Senate
27 October 1959

23rd Parliament · 1st Session

  1. Senate
  2. 23rd Parliament
  3. 1959

The PRESIDENT (Senator the Hon. Sir Alister McMuIiin) took the chair at 3 p.m., and read prayers.

page 1159

QUESTION

UNEMPLOYMENT IN QUEENSLAND

Senator BENN:
QUEENSLAND

– Will the Minister representing the Minister for Labour and National Service ask his colleague to have a special examination made of the present unemployment situation in the central district of Queensland, which includes Rockhampton, to ascertain whether a special grant should be made to local authorities in the area for the purpose of commencing public works which could be economically carried out by employing manual labour instead of machines?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I shall ask the Minister whether he will have an investigation made of any unemployment situation that has developed in the central district of Queensland, but I point out once again that the use of public works to alleviate any such situation is really a matter for the State government concerned, using moneys provided for those works under the Australian Loan Council and other such procedures.

page 1159

QUESTION

NAVAL BASE

Senator VINCENT:
WESTERN AUSTRALIA

– My question, which is directed to the Minister for the Navy, relates to a recent article in the “ West Australian “ concerning the establishment of a naval base at Fremantle. Has the Minister seen the article which states, inter alia, that “ The Times “ of London lends support to the establishment of such a base? I should like him to comment, if he can, on the views expressed in the article. Can he state whether the British Government is interested in the establishment of a naval base for servicing portion of the British navy in the Indian Ocean? If it is not, can he say whether the Australian Government has any further plans in relation to the establishment of either a full-scale naval base or a modified base at Fremantle?

Senator GORTON:
LP

– I have not seen the article in “ The Times “, referred to by the honorable senator, but I have heard of it.

It has been brought to my attention. It is, as I understand it, an article suggesting that the British Government should take particular action, and not an article suggesting that the Australian Government should take particular action. I do not think that I either can or should comment on suggestions made by “ The Times “ to the British Government, or on the notice that the British Government ought to take of such suggestions. So, I do not feel that I can answer- that part of the question asked me by the honorable senator:

As to the establishment of a major naval base in Western Australia by the Australian Government, I have before pointed out that construction of a major naval base involves the expenditure of very many millions of pounds. A dock is required of a size suitable to take a large ship; cranes running on rails in order to lift machinery out of such a ship and bring new parts to it also are required, as are machine shops. A vast conglomeration of repair facilities around such a dock or docks is required, and is immensely expensive. The Australian Government has a major naval base at Garden Island dockyard which is more than capable of coping with the ships in the Australian Navy. The expenditure of a large sum of Australian money to duplicate that dock, at the expense, as it would have to be, of expenditure on fighting power for the Navy, would not, in my opinion, be justified at present.

page 1159

QUESTION

MELBOURNE PEACE CONFERENCE

Senator ARNOLD:
NEW SOUTH WALES

– I ask the acting Leader of the Government in the Senate whether he has seen a reported statement by Professor Stout, of Sydney, in relation to the peace congress in Melbourne, part of which reads as follows: -

On 1st October, with my permission the head of the Security Service, Brigadier Spry, visited me at the University. He was able to offer me documentary evidence of what I had already come to suspect about the Congress - that it was Communist promoted, organized and controlled.

Is this reported statement correct? If so, will the Minister have tabled the documentary evidence shown by Brigadier Spry to Professor Stout, so that the Parliament may have an opportunity to scrutinize the security documents already made available to a private individual?

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– I imagine that the question should more properly have been addressed to the Attorney-General, but nonetheless I take the opportunity to answer it. The statement attributed to Professor Stout indicates that Brigadier Spry called on him with his permission. That means, I imagine, that the meeting was by appointment, or by arrangement. Having called on the professor, Brigadier Spry discussed with him certain aspects of this conference and, according to Professor Stout, showed him certain documents which confirmed the view which the professor had or, to use his own words, “ what I had already come to suspect “. In other words, the call and the conversation merely confirmed a substantial doubt already existing in the mind of Professor Stout. I very much doubt whether the papers that were discussed with Professor Stout, or, indeed, shown to him, would be made available to the general public, which is not interested in this conference in a particular way, as Professor Stout himself was, but I shall discuss that aspect of the matter with the Attorney-General as soon as possible.

page 1160

QUESTION

NAVAL BASE

Senator SCOTT:
WESTERN AUSTRALIA

– I ask the Minister for the Navy a question that is supplementary to that which was asked by Senator Vincent. The matter is of vital importance to the defence of the west coast of Australia, and, of course, of Australia generally. In the event of a limited war how would Australia, in conjunction with the United Kingdom, fare in using the bases at Hong Kong and Singapore? The opinion has been expressed that if a limited war did occur, those bases would be of no use to Australia or to the United Kingdom. How can we expect to defend Australia if we have not got a naval base on our west coast?

Senator GORTON:
LP

– The possession and continued operation of the naval bases in Hong Kong and Singapore depend entirely upon the judgment of the United Kingdom, which operates those bases now. The United Kingdom decides where, in its opinion, naval bases can best be placed to suit its needs. It is not competent for me, or, I think, for any member of the Australian Government to express opinions on the judgment of the British Government in relation to the location of its naval bases.

page 1160

QUESTION

MONEY LENDING

Senator BROWN:
QUEENSLAND

– I desire to ask a few questions of the acting Leader of the Government in the Senate. Does not the rise, recently in evidence, of a new range of financial institutions outside the banking system mean that the banks cannot, or will not, meet the demand for money? Is this due to Government action? What part have the banks played to offset the competition of these new money-raising institutions? Is it not a fact that the banks have acquired shares in these mushroom growths? Is the whole business a healthy or an unhealthy sign? What can the Government do to safeguard the interests of the small investors, whose funds may be in danger from financial racketeers?

Senator PALTRIDGE:
LP

– It is true that in recent years, in conformity with the economic growth of this country, there has. been an increase in the number of institutions which have interested themselves in financing activities of all sorts throughout Australia. It is also true, no doubt, that the activities of these institutions have had varying effects on the traditional and conventional instrumentsof lending - the established trading banks. I would hesitate to say that the: expansion of this type of lending institution is in itself a bad thing for Australia. What it means, in fact, is that more people are showing a growing confidence in this country and are prepared to lend money for itsfurther expansion to large industrial, manufacturing and business undertakings, and, equally, to the small man, about whom Senator Brown is apprehensive. It is quitetrue that some of the banks have interested themselves financially in these companies, but I repeat that the expansion of the companies indicates in a broad sense the growing strength of the Australian economy with the passage of the years.

page 1160

QUESTION

ROAD SAFETY

Senator DRURY:
SOUTH AUSTRALIA

– My question isdirected to the Minister for Shipping and Transport. Is it a fact that Sir Thomas Meagher, the President of the NationalSafety Council of Western Australia, is in. conflict with the policy being pursued by the Australian Road Safety Council? Isit a fact that there is evidence to suggest that Sir Thomas Meagher’s attitude is in-. keeping with a campaign, fostered by certain interests in the motor trade, to discredit the work of the Australian Road Safety Council and its officers, particularly the chairman? Is it a fact that the National Safety Council of South Australia has directed the Minister’s attention to unjustified attacks which are designed, in the interests of outside pressure groups, to be disruptive of the splendid work of the Australian Road Safety Council?

