, upon notice -

In viewof the fact that on the 11th December, 1951, Royal assent was given to the Public Accounts Committee Act 1951, can the Minister give any indication when this committee will be appointed by the Parliament?

Senator O’SULLIVAN:
LP

– It is intended that the committee shall be appointed during the present sittings of Parliament.

page 16

QUESTION

AGRICULTURAL MACHINER Y

Senator PEARSON:

asked the Minister for Trade and Customs, upon notice - 1.How many Australian manufactured agricultural implements, used in cereal production, including headers, harvesters, seeding combines, ploughs and cultivators, have been exported in each of the last five years?

  1. In view of the desirability of stepping up cereal production in Australia and the effect of a shortage of such machinery on production, is it proposed to continue these exports? 3.If so, for what reasons?
  2. Which countries are the principal importers of Australian manufactured agricultural machinery?
Senator O’SULLIVAN:
LP

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

2 and 3. Applications for permission to export agricultural machinery and parts are carefully and critically examined in the light of Australian requirements.

  1. South Africa, New Zealand and the United Kingdom.

page 17

QUESTION

INDUSTRIAL UNREST

Senator SEWARD:

asked the Minister presenting the Minister for Labour and National Service, upon notice -

  1. Is it a fact that on the 5th February, members of the Australian Engineering Union and the Boilermakers’ Unionin Western Aus- tralia went on strike, and that on the 21st February approximately 200 members of those union who were employed in the railway run n ing sheds, stopped work and that these men are still on strike?
  2. Is it a fact that member of the two unions concerned, who are engaged in private industry, have also gone on strike, while efforts are also being made to induce members of the unions working at the power houses to strike?
  3. Is it a fact that the State Arbitration Court, on the 14th March, fined each of the twounions£500,andthatonthe2ndApril, the two unions were deregistered ? 4.Isitafactthatasaresultofthestrike railwayserviceshavehadtobeseiouslycur- tailedandthatithasbeennecessaryforthe railwaystostanddownover500ofitsem- ployees,withaprospectthatmorewillhave to be stood down? 5.Is it a fact that efforts made by the Disputes Committee of the Australian Labour party to obtain a settlement of the strike have failed,andthattheAustralianLabourparty has denounced the strike?
  4. Has the Minister been asked by the Western Australian Government to act, either alone or in conjunction with the State Government in taking measures to end this position? 7.If so, what action does the Government intend taking? 8.If no communication has been received from the Western Australian Government, will theMinisterinitiatemeasures,eitheraloneor in conjunction with the State Government, to terminate this strike?
Senator SPICER:
LP

– The Minister for

Labour and National Service has supplied the following answers to the honorable senator’s questions: -

  1. to 5. My inquiries show that the facts recited are substantially correct.
  2. No.
  3. See answer to ft.
  4. Not without a request from the Western Australian Government.

page 17

QUESTION

LIQUID FUEL

Senator PEARSON:

asked the Minister representing the Treasurer, upon notice -

What amount ofduty or tax, if any, is paid on diesel fuel or dieselene by users other than primary producers, or alternatively, what amount, if any, is rebated to oil companies on account of primary producers?

Senator SPOONER:
LP

– I have been informed by the Treasurer that diesel fuel and dieselene when imported solely as fuel, is admitted free of customs duty, but is subject to 10 per cent. ad valorem primage duty. No rebate is made to oil companies on account of primary producers.

page 17

QUESTION

GOVERNMENT LOANS AND FINANCE

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

asked the Minister representing the Treasurer, upon notice -

  1. . Is it a fact that in Ipswich, one of Queensland’s main cities and an important coalmining and railway maintenance and construction centre, the city council is concerned that works of major and national importance, such as the eastern suburbs sewerage scheme, the augmentation of the city water supply, and the Bundama-Goodna water supply scheme, might bo jeopardized through its inability to secure adequate debenture loans early in the new financial year?
  2. Is it a fact that during the period August, 1951, to January, 1952, the council was unable to secure any debenture loan, and that if this state of affairs continues during the next financial year, it will be difficult to carry out the works referred to?
  3. If so, and in view of the serious position that faces the Ipswich City Council and other local authorities throughout Australia due to the curtailment of loan moneys, will the Treasurer convene a further meeting of the Loan Council with a view to arriving at a formula that will allow necessary and reasonable development of the resources of the Commonwealth to proceed without undue interruption?
Senator SPOONER:
LP

– The Treasurer has supplied the following inf ormation : -

  1. Correspondence has been received by the Treasurer on this subject from various sources and has received consideration.
  2. It will bo understood that local authority affairs, including finance, fall strictly within the province of the State Government concerned and not of the Commonwealth Government. The Australian Loan Council on which the Commonwealth and State Governments are represented, has no authority over local government borrowings. This holds true, whether the local authorities concerned have been given legislative powers to borrow or not.
  3. The Commonwealth Bank, acting under its own authority, does, of course, make loans to local authorities. These transactions are matters to be arranged between the local authority concerned and the bank.

page 18

QUESTION

SULPHUR

Senator SEWARD:

asked the Minister representing the Minister for Defence Production, upon notice -

  1. What percentage of imported brimstone was allotted to each State during the years ended the 30th June, 1949,1950, 1951 and

1952?