Senator PALTRIDGE:
LP

– I am aware that Sir Thomas Meagher has from time to time differed from the policy which has been pursued by the Australian Road Safety Council, and indeed by its president, Mr. Paterson. But, as every Western Australian knows, Sir Thomas Meagher is a man of great character and great forthrightness, a man with power and ability to express an opinion. If he holds an opinion, he does not fail to express it. That merely indicates that the Australian Road Safety Council has attracted to it men of the calibre that we really need.

Any suggestion that the interest of Sir Thomas Meagher derives from some vested interest, or some interest by association, is merely to indicate that the gentleman making the suggestion does not know the calibre, quality or character of Sir Thomas. He is a man of outstanding ability who, in times of peace and war, has served his State and this country with outstanding distinction. The fact that he happens to differ, as he does on this occasion, from Mr. Paterson - it could be from me next week - does not detract from that splendid character which he holds. I have not received anything from the National Safety Council of South Australia. If there is something on the way, then the honorable senator is aware of it before it reaches me. I shall wait for it with interest.

” PRINCESS OF TASMANIA.”

Senator O’BYRNE:
TASMANIA

– By way of preface -to a question addressed to the Minister for Shipping and Transport, I should like to point out that we people of Tasmania are very proud of the advent of the new line of communication between the mainland and our island. I refer to the “ Princess of “Tasmania “. We are very jealous of its good reputation, and we are very grateful to the Australian National Line for introducing this great service. Anything that will detract from the good reputation of this service is frowned on very much by the people of Tasmania.

The PRESIDENT:

– Order! What is the question?

Senator O’BYRNE:

– Has the Minister, seen the latest report from Hobart in which it is reported that members of the Australian Public Service Federation who visited Tasmania in the “ Princess of Tasmania “ said that drunkenness, bad language, larrikinism and lack of supervision were rife during their voyage? That is a very serious charge, and in view of the fact that I raised this matter last week, I should like to ask the Minister whether the responsible officers of the Australian National Line have any plans to deal with such a situation. Can the Minister inform the Senate what is the best thing to do at this time in order to stop this kind of conduct?

Senator PALTRIDGE:

– This matter came to my notice late yesterday. Immediately, I got in touch with the management of the Australian National Line in Melbourne and was informed that the complaint to which the honorable senator refers had already been investigated by the manager, who had heard of it before I had. He had interviewed the officers and members of the crew, and had received no official complaint from the people concerned. Nor had a complaint been lodged with the master, with any officer, or with any member of the crew, as to the conduct of some travellers, about which a complaint was subsequently made.

I want it to be clearly understood - because I realize how Tasmanians feel about this new ship, and their desire that it should be properly conducted - that passengers are not permitted to take liquor on board. Incidentally, the bar on board closes at 10 p.m. When liquor has been taken on board and discovered, it has been confiscated from the boarding passengers, but it will be appreciated that the policing of this rule cannot be done without difficulty, because liquor can easily be carried on board in suitcases. Drinking in the lounge is prohibited. Arrangement has been made for one of the stewards to patrol the corridors and deal with any rowdiness should rowdiness occur. One lounge has been set aside for the use of women and children only.

I have issued the instruction that, in view of the source of the complaint, a further inquiry should be made into it. I assure the honorable senator, and indeed the Senate, that any conduct of this type will be stamped out with the utmost vigour. It will just not be permitted.

page 1162

QUESTION

NAVAL BASE

Senator WRIGHT:
TASMANIA

– My question to the Minister for the Navy is prompted by his replies to the questions of my colleagues, Senator Vincent and Senator Scott. Is it to be inferred from the Minister’s answers that the establishment of a British naval base in the Indian or Pacific Oceans has not been the subject of consultation between the British Government and the Australian Government? Will the Minister assure the Senate that, before the mind of the British Cabinet is made up, representations will be made concerning this Government’s view as to the most appropriate site for such a base?

Senator GORTON:
LP

– I do not think that it ought to be inferred from my replies that this matter has not been, or would not be, a subject for consultation. These questions which have been asked me to-day are based purely on an article in “ The Times “ newspaper, which expresses an opinion that something should be done. I repeat, it is not, in my opinion, proper for a member of the Australian Government to make public statements as to whether he agrees or disagrees with such remarks in “ The Times “ newspaper; nor, indeed, to make public statements on what is, after all, the business of the British Government - insofar as it would be financially responsible for carrying out any proposals which, so far as I know, have at this stage only been made in a newspaper.

page 1162

QUESTION

SOCIAL SERVICES BOOKLET

Senator PEARSON:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Minister for Social Services. In view of the high cost of printing the booklet which gives details of Commonwealth social services, will the Minister consider publishing the next booklet in a form similar to that of the booklet issued last year by the Repatriation Department entitled “ Repatriation Benefits “? In that booklet the rates of pensions, allowances and benefits current at the time of printing can, when necessary, be easily removed by tearing along perforated edges provided at the back of the booklet. New supplements can be inserted from year to year, as rates are altered. It has been suggested to me, Mr. President, that if the social services booklets were prepared in such a manner it would be a great benefit to all those who are interested in these matters, and the department would save money in the process.

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– I shall be happy to bring to the notice of the Minister for Social Services the suggestion made by the honorable senator, which seems to offer a way of improving the present arrangement from the point of view of streamlining and the saving of costs.

page 1162

QUESTION

CONSTITUTIONAL REVIEW COMMITTEE

Senator McKELLAR:
NEW SOUTH WALES

– I direct a question to the Minister who is acting Leader of the Government in this chamber. Can he inform the Senate whether the report from the Constitutional Review Committee will be available to honorable senators before the close of the present sessional period?

Senator PALTRIDGE:
LP

– I am not in a position to supply the information. I shall make inquiries and let Senator McKellar know the position.

page 1162

QUESTION

COMMONWEALTH OFFICES, SYDNEY

Senator ARMSTRONG:
through Senator Wiilesee

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

Will the proposal to alter the plans for the extension of Elizabeth-street in Sydney make necessary any alterations to the proposed new Commonwealth office block to be erected on the Elizabeth-street extension?

Senator Sir WALTER COOPER:

– The Minister for the Interior has furnished the following reply: -

The Commonwealth building as planned is wholly within the boundaries of the Common’ wealth-owned site so that any treatment of the street system and open space at the intersection of Elizabeth and Phillip-streets with Hunterstreet which the City Council may desire can be carried out without any alteration to the new office block as now planned. However, the proposal for the treatment of the open area facing the Commonwealth building as suggested by the Department of Works will considerably improve traffic and pedestrian amenities in the open space and also improve very materially the appearance to the forecourt approach and main entrance to the new building.

page 1163

LEAVE OF ABSENCE

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

That leave of absence for one month be granted to Senator Hannan on account of ill health.

page 1163

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 2) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The amendments to the income tax law proposed in this bill are those which the Treasurer (Mr. Harold Holt) foreshadowed in the course of presentation of the Budget for 1959-1960. Honorable senators will recall that last year income tax allowances were introduced with a view to the encouragement of capital investment in the search for oil in Australia and its territories of Papua and New Guinea. Among other important features, this bill broadens the scope of those allowances. The existing provisions, as enacted last year, authorized the deduction of the full amount of capital subscribed for oil exploration to companies engaged solely or principally in mining or prospecting for petroleum in Australia, Papua and New Guinea. Certain limitations were, however, placed on the allowances, one of which was that the allowances were not available to taxpayers who were not residents of this country, including companies incorporated in Australia, but controlled from abroad. The limitation was justified on the ground that the treasuries of the United Kingdom and the United States of America provided the appropriate measure of taxation relief. It is, of course, from those two countries that all, or practically all, overseas capital in oil exploration in Australia and its territories is subscribed. This was a sound approach to the problem, and this principle is being preserved by this bill except in regard to capital invested by the Australian subsidiaries of overseas companies.

Subsequently to the enactment of last year’s legislation, it came to the knowledge of the Government that any taxation relief by the United Kingdom or the United States of America was not available to the overseas parent company for capital invested in oil exploration by the Australian subsidiary company. It will be agreed, 1 am sure, on all sides that this position calls for rectification. It is accordingly proposed by the bill that these Australian subsidiaries of the overseas companies shall be eligible alongside Australian residents foi the deduction of capital invested in the search for oil in Australia, Papua and New Guinea.

Another limitation placed last year on the deduction was that the allowance was granted for capital subscribed only on those shares of oil exploration companies which were issued on and after 1st October, 1958. This limitation is being relaxed to the extent that capital subscribed on and after 1st October, 1958, on shares issued prior to that date is to be eligible for the deduction.

Another relaxation of the present provisions relates to capital subscribed to companies which do not undertake oil exploration directly, but provide finance to companies which are so engaged. At present, the deduction of capital subscribed to the financing company is not allowable until the capital so subscribed is paid over by the financing company to the company actually engaged in oil exploration. The bill relaxes the existing provisions so as to enable, in certain circumstances, the investors in the financing company to secure a deduction for their capital investment in the income year in which the moneys are paid, notwithstanding that the financing company may not have paid over the capital to an oil exploration company until a subsequent income year. In these cases, the Commissioner of Taxation will require to be satisfied by appropriate declaration that the moneys invested will be used for oil exploration. Correspondingly, provision is made, as before, to curtail the deduction of capital expenditure which would otherwise be allowable to the oil exploration company under the special mining provisions of the Assessment Act in the event of the discovery of petroleum in commercial quantities.

In conjunction with these new proposals, action is being taken to ensure that sharedealers will not be deprived of the incentive to subscribe capital for oil exploration. At present, a share-dealer, in common with other taxpayers, is eligible for the deduction of the capital he subscribes for oil exploration. When, however, the sharedealer sells his shares- the taxable profit or deductible loss on those shares is calculated on a basis that does not permit of the allowance of the amount he has outlaid in acquiring the shares. Provision is being made accordingly to preserve the allowance to share-dealers in these circumstances.

Looking at the provisions enacted last year, together with the widened scope of the allowances now proposed, it may safely be said that tens of thousands of Australians are being afforded, by way of taxation relief, great encouragement in the investment of funds in the search for oil, the discovery of which is so vital to this country.

I turn now to proposals in this bill affecting private companies. Private companies may, in a general way, be described as those companies which are owned or controlled by or in the interests of relatively few shareholders. In the main, these companies are comprised of members of one family or family groups. Private companies, for taxing purposes, are distinguished from public companies which, for the most part, are companies listed on recognized stock exchanges. Companies, both public and private, pay tax on their profits at the rates prescribed in the rating bill. There is no undistributed income tax payable by public companies which are free to retain the profits they earn without incurring any further tax liability. On the other hand, private companies become liable to an undistributed income tax if they do not, within a specified time after the close of the income year, distribute a sufficient quantity of their profits to their shareholders.

The present basis of taxing private companies allows for these companies to retain certain percentages of their trading profits before liability to undistributed income tax may be incurred. The Government recognizes the need for private companies, as with public companies, to reserve portion of their profits for expansionist programmes and financial stability. Under existing economic conditions the Government considers that the present retention allowances, as they are called, should be increased. This bill accordingly provides for a minimum retention allowance of 35 per cent, of trading profits in lieu of the existing 25 per cent. No alteration is proposed, however, in the present 10 per cent, retention allowance applying to income from property, for example, rents, interest and dividends from public companies. The increased allowance will apply to the income year 1958-59 and subsequent income years.

Other important clauses of the bill relate to the deduction of capital expended by mining enterprises in the provision of housing and welfare for mine employees and their dependants. As the law stands, housing and welfare expenditure is deductible in annual amounts over the estimated life of the mine. In the case of expenditure on plant and development of the mining property, however, the capital expended may be recouped over the life of the mine or, alternatively, in the income year in which the expenditure is incurred. The need is recognized for mining enterprises to provide additional housing and welfare to attract the necessary labour force in a period of expansion and particularly in remote areas.

The Government believes that the development of the mining industries will be encouraged and advanced and the financing of the enterprises assisted if the deduction of expenditure on housing and welfare is not unduly protracted. This bill accordingly affords an option to mine-owners to deduct housing and welfare expenditure in five equal annual instalments. The option may be exercised in relation to the income year 1958-59 and subsequent income years. Provision is being made also to enable mineowners who have incurred expenditure on housing and welfare during 1955-56 and subsequent income years to elect to have the new basis of deduction applied to so much of that expenditure as has not qualified for deduction prior to the income year 1958-59.

Special attention is invited to the clause of the bill relating to the deduction of medical expenses incurred by aged taxpayers. There is at present a limit of £150 upon the amount of medical expenses that may be claimed in respect of one person, that is, the taxpayer, or a specified dependant. To afford special relief to aged taxpayers who may be involved in heavy medical expenses, it is proposed to remove the present limit upon the allowance in the case of medical expenses paid by a taxpayer who is over 65 years of age, where those expenses are incurred on his own account or on account of his spouse, where she is also over 65 years of age. The amendment will apply to medical expenses paid during the income year 1959-60 and subsequent years of income.

It is proposed also to include the following institutions and funds in the list of prescribed organizations, institutions, &c, to which gifts of £1 and upwards are at present allowable deductions for income tax purposes: - The National Trusts established in Western Australia and the Northern Territory; public funds providing money for approved marriage guidance organizations; the Australian National Committee for World Refugee Year; and the Council for Jewish Education in Schools. The deduction will apply to gifts in the current income year 1959-60 and in future years.

The next provision of the bill that I think should be mentioned relates to the deduction of amounts paid for life assurance premiums, superannuation contributions and other like payments. Since the Government assumed office, the scope of these allowances has been enlarged from time to time and has afforded a very wide range of taxpayers valued assistance in providing for their years of retirement and a measure of financial security for their dependants. The present limit on this deduction is £300 annually. It is proposed that the limit be raised to £400. The increased deduction of £400 will apply to the income year 1959- 60 and subsequent years of income.