  1. What percentage has been allotted or is it intended to allot to each State during the year ending the 30th June, 1953?
Senator COOPER:
CP

– The Minister for Defence Production has supplied the following information : -

  1. Brimstone was not under allocation in the years ended the 30th June, 1949, 1950 and 1951. A voluntary allocation scheme based on the consumption in the year 1950-51 was arranged in co-operation with the sulphuric acid manufacturers in the year ended the 30th June, 1952.
  2. The Commonwealth’s allocation plan came into operation on the 1st July, 1952. and itis subject to review before the 1st January, 1953. The allocations are not made on a State basis.

page 18

QUESTION

DRUGS

Senator ROBERTSON:

asked the Minister representing the Minister for Health, upon notice -

  1. Is it a fact that there is an increasing use of drugs in this country, especially among “ teenagers “?
  2. Is it a fact that the consumption of heroin in Australiahas greatly increased during recent months?
  3. If so, is such increase used in legitimate medicine?
  4. Will the Minister supply figures showing Australian import of this drug and its relation to other countries of the world?
  5. Is’ a specially trained staff used to detect drug imports at all ports of entry to this country ?
  6. If not, will he consider such appointment ?
Senator COOPER:
CP

– The Minister for Health has furnished the following reply to the honorable senator’s questions: -

A survey of the use of drugs in Australia is now being made. This will involve discussions and investigations with State and other authorities and complete information will not he available for several months.

page 18

TARIFF BOARD

Reports on Items.

Senator O’SULLIVAN:
LP

– I lay on the table the reports of the Tariff Board on the following subjects : -

Bifurcated rivets.

Jute carpet binding.

Measuring rules.

Copies of the reports are not yet available for circulation to honorable senators.

Ordered to be printed.

page 18

DEATH OP THE RIGHT HONORABLE SIR GEORGE FOSTER PEARCE, K.C.V.O

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

by leave - Honorable senators will have heard with deep regret of the death of the Right Honorable Sir George Poster Pearce, who was the last surviving member of the Senate of the First Commonwealth Parliament. The late Sir George Pearce was Acting Prime Minister of Australia in 1916, but perhaps is best remembered as a Minister for Defence, a portfolio he held, with interruptions, from November, 1908, to 1934, including the whole four years of the 1914-18 war. Senator Pearce represented Australia at the Imperial Conference in 1911, and in 1919 he again visited England in connexion with the repatriation of Australian soldiers. He was a signatory of the Peace Treaty with Austria in 1919, and represented the Commonwealth at the Disarmament Conference inWashington in 1921.

The late Sir George Pearce was elected to the Senate for “Western Australia in 1901, and represented that State continuously until the 30th June, 193S. He served his country in many capacities; he was a member of the select committee on steamship communication between the mainland and Tasmania in 1901 ; a member of the select committee on old-age pensions, 1904, and of the royal commission on the same subject, 1905-6; Chairman of Committees in the Senate, 3907-8; member of the select committee on the tobacco monopoly, 1.008 ; chairman of thu select committee on press cable service. 3909; Minister for Home and territories, 1921-26; Vice-President of the Executive Council, June, 1926 to October, 1929; senior member of the Australian delegation to the League of Nations, 1927; Leader of the Senate Opposition from November, 1929 to January, 1932, and Leader of the Government in the Senate from January, 1932, to November, 1937; and Minister for External Affairs and Minister in charge of Territories, 1934-37. Senator Pearce was made a member of the Privy Council in 1921, an Officer of the Legion of Honour of France, 1924, and a Knight Commander of the Royal Victorian Order, 1927. Not many here will have known the late Sir George Pearce, but I think that to-day we should recall the memory of one who was so long an outstanding figure in the Parliament of this Commonwealth. I move -

That the Senate expresses its deep regret at the death of the Right Honorable Sir George Koster Pearce, P.C., K.C.V.O., Officer of the Legion of Honour of France, a member of the First Commonwealth Parliament and a member nf this Senate for 38 years. Commonwealth Minister and Acting Prime Minister, places on record its appreciation of his long and meritorious public service, and tenders its sincere sympathy to the members of his family in their bereavement.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I second the motion, and on behalf of the Opposition, join with the Minister for Trade and Customs (Senator O’Sullivan) in expressing regret at the passing of Sir George Pearce, and in voicing appreciation of his valuable public service over a long period of years. I also join with the Minister in expressing to the relatives of Sir George Pearce the sympathy of the Senate in their bereavement. Besides holding the appointments and offices listed by the Minister for Trade and Customs, Sir George Pearce was also, I believe, a member of the Commonwealth Grants Commission, and as such played an important part in formulating the principles that govern the financial relations between the Commonwealth and the States. As a member of the commission he rendered a particular service to the States of South Australia, “Western Australia and Tasmania.

Question resolved in the affirmative, honorable senators standing in their places.

Sitting suspended from Jf.35 to 8.5 p.m.

page 19

QUESTION

ESTIMATES 1952-53

Senator SPOONER:
Minister, for National Development · New South “Wales · LP

– I lay on the table the following papers : -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other services involving Capital Expenditure, for the year ending 30th June, .1053;

National Income and Expenditure 1951-52. and move -

That the papers be printed.

The Treasure]- (Sir Arthur Fadden) is to-night delivering in another place the budget speech for the financial year 1952-53. The budget is being presented much earlier than is customary, and it is hoped that this will become the rule rather than the exception. At the present time it is more than usually important that the Parliament and the people should know without delay the financial course that the Government intends to follow during this financial year.

I propose to inform honorable senators of the principal features of the Treasurer’s budget speech and to give details of the revenue and expenditure proposals contained in it. In a review of the economic and financial situation it is stated that dramatic changes have occurred in basic economic conditions since the last budget was brought down. “Wool prices fell to half the level of the year before.- Imports of every kind flooded into the country, forcing the Government to place drastic restrictions on their entry. Our international reserve shrank by nearly £500,000,000. Rural production was set back because of drought, bushfire and flood. These developments, in combination, put a heavy strain upon the economy, but at the same time they helped to ease the extreme inflationary pressure from which we were suffering.