There seems to be some misapprehension in some quarters that the increase of £100 in the maximum allowance will be of advantage to relatively few taxpayers in the higher income brackets. I think this misapprehension may be removed if I let the Senate know that prior to the introduction of this year’s Budget a survey indicated that at least 25,000 taxpayers would have the advantage of the higher allowance. The aggregate tax saving to these taxpayers has been estimated at £400,000 or £16 each on the average.

Not the least important feature of the bill is the proposal to grant to residents of Australia who have been victims of Nazi persecution, exemption from tax in respect of moneys which they have received in this income year and will receive in future as compensation from the West German Government for injuries and losses sustained. Some of these allowances at present technically fall within the classification of assessable income. Full exemption will operate from the commencement of the income year 1959-60.

There are several clauses in the bill of a relatively minor nature which I do not propose to outline, as a full explanation of the clauses is contained in the explanatory memorandum which is available to honorable senators.

Debate (on motion by Senator Willesee) adjourned.

page 1165

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

By this bill it is proposed to declare the rates at which tax will be payable by individuals and companies for the current financial year 1959-60. The major feature of the bill is a reduction of 5 per cent. in the tax payable by individuals. This reduction will be effected by means of a rebate of tax of1s. in the £1 and will mean a saving to individual taxpayers of £20,000,000 in a full year and £17,900,000 in the current year.

New tax instalment schedules came into Operation on 1st October, 1959, so that, from that date, lower tax instalments have been deducted from salaries and wages. An appropriate reduction will be made in the provisional tax payable by individual taxpayers engaged in business or professions, or deriving income from investments. Provisional tax is payable in respect of incomes from such sources in the current year 1959-60 and will be notified in assessments to be issued on 1958-59 incomes. Consequent on the increase in the age pension payable from the first of this month, a corresponding increase is proposed in the income tax age allowance. That allowance is provided in the cases of men who have reached the age of 65 years and women 60 years.

For the last income year 1958-59, tax was not payable by an. aged person if his or her net income did not exceed £410. In the income range between £410 and £460, tax was charged on a lower scale than that applying to younger taxpayers. For the current income year 1959-60, the exemption level is being raised from £410 to £429 and tax on the reduced scale will be payable on incomes up to £485.

In the case of a married taxpayer contributing to the maintenance of a spouse, tax was not payable on last year’s income if the combined net income of husband and wife did not exceed £819. For 1959-60, it is proposed that the exemption will be raised to £858. Provision is made for the payment of tax at lower than the normal rates where the net income of the taxpayer does not exceed £1,181. The revenue reduction of these extensions of the age allowance will be £550,000 in a full year and £400,000 in 1959-60.

As no change is proposed in the rates of tax payable by companies, the bill provides for the re-enactment of the rates of tax which applied for the financial year 1958-59.

There is no need for me to discuss in any detail the remaining clauses of the bill which are for all practical purposes the same as those enacted for the 1958-59 financial year.

I commend the bill to honorable senators.

Debate (on motion by Senator Willesee) adjourned.

page 1166

CUSTOMS TARIFF BILL (No. 3) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I move -

That the bill be now read a second time.

Honorable senators are requested to consider a bill relating to duties of customs which have been in operation since 14th May, 1959.

Most of the amendments now being made are based on recommendations made by the Tariff Board in its reports on -

Printed silk piece goods;

Bathing hats and bathing caps;

Towels and towelling;

Woollen goods; and

Woodworking chisels.

Protective duties are being provided for printed piece goods which are wholly or predominantly of silk. The new rates are l0½d. per square yard under the British preferential tariff,1s. 3d. per square yard under the intermediate tariff, and1s. 5d. otherwise. A consequential administrative amendment is being made to item 105 (d) (1) (b).

In regard to bathing hats and caps, increased duties of 12½ per cent, ad valorem British preferential tariff, and 22½ per cent, otherwise, are being imposed on those hats and caps which are wholly or predominantly of rubber. The rates for other bathing hats and caps are unchanged.

The Tariff Board in its report on towels and towelling said that there was no justification for any major change in the rates applicable to towels, towelling and bath mats. However, the board has proposed some rationalization of existing provisions for these goods and this involves some changes in the tariff structure with consequent slight reductions in duties, mainly in the intermediate and general tariffs.

In its report on woollen goods, the Tariff Board recommended that two alterations be made to the customs tariff. Firstly, the board proposed that items 105(f)(1) and 105(f)(2), which cover woollen piece goods, be amalgamated as a means of overcoming tariff classification problems. The Government has accepted this suggestion in principle. However, amalgamation of the items would at present involve a breach of commitments accepted under trade agreements with other countries. The Government has therefore commenced negotiations for the modification of these obligations and expects to be able to implement the board’s recommendation at a later stage.

The second change related to wool tops and the effective duties on these goods are being reduced by 4d. per lb. The reduction in the intermediate tariff is a little less than that proposed by the Tariff Board, because of preference commitments accepted by Australia in the 1957 trade agreement with the United Kingdom.

Bevelled edge patternmakers’ long thin paring chisels previously were subject to non-protective rates of duty. In consequence of the Government’s acceptance of the recommendation of the Tariff Board, these chisels now become subject to protective duties of 20 per cent. British preferential tariff, 27½ per cent, under the intermediate tariff, and 32½ per cent, when the goods are subject to the general tariff. No change is proposed in respect of other woodworking chisels.

I commend the bill to honorable senators.

Debate (on motion by Senator Courtice) adjourned.

page 1167

CUSTOMS TARIFF BILL (No. 4) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY (Tasmania - Minister

That the bill be now read a second time.

Mr. President, this bill forms part of the 1959-60 Budget and gives effect to the Government’s decisions to reduce by id. per gallon the import duty on motor and aviation spirit and to rationalize the duties on other petroleum oils.

The decision to reduce the import duty on motor and aviation spirit was based on a recommendation of the Tariff Board that the level of protection to petroleum refining be reduced by id. per gallon. Honorable senators will recall that the relevant Tariff Board report was tabled by me in the Senate during August.

The Government chose to reduce import duties rather than to increase excise duties in the expectation that the public would derive some benefit from the reduced taxation. Honorable senators will remember that petrol distributors did in fact lower by id. per gallon the retail price of petrol to consumers.

The new import duties are 9½d. per gallon for aviation gasoline and1s.0½d. for motor spirit, regardless of the origin of the goods. The duty reduction involves a revenue loss of approximately £300,000 in the present financial year and £340,000 in a full year.

As I have already said, the bill provides for a rationalization of duties on many petroleum oils. This has been done by abolishing the primage duties on the oils and making provision in the tariff schedule for rates at a level equivalent to the former customs duties plus primage duties.

The opportunity has also been taken to clarify and bring up to date the terminology used in some of the tariff items covering petroleum products.

I commend the bill to honorable senators.

Debate (on motion by Senator Courtice) adjourned.

page 1167

CUSTOMS TARIFF BILL (No. 5) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I move -

That the bill be now read a second time.

The bill now before honorable senators amends the schedule to the Customs Tariff 1933-1959. The new duties have been in operation since 9th October, 1959. Most of the alterations now being made are based on recommendations made by the Tariff Board in relation to -

Cotton sheeting;

Fluorescent lamps;

Diphenylamine and phenothiazine;

Artificial silk yarns; and

Clothes pegs.