The signs that our basie position is sunder than it was a year ago are now multiplying. The output of black coal ind basic steel products has increased substantially. Labour shortages have disappeared in most industries, notably those of an essential kind. More goods ;ire being moved by rail. Congestion at the wharfs has lessened. Few consumer goods are short, and traders are competing more actively with one another. All this has been accomplished without detriment to a rapidly expanding defence programme. It is true that “ cost inflation “ continues, partly because’ of past increases in wages and costs, and that certain other characteristic results of inflation are still with us. The loan market, for example, is weak, since’ inflation has discouraged saving and investment in fixed interest-bearing securities. Business in many directions is eonfronted by slackness and uncertainty. This is not due to a deficiency of purchasing power, which still remains at a high level and could, if financial errors were made, easily set up new inflationary pressures. Eather is it due to a general hesitation and to a mood of indecision whether investment should be made now or deferred.

It is important that the difference in ihe situations confronting the Government a year ago , and now ‘ should he clearly understood. A year ago 139,000 vacant jobs had been registered with the Commonwealth Employment Service. Only a few hundred persons were drawing unemployment relief. To-day, registered vacancies have fallen to 32,000. While unemployment is still sporadic and, I believe, transitional, the number on relief ha.s risen to over 12.000. A year ago the special deposits held by the trading banks with the Commonwealth Bank amounted to £526,000,000. To-day, the total is only £195,000,000, the Central Bank having released no less than £331,000,000 during the year. A year ago, record wool prices had added £380,000,000 to our export incomes. Since then, we have had experience of a year of sharply reduced wool prices, with a reduction in the wool cheque of no less than £300.000,000.

A year ago, few people were disposed to worry over the morrow. To-day, there is widespread uneasiness about what may bc in store for us. The feelings of businessmen, in particular, have radically changed, and there is in some quarters a good deal of fear about the economic future. This is, I believe, baseless, but in itself it is a fact which the Government cannot ignore. Looking back over the past year, the Government is convinced that the counter-inflationary measures both in, and in conjuction with, last year’s budget were broadly correct and well justified.

After studying the situation exhaustively and weighing up all the factors to which I have referred, the Government has decided to base its budget for 1952-53 on the following broad considerations : - First, there is still inflation in the sense that prices and costs are still rising, partly as n result of earlier price and cost movements. There has been some loss of business confidence, and some trausition.nl and sectional unemployment has appeared. Going to the limit of its budgetary capacity, but without running into a deficit and so prejudicing economic stability, the Government therefore proposes to make certain adjustments and tax reductions to give incentive to investors, businessmen and the community in general. Secondly, the large and costly works programmes of the State governments will not he charged against the cu.rr.eni revenues of the Commonwealth. Thirdly, because of the change in economic conditions and the emergence of some -signs of unemployment, it is considered justifiable that loan raisings for essential works of a truly developmental and productive kind should receive some ‘ special assistance from bank credit..

To state the matter in another way, “the Government intends to reduce taxes as far as the Commonwealth budgetary position makes that possible, but it will not go into deficit for the purpose of reducing taxes. The shortfall in terms of cash will be outside the budget and will relate solely to the needs of State programmes which are under State control. En brief, so far as the Commonwealth is concerned, all Commonwealth expenditure, including capital works and services, will be met out of the revenue of :the year.. That means that in this budget the Government has endeavoured, :and, I believe, successfully, to reconcile prudence and responsibility with en- couragement to enterprise and a checking of certain recessive tendencies in business and employment which, if left to themselves, might cause much damage.

After allowing for the proposals which L shall outline shortly, total expenditure for 1952-53 is estimated at £959,430,000. The comparable figure for expenditure last year was £.903,900,000 so that there is an estimated increase of £55,530,000. The greater part of this increase in accounted foa1 by the increased estimates for defence services and payments to the States, which amount to approximately £30,400,000 and £16,900,000 respectively.

Preparation of the defence estimates could not be completed until the defence programme as a whole had been reviewed in the light of discussions held by the Prime Minister (Mr. Menzies) during his visit overseas. It has now been decided to provide a total amount of £200,000,000 for defence expenditure in 1952-53, compared with an actual expenditure of £169,500,000 last year. Allocation of that amount is now being considered by the defence authorities, and detailed estimates will be submitted at a later stage.

Total payments to the States are estimated at £177,800,000 this year, compared with £160,900,000 in 1951-52. The main reason for the increase of £16,900,000 in this item is to be found in the combined total of the tax reimbursement grant and the special financial assistance grant which it is proposed to pay to the States.

Estimates for capital works and services have been rigorously pruned to ensure that only the most essential works and services will be provided for, and the amount of £106,600,000 included in the estimates is £4,000,000 less than actual expenditure last year. Taking higher costs into account, this represents a substantial reduction of the volume of works activity.

The decision to reduce the intake of immigrants has enabled the estimates of the Department of Immigration for expenditure on miscellaneous services this year to be reduced by approximately £1,500,000 below expenditure in 1951-52.. Further savings may become possible at a later stage.

Subsidies are estimated to cost £28,400,000 thi3 year, which is £3,000,000 less than expenditure in 1951-52. Only small payments of woollen goods bounty, on which £2,300,000 was spent last year, will have to be made in 1952-53. Thi subsidy on wheat for stock feed is, however, expected to cost £2,600,000 more this year.

Estimated expenditure of the Postal Department shows an increase of nearly £9,700,000 over last year. This is mainly attributable to higher wages, saleries and general costs. Erpenditure on railways and the broadcasting services is estimated to increase in each case by £400,000, also because of higher costs.

Departmental expenditure is estimated for this year at £48,400,000, which i- £6,000,000 above the cost for 1951-52. The higher departmental estimate is chiefly a matter of increased wages and salaries and general costs.

With regard to repatriation benefits-, it is proposed to increase “ general rate “ war pensions and the war pensions payable to the wives and children of incapacitated ex-servicemen and the children of deceased ex-servicemen: The increases proposed are: 10s. a week in the full “general rate” war pensions; 5s. and 2s. 3d. a week in pensions for the wife and each child, respectively, of a “ special rate “ or full “ general rate pensioner; and 4s. 6d. and 3s. a week in the pensions for the first child and each later child, respectively, of a deceased “xserviceman, except where the child’s mother is also deceased, when the increase will be 8s. a week. General rate pensioners not receiving the full pension, and their dependants, will receive proportionate increases. Service pensions are also to be increased by amounts up co 7s. 6d. a week for an unmarried pensioner and up to 12s. 6d. a week for a married pensioner.

Other proposals include increases in i.he education allowances payable under the soldiers’ children education scheme to certain children of deceased and totally and permanently incapacitated or blinded ex-servicemen and the payment of an education allowance from age twelve instead of thirteen years; an increase of L’l 1 OS. a week in the living allowance payable under the Commonwealth recon.struction and related training schemes and the war service land settlement scheme, and in the maximum rates of i re-establishment allowances for exservicemen engaged in farming and other occupations. Increased pensions and allowances will be payable from the date nf the first war pension pay-day after the necessary amending legislation is passed. The total additional expenditure involved in these proposals is estimated at £3,200,000 in a full year and £2,400,000 in 1952-53.

It is proposed to increase by amounts not exceeding 7s. 6d. a week age and invalid pensions and the pensions payable to widows who have one or more children. The pensions payable to other classes of widows and the allowance payable to the wife of ah invalid pensioner will also be increased. The increases will become payable on the first pension payday after the necessary amending legislation is passed. It is also proposed to pay, free of means test, to qualified blind persons the first £3 of the invalid pension, and to repeal the provisions which disqualify a person aged between sixteen and 21 years for invalid pension if his parents are able adequately to maintain -him. Further, it is proposed to increase the allowances payable to persons suffering from tuberculosis by 10s. a week for a sufferer who is unmarried, and by 15s. a week for a man and wife. Unemployment and sickness benefit rates for a single person and for a man and wife will be doubled. It is estimated that these proposals will cost £11,100,000 in a full year, and £8,300,000 in 1952-53.

During the financial year the medical benefits scheme will come into operation. This scheme provides for the payment of subsidies in respect of medical treatment to members of organizations registered under the ‘scheme. This scheme is estimated to cost £750,000 this year and about £7,500,000 a year when fully established. The living allowances payable under the Commonwealth scholarship scheme are to be increased by amounts up to 7s. 6d. a week for students living at home and 10s. a week for students living away from home. The increase will take effect from the 1st. January, 1953. From that date also, it is proposed to ease the means test attached to these living allowances. Under the proposal, except where full living allowances are already payable, the living allowances otherwise payable will be further increased by amounts up to £30 a year, or approximately lis. 6d. a week. The additional cost is estimated at £55,000 in a full year and £27,000 in 1952-53.

It is proposed to amend the relevant legislation to provide that the amount to be appropriated to the National Welfare Fund in this year and subsequent years shall be equal to expenditure from the fund. Under the present arrangement the annual appropriation to the fund is related to variations in collections of pay-roll tax. Whilst this arrangement has so far resulted in payments to the fund being greater than expenditure from it - mainly because of the steep rise during recent years in wage and salary earnings in respect of which pay-roll tax is levied - it could obviously cause the fund to run down if the rise in earnings slowed down while expenditure from the fund continued to increase. The pronosed arrangement will have the advantage that annual expenditure on social services benefits will be fully covered by the annual appropriation and the amount of that expenditure will be accurately reflected each year in the budget. Meanwhile, the position of the fund will be fully protected. At the 30th June last, the balance in the fund stood at £185,000,000. At that figure it provides an ample reserve and safeguard for the continued payment of social services benefits, which was the purpose for which it was originally established. The total expenditure from the fund this year is estimated at £164,179,000, and that is the amount for which provision is made in the Estimates.

On the basis of taxation rates as they stand, it is estimated that total revenue iri 1952-53 would reach £1,009,4.60,000. If revenue remained at £1,009,460,000 and expenditure at £959,430,000, there would be a surplus of approximately. £50,000,000 for the year. In the view of the Government that amount represents the extent to which reductions of taxation can safely be given. I shall now explain the tax reductions which the Government proposes to make.

The special levy of 10 per cent of income tax and social services contribution imposed on individual taxpayers last year will not be re-imposed this year. The value to taxpayers of the discontinuance of the special levy will be about £36,500,000 in a full assessment year and £23,000,000 in this financial year. Because new deduction scales have to be prepared and distributed to employers, the lower instalment deductions from salary and #wage earners will not commence until the 1 st October, next.

A reduction of 2s. is proposed in the rate of tax on the first £5,000 of taxable income derived by public companies. The rate at which tax will be payable on incomes of public companies for the year ended the 30th June, 1952, including the levy of 2s. in the £1 imposed last year will accordingly be - 7s. in the £1 on the first £5,000 of taxable income, and 9s. in the £1 on the balance of taxable income.

The reduction of 2s. in the rate on the first £5,000 of taxable income will afford some relief to all public companies and will be of special assistance to those companies in the lower profit earning ranges. The cost to revenue of this reduction is estimated to be £1,500,000 in a full assessment year and £1,100,000 in the current financial year 1952-53.

The system of advance payments by companies instituted last year will be discontinued. This means that in the current financial year companies will not be required to make any advance payments based upon the income of the year ended the 30th June, 1952. The advance payments imposed in respect of the income of the year 1950-51 will bf credited against company tax assessable during the current financial year. The cost to revenue in the current financial year is estimated at £14,000,000.

The primary rales of tax imposed last, year on the 1950-51 taxable incomes of private. companies were 5s. in the £1 on the first £5,000 of taxable income and 7 s. in the £1 on the balance of taxable income. These rates are being retained this year for application to the 1951-52 taxable incomes of private companies, but these companies will benefit substantially in not being required to make an advance payment this year, and from increases in the amounts which may be retained free from undistributed income tax, as I shall now explain.