The remaining amendments proposed by the bill are made primarily for administrative reasons.

Honorable senators may recall that by Customs Tariff (No. 2) 1959, Act No. 22 of this year, increased duties were provided for plain or matt-woven cotton sheeting. In view of Australia’s international commitments, it was not possible to fully implement the findings of the Tariff Board in respect of these goods until trade negotiations with certain overseas countries had been carried out by the Government. I am pleased to say that the negotiations have been successfully concluded and the amendment now proposed by this bill adopts in full the Tariff Board’s recommendation in relation to plain or matt-woven sheeting. Also included in the board’s report on cotton sheeting was a recommendation for increases in the substantive rates of duty applicable to twill sheeting. This recommendation has now been brought into effect at the highest level consistent with Australia’s overseas commitments. The rates are 4d. per lb. plus 27½ per cent, ad valorem under the British preferential tariff and l0d. per lb. plus 45 per cent, otherwise.

The existing duties on fluorescent lamps have been reduced on the recommendation of the Tariff Board. The new rates are 1s. per lb. under the British preferential tariff, 2s. 6d. per lb. under the intermediate tariff and 4s. per lb. otherwise. On present values, there is little variation in the duties payable on lamps entitled to entry under the British preferential tariff but the rate of 2s. 6d. per lb. represents a significant reduction for lamps the manufacture of a country which is accorded most-favoured-nation treatment. The opportunity has been taken to group all lamp globes and tubes under a new item, 181 (d). This means that references to lamps in items 180(d), 181 (a) (1) (b) (1) and 320 (b) (2) have been transferred from those items to the new item 181 (d). No change of rates or wording, apart from fluorescent lamps, is involved in the new tariff structure.

Phenothiazine is a chemical used in the control of worm infestation in live-stock, particularly in sheep. Diphenylamine is a chemical which is used in the manufacture of phenothiazine. In its report on these goods, the Tariff Board recommended that the protective duties on phenothiazine be reduced to 10 per cent, ad valorem under the British preferential tariff and 17½ per cent, otherwise. However, the board recommended that no change be made in the duties applying to diphenylamine. The board’s findings are being adopted by the Government.

In its report on continuous artificial silk yarns the Tariff Board recommended that no change in the present rates of duty be made. The board, however, suggested that monofil of 60 denier or more, regardless of its end use, should be classified under item 390 (a) (2) (a) as an imitation gut. Previously monofil used for spinning and weaving was conditionally classified as a yarn under item 392 (g). The Government has accepted this recommendation by the board and an appropriate exclusion has been inserted in the relevant tariff item.

The items relating to yarns wholly or chiefly of man-made fibres have been redrafted to provide a more compact tariff structure capable of easier administration. Yarns wholly or chiefly of continuous manmade fibres, but not containing wool, have been grouped in one item, 392 (g) , while staple fibre yarns (discontinuous), but not containing wool, have been grouped in item 392 (I). There are some duty reductions of a minor nature in the intermediate and general tariffs. The Government has also accepted a recommendation by the Tariff Board for an extension until 30th June, 1962, of the provisions of the Rayon Yarn Bounty Act. I hope to be able to deal with the appropriate legislation in this Senate during the current session.

On clothes pegs the Tariff Board has recommended increased protection on spring-type pegs and reduced protection on other pegs. The new rates on spring-type clothes pegs will be1s. 3d. per gross when admissible at Brtish preferential tariff rates and 2s. per gross otherwise, and this represents an increase of 6d. per gross on both rates. The duties on other clothes pegs have been lowered by 3d. per gross and primage duty has been removed. As I said previously, there are several amendments of an administrative nature.

Item 206(a) has been amended by deleting the reference to parts not elsewhere included, of lamps and lanterns. This allows parts to be dealt with in accordance with the general direction relating to parts imported separately, that is, as a general rule parts take the classification applicable to the complete goods of which they form part. This amendment will remove some anomalies. For example, parts for oil heating lamps were previously 5 per cent. British preferential tariff and 45 per cent, otherwise under item 206(a) whereas the complete oil heating lamp is dutiable at 12½ per cent. British preferential tariff and 27½ per cent, otherwise. Parts for oil heating lamps now become dutiable at the same rates as the complete lamp.

A further amendment relates to pestles and mortars. Item 174 (x) (50) is being widened to include all runner mills irrespective of the composition of the pestle and mortar incorporated therein. The restriction that pestle and mortar shall be of wedgewood, whatever that may mean, is considered to be archaic and there is now no restriction on the type of material which may be used, for example, agate, cast-iron and others. A consequential amendment is being made to item 263. I commend the bill to honorable senators.

Debate (on motion by Senator Courtice) adjourned.

page 1169

EXCISE TARIFF BILL (No. 2) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I move -

That the bill be now read a second time.

This bill reduces by 3d. per ton the excise duty on coal mined in Australia. The new rate of 5d. per ton has been in operation since 1st September, 1959. This duty, as honorable senators may be aware, provides a trust fund from which payments for long service leave benefits to coal miners may be made.

The fund is in a very healthy financial state. The Government has recently examined the expected demands on the trust fund in the foreseeable future and considers that its stability can be assured with the reduced rate of 5d. per ton excise duty now proposed. I commend the bill to honorable senators.

Debate (on motion by Senator Courtice) adjourned.

page 1169

EXCISE TARIFF BILL (No. 3) 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I move -

That the bill be now read a second time.

The provisions in this bill are complementary to those in Customs Tariff Bill (No. 5), which is at present being considered by the Senate. The alterations proposed will bring the terminology in the Excise Tariff Schedule in relation to petroleum and shale products into line with that used in the Customs Tariff. No change in excise duty is involved. I commend the bill.

Debate on motion by (Senator Courtice) adjourned.

page 1169

LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Gorton) read a first time.

Second Reading

Senator GORTON:
Minister for the Navy · Victoria · LP

– I move -

That the bill be now read a second time.

This bill provides for the raising of loan moneys amounting to £7,000,000 for war service land settlement. It is estimated this amount will be supplemented by £3,860,000 expected to be available from repayments of advances made to settlers from State and Commonwealth contributions to the excess of cost over valuations placed on holdings, from sales of surplus land and from payments by settlers to freehold the farms at present leased by them. Capital expenditure by the Commonwealth on war service land settlement during the financial year 1959-60 is, therefore, estimated at £10,860,000, which it is proposed to advance to the States in the following proportions: -

Since the scheme commenced in 1946, and up to 30th June, 1959, the total amount advanced by the Commonwealth to these five States for war service land settlement has been approximately £80,000,000. New South Wales has provided about £43,000,000 and Victoria £46,000,000 making a total of £169,000,000 for the acquisition and development of land and advances to settlers.

Honorable senators are no doubt aware that the Commonwealth provides the whole of the capital moneys required for the war service land settlement scheme in South Australia, Western Australia and Tasmania. I am pleased to be able to inform them that sufficient farms are at present under development in Western Australia and Tasmania to meet the demand from classified ex-servicemen in those States. In fact, due to lack of interest by Tasmanian ex-servicemen, over 110 farms from the King and Flinders Islands projects have been allotted to ex-servicemen from the mainland. This satisfactory position is due, in no small way, to the long sighted policy of developing large tracts of virgin land rather than relying solely on sufficient partially developed land becoming available for purchase.