For many years the basis of taxation of the undistributed income of private companies has been the subject of controversy both as to the weight of the tax and the complications of the system. At present a private company may retain a portion of its distributable income without incurring undistributed income tax on the amount so retained. This amount, called the “ retention allowance “, ranges from 50 per cent, of the first £1,000 of distributable income down to 10 per cent, of the excess of the distributable income over £10,000. Commencing with the income year 1951-52, the Governmnent proposes to increase the minimum retention allowance to 25 per cent. Where the present retention allowance exceeds 25 per cent, the greater amount will still apply.

The new scale will be as follows: -

The new scale of retention allowances should enable all private companies to plough back the necessary reserves for the proper conduct of their businesses, and at the same time to effect sufficient distributions of profits to shareholders 10 avoid undistributed income tax.

Where, however, a private company chooses to retain profits in excess of the retention allowance, undistributed income tax will be payable. Past experience has imply demonstrated the need for simplifies tion of the method by which this undistributed income tax is assessed. The complexities and delays of the system mainly arise from taxation of undistributed income at the shareholders’ graduated rates. Troubles have arisen also because of the inability of companies to check the accuracy of the assessments made. In addition, serious complications have been encountered in ascertaining whether, for purposes of rebate, the profits so taxed were subsequently distributed. Acting upon a recommendation of the Commonwealth Committee on Taxation, the Government proposes that the undistributed income tax shall, in future, be levied at a flat rate instead of the shareholders’ graduated rates of lax. The flat rate now proposed is 10s. in the fi.

Having in mind the greatly increased retention allowances which will be allowable to private companies, and upon which only the primary rate will be payable so long as they remain undistributed, it is not proposed to provide any rebate of the flat rate tax chargeable on distributable profits over and. above the permitted retention allowances. The basic reasons for this proposal are that a company which so retains profits is assumed to be retaining those profits permanently in the capital structure of the company and that theY will not be distinguishable from other retained profits in any subsequent distribution. There will be no obligation on private companies to incur undistributed income tax even though they may find it necessary to utilize profits in excess of the retention allowances. As the Com.monwealth Committee on Taxation ha,s pointed out, these companies will be able in most, if not all, cases to arrange for shareholders, after paying their taxes, to re-invest the balance of the dividends with the companies. The plan proposed, it is thought, will provide a simple and stable system for the levying of tax on the undistributed income of private companies. Whilst providing full equity for private companies, it will prevent the delays now so prevalent in ascertaining, full liability on any year’s profit and will provide a welcome simplicity enablingcompanies to ascertain their liabilitiesat the earliest date.

Because of increasing costs of education, representations have been received! from- a wide cross-section of the community for some relief on account of” expenditure incurred by parents in educating families. It is proposed accordingly to allow parents a concessional’ deduction for education expenses incurred! up to a maximum of £50 for each, dependent child under 21 years receivingfulltime education. This concession will commence to apply on and from the- 1st July, 1952, at an annual cost to revenue, of approximately £1,500,000. There will, however, be.no cost to revenue in the current financial year 1952-53.

The Government has examined the effects of income tax on amounts paid and received for the acquisition and disposal of goodwill attached to leasehold business premises. These amounts have in the past been treated as income of the recipients because in many instances they amounted to nothing more than rent paid in advance. Correspondingly, paymentshave been allowed as deductions for the reason that the value of the payments isexhausted at the termination of the lease. In recent years, strong protests have been made against the practice on the ground that the tax is a levy on capital. There is little doubt that in a great number of cases there is substance in these protests. The matter has been considered by the Commonwealth Committee on Taxation which has recommended that amounts paid for goodwill so described should be, treated as taxable income on the one hand and allowable deductions on the otheronly if the vendor and purchaser so agree and notify the Commissioner of Taxation to that effect. In other words, it is intended to let the tax consequences follow the stated conclusions of the negotiating parties. It is intended that the altered law should commence to apply to transactions made after the 31st December, 1952. This will enable the parties to leasehold transactions and their advisers to familiarize themselves with the altered law prior to its operation.

The Government proposes to exempt from, income tax the income derived by football, cricket, tennis and other clubs which are concerned in the promotion of sport in which only human beings ^participate. Such organizations which are not carried on for the profit of individuals will, in this connexion, be on the same footing as musical, artistic, scientific and literary societies, the incomes of which are already exempt from tax. It is pro.posed also that other non-profit organizations; .such as lodges and social clubs, shall not be liable for income tax unless the income exceeds £104 in the year. These exemptions will commence to apply to 1951-52 incomes, at an annual cost to revenue of £20,000.

At present an employer is allowed a deduction of contributions made to funds for the individual personal benefit of employees and their dependants. In the first instance, however, the annual deduction is limited to £100, or 5 per cent, of the annual remuneration of the employee, whichever is the greater. In those cases where the contribution exceeds this limit, the Commissioner is authorized to allow a greater deduction if there are special circumstances warranting the increased allowance. Adopting a further recommendation by the Commonwealth Committee on Taxation, it is proposed to increase the limit from £100 to £200. This increase is in consonance with the increase made in recent years from £100 to £200 in the concessional deduction allowable to taxpayers for life assurance, contributions to superannuation funds and comparable payments. It is proposed also to exempt from tax the income derived by funds established for the purpose of providing retirement benefits for self-employed persons. This exemption will correspond with the. exemption already provided for employees’ pension funds. The new provisions will operate on and from the 1st July, 1952.

Last year the Government introduced allowances which exempted men over 65 years and women over 60 years of age if the income did not exceed £234. In the case of married couples this exemption applied if their combined incomes did not exceed £468. ‘These allowances coin.cided with the limits of the maximum permissible incomes for purposes of Com monwealth age pensions. As already announced, it is proposed to increase age pensions by 7s. 6d. a week. In consonance with this increase, exemptions are being increased by £20 to £254 in the case of single persons and by £39 to £507 in the case of married couples. The increase in this exemption will apply to incomes of the current year 1952-53.