In South Australia, despite the extensive development undertaken on Kangaroo Island and the 254 irrigated horticultural and viticultural holdings established at Loxton, there will be some classified exservicemen who will not obtain farms under the scheme. All such ex-servicemen were some time ago advised accordingly and urged to find farms themselves and to submit those farms for inclusion in the scheme. It is indicative of how tightly suitable land in South Australia is held that only three such proposals were submitted to the Commonwealth in the two-year period ended 30th June, 1959.

Both New South Wales and Victoria originally elected to provide the capital moneys for war service land settlement from their own resources. In an endeavour to accelerate settlement in these two States the Commonwealth, over the past four years, has been supplementing the funds provided by the State governments. The amount to be advanced to New South Wales and Victoria during this financial year will be the last under the existing arrangement. It is believed that the Victorian Government will be able to settle all classified ex-servicemen by that date or meet the needs of any not so settled by a civilian closer settlement scheme, but a number of men in New South Wales will not obtain farms under the scheme. I think it is fair to mention, however, that any unsatisfied applicant in New South Wales has had the same opportunity as the 1,374 ex-servicemen who sought out farms for themselves and had those farms acquired for them under the promotion provisions of the State legislation.

Up to 30th June, 1959, the number of farms provided in each State was -

Generally, the war service land settlement scheme is drawing to a close. Future acquisitions in South Australia, Western Australia and Tasmania will be confined to properties submitted for consideration prior to 30th June, 1959. The emphasis in these States will be on completing the development of projects already under way. lt appears that the number of war service land settlement farms provided will represent only 25 per cent, of the number of classified applicants. However, other forms of assistance have been provided for ex-servicemen wishing to buy their own farms. If it can be accepted that the 14,300 ex-servicemen who were granted agricultural loans under the Commonwealth Re-establishment and Employment Act and the 2,800 people assisted under the Victorian single-unit farm scheme were also classified for war service land settlement, the percentage would be nearly 75 per cent. Of the balance there are many who have evinced no active interest in the scheme for some considerable time, and I- think it is safe to assume they may have become reestablished in other vocations.

Apart from its re-establishment purposes, war service land settlement has made and will continue to make a substantial contribution to our national wealth. The more intensive land use practised following the subdivision of large estates and the produce from over 1,500 farms developed from lands which formerly produced little or nothing, has played and will continue to play a significant part in increasing Australia’s primary production. This return to the nation over the years will more than compensate for the money which will have to be written off to give settlers operating on 100 per cent, credit reasonable prospects for success.

Naturally, settlers under the scheme, particularly those allotted holdings more recently, have been adversely affected by the lower prices being received for some of Australia’s primary produce. Such matters, outside the control of the settlers, are being watched closely, and measures are being taken as required to tide settlers over the difficult period of establishment. The farms have been designed along sound lines and, with a reasonable balance between prices for the produce sold and the average cost of production, settlers should be able to obtain a reasonable return for their labour and management and still build up equity in their farms to the degree necessary for them to take their places as members of the normal farming community.

Financial assistance to all States for noncapital expenditure, for example living allowances to settlers, interest and rent remissions, writing down of cost of holdings, &c, which is estimated at £2,000,000 for the present financial year, will be met by the Commonwealth from Consolidated Revenue. Expenditure to 30th June, 1959, for these purposes amounted to approximately £11,000,000.

I commend the bill to honorable senators.

Debate (on motion by Senator O’Byrne) adjourned.

page 1171

APPROPRIATION BILL 1959-60

In committee: Consideration resumed from 22nd October (vide page 1156).

Department of Shipping and Transport.

Proposed Vote, £1,240,000.

Senator POKE:
Tasmania

– In dealing with the proposed vote for the Department of Shipping and Transport, I want to stress the significance to Tasmania of transport by sea. It is most important to us, not only for the transportation of our primary and secondary products to mainland and overseas markets, but also for the importation of commodities that we need for our own use. Being an island State we are, naturally, more dependent upon shipping than upon any other form of transport. Though quite an amount of air transport is availed of, shipping is the only practical means of transporting many of our exports and imports.

In addressing myself to the expansion of secondary industries generally, I would refer particularly to the growth of the Australian Aluminium Production Commission’s undertaking at Bell Bay. In the year 1958-59, metal produced at Bell Bay amounted to 11,890 tons. Over the years since the establishment of that undertaking, production has expanded considerably, and profits have increased accordingly. In 1956-57 the profit earned by the industry was in the vicinity of £52,000. In 1957-58 it was £55,792. For 1958-59 it was £158,734. Those figures indicate a considerable expansion in this one industry alone. With the co-operation of the Tasmanian and Federal Governments, it is expected that 16,000 tons of metal will be produced annually. The Tasmanian Government, by way of assisting in this direction, has voted £1,500,000 towards the further construction of the plant. A further indication of the increased productivity in the industry is given by the peak weekly production rates. In 1955-56 the peak figure was 490 tons. In 1956-57 it was 513 tons, or an increase of 23 tons. In 1957-58 the peak rose to 600 tons - an increase of 87 tons. In 1958-59 it jumped to 700 tons - an increase of a further 100 tons. We can see how necessary it is for the Government to provide additional shipping in order to take care of the growing production from this industry alone.

There has been a rather significant change in the administrative side of the Department of Shipping and Transport. An examination of Part XIV. of the Schedule of Salaries and Allowances indicates that the number of assistant secretaries has increased by two - with a very natural effect on administrative costs. For 1958-59 the appropriation for the First Assistant Secretary and Assistant Secretary was £5,769. However, for 1959-60, the proposed vote is £10,859, an increase of £5,090. No doubt the Minister, in replying, will give the reason for this increase. I am afraid that I cannot see the need for it. The Minister might also give the Senate the reason why expenditure on this section of the department has risen. I venture to say that quite a number of people would like to know why the number of assistant secretaries has been increased by 100 per cent.

I have already referred, in speaking of one Tasmanian industry, to the necessity for providing an adequate shipping service to that State. I should like now to express my disappointment that the Minister should have authorized the sale of some of the River vessels. Upon referring to the report of the Department of Shipping and Transport we find from the Australian shipping and shipbuilding statistics that four such ships were sold. They were the “ River Hunter “, which was built in 1946, the “ River Mitta “, which was built in 1945, the “ River Murray “, which was built in 1 945, and the “ River Norman “, which was built in 1946. It is rather significant to note that one firm, A. G. Sims Limited, bought all four vessels. It is also interesting to note from the report that this firm has head-quarters in four capital cities. I understand that the sale price of the vessels was in the vicinity of £55,000 each. That was almost a gift. One realizes that when one remembers that it cost £2,400,000 to build the “ Princess of Tasmania “. Those ships, which were built in 1945-46, had a fair amount of life left in them. They would be thirteen or fourteen years old now, and I am assured by competent authorities that the economic life of a ship is in the vicinity of 25 years.