Ever since the inception of Commonwealth income tax. the law has contained a provision which requires tax to be paid only on 5 per cent, of lump-sum retiring allowances paid to persons in consequence of their retirement from an office or employment. Until recently this provision has encouraged employers to reward their employees for faithful service and has prevented that reward from being unduly encroached upon by full taxation of the retiring allowance aggregated with other income of the year. Unfortunately, in recent years evidence has accumulated that this concession has been abused. Ii is proposed to remedy the technical defects of the present law to ensure that the concession shall apply only to those lumpsum receipts which are genuine retiring allowances and which are reasonable in amount having regard to the value of the services and the length of the employment. ‘The altered provisions will commence to apply in assessments based on income of the current year 1952-53.

The Government has also examined the position of transactions in trading stock, including live-stock. The broad principle on which those provisions .are based is that, on a disposal of trading stock, its value should be taxed in the hands of the person or persons disposing of the stock and, correspondingly, allowed as a deduction to the person or persons acquiring the stock. Recent decisions of courts and Wards of review have disclosed that the existing provisions do not give full and proper effect to that basic principle. As a result, the provisions operate inequitably in some cases of disposals <of trading stock outside the normal course of business. It is proposed to introduce amending legislation to remove these anomalies. One proposal is that, where trading stock is disposed of by way of .gift, the donee should be entitled to the same deduction as -a .purchaser, and the donor should be taxed in the same manner as a seller of that stock. This provision will commence to apply to gifts of trading stock made in the current year 1952-53.

The position in regard to partnership transactions involving- trading stock also will be clarified. One view previously held was that the transfer of interests in partnership assets, including trading stock, was a constructive sale. In accordance with this view, partners have been taxed on the market value of stock even though there has not been a realized profit out of which the tax could be paid. It is proposed that partners should be given an opportunity to elect, if all the parties unanimously agree, whether tax should be payable on the profit deemed to arise from a transfer of interests in trading stock, or whether the tax liability should be deferred until the stock is actually sold. The proposed legislation will- be made retrospective to the 1st July, 1950, so that partners who have been taxed on profits deemed to have arisen .from transfers since that date may elect, upon unanimous agreement, to have their assessments amended on the alternative basis now proposed.

It is proposed to make substantial reductions in the rates of sales tax payable on certain classes of goods. The maximum rate of tax will be reduced from <56& per cent, to 50 per cent.1 and goods now subject to the maximum rate will benefit accordingly. Toilet and cosmetic preparations and toilet requisites, which have hitherto borne tax at the rate of 50 per cent, will, in future, be taxed at the rate of 33-Jr per cent. The tax on sporting equipment and toys and radio receiving sets will be reduced from 33-^ per cent, to 20 per cent. Reductions are also proposed on numerous other classes of goods. The rate of 25 per cent, will be eliminated. The number of rates of tax in operation will be reduced from six to four, namely, 12^ per cent., 20 per cent., 33^ per cent, and 50 per cent. This should afford some relief to those engaged in commerce.

Certain further exemptions are also proposed. The most important of these is the allowance of full exemption from sales tax in respect of goods for use by universities and schools which are not conducted for profit. Hitherto such in- stitutions, other than government schools, have enjoyed only a limited exemption of scientific equipment and goods for use for the purpose of tuition. They will now be entitled to exemption of such goods as sporting equipment and general furnishings. The allowance of full exemption is in line with the Government’s general policy to assist education. The opportunity is also being taken to remove a number of anomalies arising out of the existing classifications of goods fo.r sales tax purposes. In terms of revenue, the concessions proposed involve an estimated loss of £6,000,000 in a full year, or approximately £5,200,000 in the financial year 1952-53. The new rates will come into force as from the commencement of business to-morrow, the 7th August.

Land tax was introduced in 1910 with the avowed purpose of breaking up large rural estates that were not being used to their full commercial advantage. The truth is that to-day by far the greatest proportion of the tax is levied on city land which is already fully developed and which could not be sub-divided even were the owners willing to do so. The Government accordingly proposes to vacate the land tax field on and from the 1st July. 1952. The cost to revenue in the financial year is estimated at £6,250,000. All ‘ told, the value to taxpayers of all the tax concessions just outlined is estimated to amount to a total of £49,570,000 in. the current financial year.

Bringing into account the revenue and expenditure proposals I have outlined, the budget for 1952-53 may be summarized as follows : -

Events of the past year have brought acutely to a head the entire problem of Commonwealth-State financial relationships. A fundamental change in prevailing arrangements is obviously necessary. Last year, the Commonwealth provided for the States no less than £314,000,000 and by far the greater part of that amount had to be provided from revenue. This year, the Commonwealth will again have to find for the States at least as much as last year and it should be pointed out that all but a minor part of this enormous sum will be spent on purposes for which the Commonwealth has no direct responsibility and over which it has no administrative control. Clearly the position is radically unsound. The Commonwealth has to raise enormous sums of money for expenditure outside its own constitutional field; the States meanwhile spend vast sums for the raising of which they, as governments, have no responsibility whatever. The Government, therefore, regards a recasting of these arrangements as imperative and us a first step it has informed the States that it is prepared to put them in the position again to raise revenues for their own purposes from income taxation. From time to time all the States have indicated that, they desire income-taxing powers to be returned to them and it now becomes a matter of working out a basis for arrangements under which the major source of revenues can be shared between the Commonwealth and State governments. It will, of course, be one of our objects to avoid documentary duplication and provide the Utmost simplicity for the taxpayer.

The Government will take an early opportunity during the present session to amend the legislation which regulates the relations between the Commonwealth Bank and the trading banks. It also proposes to review the legislation which determines the relationship between the central banking activities of the Commonwealth Bank and its trading section. Whilst there are many minor respects in which alterations to the Commonwealth Bank Act 1945-51 and the Banking Act 1945 are long overdue, the main objects of the proposed amendments will be to remedy certain dangers inherent in the current provisions relating to the special account system and to ensure that the trading activities of the Commonwealth Bank do not involve unfair competition with the trading banks.