It is rather disappointing to think that this Government would sell such ships when Tasmanians have, on a number of occasions, been unable to get transport for their commodities to mainland and overseas markets. Frequently we have had, on the north-west coast of Tasmania, tons of potatoes whose transportation has been held up merely becuse there has been a shortage of shipping. When I was associated with the timber industry the sawmillers themselves frequently asked me to endeavour to prevail upon the Government to make more shipping available to transport their product from Tasmanian ports to the mainland markets. As 1 said a few moments ago, many of us would like to hear the Minister comment on this matter, and I hope that he will do so during this debate.

During the last three years the production of timber in Tasmania has been reduced mainly as a result of the shortage of shipping at a time when the merchants could effectively market their product on the mainland. Another reason, probably, for the drop of production in the timber industry is the fact that freight on timber from Tasmania to the mainland markets is far too high when compared with the freight charged on timber from Malaya to the Australian market. When I last checked the respective freights I found that the freight charged on Malayan timber coming to the Australian market compared favourably with the freight charged on Tasmanian timber coming to the mainland markets.

I mentioned previously that a number of primary products had been left at the Tasmanian ports. I want now to refer to potatoes. In successive seasons over the last three years, the production of potatoes in Tasmania has increased. In 1955-56 the production was 78,000 tons, rising to 90,000 tons in 1956-57 and 101,000 tons in 1957-58. This is a further indication, Mr. Chairman, that production, both primary and secondary, in Tasmania is increasing, and more shipping should be made available to transport Tasmanian products to the mainland markets. There has been increased production of peas, hops and apples. The production of apples has increased considerably over recent years, with the exception of the year 1956-57 when a bad season was experienced. That was the only year of the last four years in which the production of apples was down. It is essential to provide ships to move the Tasmanian apple crop at times that the apples are ready for shipment. I realize, of course, that in this connexion the coastal shipping does not play so important a part as the overseas shipping. I hope that the Minister will ensure that adequate shipping will be provided to convey Tasmania’s products to the various markets.

The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! The honorable senator’s time has expired.

Senator ORMONDE:
New South Wales

– I have been asked by the waterfront unions to raise the matter about which I intend to speak, and I feel sure that the Minister for Shipping and Transport (Senator Paltridge) will heed my request; he always gives honorable senators a patient hearing. The matter concerns shipbuilders on the Sydney waterfront. It is not necessary for me to relate fully the story concerning Morts’s Dock. The once thriving shipbuilding industry carried on at Mort’s Dock employed 1,000 shipbuilders, who have now gone to the four winds. As far as I can gather from the unions, these men have now left the shipbuilding industry. This is a very serious matter that the Government should consider. I could not imagine a situation arising in this mercantile nation in which we would not need shipbuilders. Therefore, the Government should make every effort to keep the shipbuilding industry alive.

Recently, I asked the Minister for the Navy (Senator Gorton) a question about the Cockatoo Island Dockyard. I shall refer to the matter now, although I may not be strictly in order in doing so, because it concerns the shipbuilding industry. The

Minister said that there were no further orders in sight after completion of the “ Parramatta “, I think, at the Cockatoo Island Dockyard. This is a very serious state of affairs. 1 have now been informed by the union that Poole and Steel Proprietary Limited have only a very short run at its shipbuilding yards. The workers at those yards expect to be out of work within a very short period of time. I do not know what the Government can do about the matter, although 1 do not think that it has been investigated as closely as it should be. I know that the shipbuilding yards in Western Australia and in other parts of Australia are occupied, but I think some consideration should be given to the older yards even though they are not so well equipped to build the bigger ships as are the newer yards.

There is a social side of this problem. As the workers in the mining industry live in the mining districts, so do the workers who are engaged in the shipbuilding industry live in the waterfront areas. Only last year, 50 workers were displaced from their employment with Poole and Steel Proprietary Limited. Slowly but surely the men engaged in the shipbuilding industry are turning to other industries and the position could well arise that within a short period of time no shipping engineers will be available. I ask the Minister to give me an assurance that the position will not be allowed to worsen, because the unions in Sydney are very concerned about the matter. I know that a good deal of argument could be advanced both for and against the closing of Mort’s Dock - the length of time that was involved in the building of certain ships, and that sort of thing. Nevertheless, the dock was closed and now the area is being sold to be used for other purposes. As the Minister knows, the Australian Shipbuilding Board uses the State shipyard at Newcastle from time to time. At that dockyard, a profit-sharing scheme is in operation. I suggest that if the scheme were extended to other shipbuilding yards there may be better results all round. I shall leave it to the Minister to examine fully the situation that has been placed before me by the unions concerned with the Sydney waterfront.

Senator ARNOLD:
New South Wales

– This is one of the most important Commonwealth government departments. I have been disturbed for some years because 1 believe that Australian shipping is not taking its rightful place in the economy of the nation. Senator Ormonde has suggested that there is a need to take action to preserve the Australian shipbuilding industry and to prevent skilled men from leaving the industry. Any one who looks at the problem must be convinced that what he has said is perfectly true. When we became engaged in a world conflict in 1941, the facilities for building and repairing ships in Australia were appallingly inadequate. In fact, they were almost non-existent. Because Australia has 12,000 miles of coastline and depends largely for its existence on shipping, that was indeed an alarming situation. As the conflict spread towards this area, there were more and more casualties in all kinds of shipping and more types of ships needing repair, so we tried hastily to gather together numbers of men and to train them in the art of building and repairing ships, but we were always behind with the job that we were trying to do, although it was a job that a maritime nation should have been capable of doing. However, the government of the day decided to see to it that in future sufficient shipbuilding and ship-repairing facilities would be provided in Australia and kept in existence by the action of this department.

Until 1949 that was the position. We continued the work of shipbuilding throughout Australia. We made it difficult for any one to have a ship built overseas for use along the Australian coast. In fact, legislation was passed through this Parliament that laid down the programme that was to be followed. That legislation embodied the ideas of the government of the day as to how Australia could become a powerful maritime nation. When the present Administration took over, it threw aside those plans, and to-day the position is that, with very little difficulty, any private shipowner can have ships built overseas for use on the Australian coast. The reasoned plan of the Labour government was abandoned, and a new policy was put into operation.

Australia is spending millions of pounds on defence. We are training boys in the Army by requiring them to walk round paddocks at week-ends. Despite the expenditure of millions of pounds, that system has produced only half-trained soldiers. We are paying tremendous sums of money for aircraft which are thrown aside as obsolete after four or five years. The Labour Party argues that it would be better to use some of that money to preserve and expand an Australian industry to build and repair ships, and thus make the nation capable of providing all the sea transport that it requires. The Labour government tried to do that. At one stage there were in Australia six or seven shipyards fully engaged, and there was a programme of work that gave them an opportunity to generate and develop the skills required. I feel sure that if that programme had been continued, Australia would now be turning out ships that would compare with those produced anywhere else in the world. It is true that we did not have in Australia all the facilities of the British and Swedish shipbuilding yards, that we could not build ships of the tonnage that they could build, and that our costs were higher than costs overseas, but we did have shipbuilding and ship-repairing facilities in the course of development that would have been capable of looking after the requirements of this country.