The development of adverse conditions in the loan market, due principally to the inflationary forces operating in the economy, have made it impossible for governments to borrow at the comparatively low rates of interest which prevailed during the war and post-war years. All governments,, whether Commonwealth or State, are naturally reluctant to pay increased rates of interest, but the trend towards higher rates is world wide, and in their borrowing operations governments must recognize the realities of the market situation. The Commonwealth Bank recently reviewed rates of interest in the light of increases in the coupon rates and market yields on governmental and semi-governmental securities in Australia and also of the rise in rates of interest in London. In the result, as already announced, the order made by the Commonwealth Bank under the National Security (Economic Organization) Regulations fixing maximum rates of interest for bank advances and a number of other commercial lending operations has, with the approval of the Government, been revoked. In current circumstances the Commonwealth Bank does not wish to take further action to fix maximum rates. The trading banks have, however, agreed to observe 5 per cent, per annum as the maximum overdraft rate and not to pay on fixed deposits of various terms more than the rates announced by the Commonwealth Bank. The previous maximum bank overdraft rate was 4$ per cent, per annum.

In harmony with this rise in overdraft and fixed deposit rates, it has been decided to increase the rate at which the Commonwealth Bank discounts treasurybills for the Government from f per cent. to 1 per cent, per annum. Similarly, the interest which the Commonwealth Bank pays to the trading banks in respect of the moneys which they hold in special account at the Commonwealth Bank has been raised from 10s. ner cent, to 15s. per cent, per annum. The Commonwealth Savings Bank has also made an all round increase of 5s. per cent, in the rates of interest on deposits. As from the 1st August, the Commonwealth Savings Bank will pay 2£ per cent, per annum on amounts up to £500 and 1£ per cent, pur annum on amounts from £501 to D,000.

During 1951-52 Australia’s international currency reserves fell from £843,000,000 to £362,000,000. Even with the import restrictions announced on the S-th March, the total value of imports into Australia during 1951-52 was £1,050,000,000 f.ob., or, adding freight and insurance, £1,197,000,000, thus giving art adverse balance of trade for the year of £530,000,000, and, when all other external transactions for the year were brought into account, a balance of payments deficit of £4S1,000,000. The present reserves of £362,000,000 are none too- large for our requirements and for the present this means that at the very most we cannot afford to spend on imports more than we obtain from exports and the proceeds of overseas borrowing or private investment in Australia.

The import restrictions announced on the Sth March are now ‘ beginning to become fully effective and the immediate problem has been successfully brought under control, although to make our position really safe we must spare no effort to build up our reserves as and when we can. A further objective must be to reduce our deficit with the countries of the dollar area. In this direction we are making our- contribution towards- maintaining the gold and dollar reserves of the sterling area, both by the stringent measures we have adopted to cut down dollar expenditures and by renewed efforts to- increase our dollar earnings from exports-. In addition ‘we have; as already announced, arranged to make a. temporary drawing of 30j000,000 dollars from, the International Monetary Fund and have concluded a new 50;000,000 dollars loan agreement with the International Bank for Reconstruction and Development, which will help to finance the import of dollar capital goods for the- development- of our primary and secondary industries. The. whole dollarsterling situation will, of course, be considered at the Commonwealth economic conference which is: planned; te take place in London, next November. .

Democracy and free enterprise in the modern world tread a precarious path between the twin evils of inflation and unemployment. In Australia we have had experience of both within the past twenty years. We are, perhaps, the mo-re prone to swing one way or the other because we are a young country with a strong urge to progress, and also because we are. so much exposed, through the nature of our trade, to the impact of world conditions. To find and keep amidway path throws a heavy responsibility upon governments. There can b« no more difficult problem than te hah,, as we have tried to halt, a long-continued and violent inflation and yet in so doing to avoid an unwanted down-turn in economic activity. It is characteristic of inflation that the longer it goes om and’ the stronger it grows, the more its features: become the accustomed and accepted conditions of economic Kie. Plans and. commitments are built upon the belief that, prices will continue to rise and scarcities to persist. When these conditions are brought or come to an end, as- they must some time, expectations are falsified, plans go wrong and losses, are incurred. [Extension Of time granted.. Left to run its course^, inflation wit inevitably bring its- own-, drastic solution in bankruptcies and mass- unemployment It is- the tassie of. economic policy so- to adjust conditions that neither inflation itself nor the- reaction from it will run toextremes’.

But responsibility for .at stable coursein economic affairs’ does not rest wholly, or even- mainly; with governments. After all, the springs of action in an economy such as ours lie principally with businessfirms and individuals1, and so if isprincipally business firms and individuals who will determine whether there is te beinflation, recession or- stability. The Government can influence- the broad context within which private- enterprise works, burt in, Australia; at least it cannot and1 should not try to do more than that:

Last year, with, inflation at- a dangerouspitch, the Government acted with determination to restore: balance between demand and’ supply. Later, as the situation changed, we adapted and modified’ our measures to– new circumstances. Weare further modifying, them in- this- budget according to our judgment of what the situationrequires.But,becauseofthe dangers that remain, we are certainlynot goingtothrowthementirelyoverboard. Anytalkofdepressionsisdangerous nonsense.Withexportpriceshigh,with theseasonsgood,withgreatdefencepro- grammesandworksprogrammesgoing on,withourpopulationincreasing rapidly,withtheworstindustrialbottle- necksbrokenwithtaxationlowerthan inanycomparablecountry,thematerial conditions have never been more favorable for enterprise.

Debate (on motion by Senator McKenna) adjourned.

LEAVE OF ABSENCE TO ALL SENATORS.

Motion (by Senator McLeay) - by leave - agreed to -

Thatleaveofabsencebegrantedtoevery memberoftheSenatefromthetermination ofthesittingthisdaytothedateonwhich the Senate next meets.

SPECIAL ADJOURNMENT.

Motion (by Senator McLeay) agreed to-

That the Senate,atitsrising,adjourntoa dateandhourtobefixedbythePresident, whichtimeofmeetingshallbenotifiedtoeach senator by telegram or letter.

PAPERS.

The following papers were presented :-

AirForceAct-Regulations-Statutory Rules1952, No. 49.

Air Navigation Act - Regulations - Statutory Rules 1952, No. 46.

Apple and Pear Export Charges Act - Regulations - Statutory Rules 1952, No. 44.

Canned Fruits Export Charges Act- Regulations - Statutory Rules 1952, No. 40.

Canned Fruits Export Control Act - Regulations - Statutory Rules 1952, No. 57,

Coal Industry Act - Joint Coal Board - fourthAnnual Report, and Auditor-

General’s report on accounts, for year 1950-51.

Commerce (Trade Descriptions) Act - RegulationsStatutory Rules 1952, No. 48.

Conciliation and Arbitration Act - Regulations Statutory Rules 1952, No. 55.

Cotton Bounty Act - Return for 1951.

Dairy Produce Export Charges Act - Regulations - Statutory Rules 1952, No. 41.

Defence (Special Undertakings) Act- Order in relation to a Restricted Area (dated with June, 1952).

Defence (Transitional Provisions) ActNational Security (Industrial Property) Regulations - Orders - Inventions and designs (2.)

Regulations - Statutory Rules 1952, No. 47.

Dried Fruits Export Charges Act - Regulations - Statutory Rules 1952, No. 42.

Flax Canvas Bounty Act - Return for 1951-52.

Immigration Act - Regulations - Statutory Rules’ 1952, No. 53.

Lands Acquisition Act - Land acquired for - Defence purposes -

East Hills, New South Wales.

Geraldton, Western Australia.

Lara, Victoria.

Marceba, Queensland.

Puckapunyal, Victoria.

Department of Civil Aviation purposes -

Mount Magnet, Western Australia.

Postal purposes -

Forrest, Western Australia.

Furracabad, New South Wales.

Grenfell, New South Wales.

Middle Park, Victoria.

Narromine, New South Wales. .

Parawa, South Australia.

St. Mary’s, Tasmania.

Sydney, New South Wales,

Trangie, New South Wales.

Wilcannia, New South’ Wales.

Yarranjerry, New South Wales.

Young, New South Wales.

Meat Export Charges Act - Regulations-

Statutory Rules 1952, No. 43.

Meat Export Control Act - Regulations - Statutory Rules 1952, No. 45.

Nauru -

Movement of Natives Ordinance - Admin i stration Order 1952, No. 1.

Ordinances - 1952 -

No. . 1 - Dangerous Drugs.

No. 2 - Post and Telegraph.

No. 3 - Laws Repeal and Adopting.

No. 4 - Judiciary.

Post and Telegraph Act and Wireless

Telegraphy Aet - Regulations - Statutory Rules 1952, No. 52.

Public Service Act -

Appointments - Department -

Civil Aviation - H. G. Hampton, G. P. Whitfield, H. G. Williams.

Commerce and Agriculture - E. K Simmons, W. B. Tudor.

Defence - W. C. V. Hammer.

Defence Production - F. N. Allchin,

  1. G. Coates, A. Crawford, I. Lang, J. A. Lister, L. J. McLean, N. C. Mills, W. R. Nicholson; F. V. Sprawson, G. S. Sutherland.

Health - E. M. Tom.

Interior - H. Gates, F. K. Keyte,E. C.

McKinna, J. E. C. Miller, C. L. Pierrehumbert, P. J. R. Shaw, R. P. Sheard.

Repatriation - R. M. Brennan, R. W. Goggins, P. D. Tracey.

Shipping and Transport- R. A. Waters.

Social Services - M. E. Tellscher, E. M.

Webb.

Supply - J.G. Brookman,G. T. Jansen. Territories - A. D. Campbell, B. R. Jephcott.

Works- S. P. Burgin, P. J. Courtney, A. W. Hart, J. Johns, P. B. Jones, II. A. Kennerson, P. A. Lewis, N. R. Lonsdale, J. McNeil, S. R. Moulton, J. H. Rowland, D. W. Ryan, R. S. Sheldon, L. A. Smith, N. T. Stanton, A. G. Tessier.

Regulations - Statutory Rules 1952, Nos. 51, 54 (Parliamentary Officers).

Public Service Arbitration Act - Determinations by the Arbitrator, &c. - 1952-

No, 43 - Amalgamated Engineering Union and Others.

No. 44 - Commonwealth Public Service Clerical Association.

No. 45 - Association of Railway Professional Officers of Australia.

No. 48 - Commonwealth Public Service Artisans’ Association.

No. 47 - Amalgamated Engineering Union and Others.

No. 48. - Australian Workers’ Union.

No. 49 and 50 - Commonwealth Public Service Clerical Association.

No. 51- Federated Clerks’ Union of Australia.

Seat of Government Acceptance Act and Scat of Government (Administration) Act-

Ordinance - 1952 - No. 7 - Canberra Community Hospital.

Regulations - 1952 - No. 12 (Canberra Community Hospital Ordinance).

Services Trust Funds Act - Regulations - Statutory Rules 1952, No. 50.

Sulphur Bounty Act - Return for 1951-52.

Tractor Bounty Act - Return for 1951-52.

Wine Overseas Marketing Act - Regulations - Statutory Rules 1952, No. 56.

Senate adjourned at 0.10 p.m., to a date and hour to be fixed by the President.

Cite as: Australia, Senate, Debates, 6 August 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19520806_senate_20_218/>.