Senator Ormonde has put this problem before the Minister and has urged that action be taken in the interests of the men engaged in this industry. I understand that they number about 5,000. I understand, too, that the Tariff Board has reported on this industry, although I have not seen its report. Ten or eleven months have elapsed since the matter was referred to that body. I understand that it has been said that if about 3,000 more men had been employed in the industry, there could have been a three-fold increase in the amount of shipping. I understand also that it has been said that it is uneconomic to build at the present rate and that the industry should receive more encouragement from the Government. If we want to be in a position to meet Australia’s requirements in war-time, we ought to spend more money on the provision of these facilities. That should be done in the interests of the nation.

My next point is that, in my opinion, this department has fallen down badly in dealing with the problem of transporting our products overseas and bringing to Australia goods from overseas. I understand that last year the freights alone on goods imported to Australia amounted to £130,000,000, and that another £80,000,000 or £90,000,000 was expended on freights on goods exported from Australia.

Senator Wright:

– Does the senator suggest that the Australian shipbuilding industry could make a contribution to a solution of this problem?

Senator ARNOLD:

– I certainly do. Why cannot Australian ships carry our produce overseas?

Senator Wright:

– Has the honorable senator ever cast up the extra costs that’ would be incurred?

Senator ARNOLD:

– The amount paid overseas for insurance of ships and cargoes totals millions of pounds. That money would be sufficient to provide decent conditions for thousands of Australian seamen. Used for the purpose of our own shipping industry, it would make a worth-while contribution to the Australian economy. I know that there are people in the community who prefer that ships trading with Australia should be manned by Malays, Indians or men of other nationalities, rather than by Australians, working under Australian conditions, if that would mean reduced freights. The farmer expects to get a subsidy on his butter and many other people in Australia expect hand-outs from the Government for many purposes. Why should not the Australian people be served by Australian ships to take their goods to other countries and bring their requirements here? Why should not a saving be made in insurance costs, and why should not we get away from the monopoly which now controls shipping? It may be said that costs would rise if we used ships built in Australia and if only Australian seamen were employed, but at the present time we have no say at all in what it costs to send our goods overseas or to bring goods here.

Senator Wright:

– Yes, we have.

Senator ARNOLD:

– At present the ships trading with Australia are controlled by an association of twenty or more shipping companies. It. is true that on that association there is some representation of Australian primary producers and exporters, but their representation is small. Basically, the control of shipping to Australia is in the hands of overseas shippers, who from time to time lay down what freights shall be charged. What could the Government do if it intervened in this matter? We are told that recently it managed to get the shippers to reduce a proposed increase by 2 per .cent. Freights were raised by 14 per cent., and the Government said that, but for its intervention, the increase would have been 2 per cent, greater. I suggest that the shippers asked for a 16 per cent, increase and were prepared to be beaten down to 14 per cent., which is what they had intended to get. We are in the position that we are held to ransom. Because Australia lacks shipping resources of its own, it must rely on a monopoly service which is able to say to Australian importers and exporters, “ This year we will carry your goods at so much a ton,, but as costs have risen, next year we will have to increase the rate by 14 per cent.”.

I know that Senator Wright is always interested in this matter. Let me show him how freight rates have increased in the last ten years.

Senator Wright:

– As I am interested, before doing that will the honorable senator tell me what evidence he has that the A.O.T.A. is governed by overseas shipping interests?

Senator ARNOLD:

– The shipowners have a majority of representatives on the A.O.T.A. As with the Government in this Parliament, they have the numbers. We on this side of the Parliament may have all the logic - and that is usually the case - but those on the other side have the necessary numbers, and of course, the Government is able to do what it wants to do. I point out to Senator Wright that in 1949 shipping freights increased by 10 per cent. In 1951, there was a 15 per cent, rise; in 1953, a 7i per cent, rise; in 1955, again a Ti per cent, rise; and in 1957, a 14 per cent, rise. At the moment, the shipowners are meeting to decide whether freights should be increased or decreased. If any honorable senator opposite wants to have a little bet as to whether or not freights will be increased, I am willing to bet that they will be increased. That is the position in which the department has left Australia in recent years.

I suggest to the Government that instead of allowing ships to be laid up or sold for scrap - ships of only ten or twelve years of age which ought to have a life of at least 25 years - it should be using them to carry our goods to the ports of the world. I feel that no genuine attempt has been made by the department to grapple with this problem. Is it not ludicrous, as Senator Poke pointed out earlier to-day, that it is cheaper to bring timber from Malaya to Melbourne than it is to bring timber from Launceston to Melbourne? That is because this department of the Government has not protected Australia against a monopoly being able to lay down the prices that the Australian people must pay to transport goods to and from overseas countries.

Senator Mattner:

– Is the Tasmanian timber carried by coastal ships?

Senator ARNOLD:

– I think they are coastal ships. I am not prepared to be dogmatic about it.

Senator Mattner:

– They would be Australian ships, I take it?

Senator ARNOLD:

– Possibly they are.

Senator Mattner:

– Then that is your answer.

Senator ARNOLD:

– What I am saying is that this nation has no way of transporting its goods to and from other parts of the world, other than by ships controlled by this monopoly transport association. It is true that the ships of the Australian National Line, together with our rail and road transport services, carry goods at something like reasonable prices, but we have nothing to compete with the overseas ships in transport to and from overseas ports. We must pay whatever the owners demand from us.

While we have this monopoly control, we also have a need for a substantial body of people skilled in shipbuilding and ship repairing. We could do something to defeat that monopoly control, and at the same time assist in the defence of this country, if we built up that body of skilled people. We could help to protect Australia by seeing to it that, in peace time, we built our own ships, maintained our own shipyards and gave them work to do and a chance to develop the shipbuilding industry on economic lines. By doing that, Sir, not only could we protect our nation against the possibility of finding ourselves, as in 1941, with insufficient shipping, but we could also assist in breaking this monopoly of which I have been speaking. An effort of that kind would help our primary producers. How much better economically it could be if shipping freights to other parts of the world were cheaper. I saw some figures recently which indicated the cost of transporting overseas a bag of wheat.

The CHAIRMAN:

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

Senator POKE:
Tasmania

.- Having heard Senators Ormonde and Arnold express their views on shipping and shipbuilding, I must say that I am now more concerned than ever about the shipping position. I spoke previously of the primary and secondary production of Tasmania. In case I may be twitted to the effect that the primary and secondary production of Tasmania is of rather small proportions compared with that of other States, let me say, Mr. Chairman, that although the area of Tasmania may be small and its total production not equal to that of other States, the commodities that Tasmania produces are necessary to the economic welfare of Australia as a whole. That is the feature that we have to watch when we are dealing with such an important matter as transport, particularly sea transport.

I wholeheartedly support the Australian National Line for many reasons, one of the main reasons being that I think it is doing a particularly good job in providing facilities for us to get our goods to the markets. In addition, it contributes quite substantially to the revenues of the Government. The Chairman of the Australian Coastal Shipping Commission, in the annual report for the year 1959, pointed out that for the third successive year the operations of the Australian National Line had produced a profit which, after the deduction of approximately £1,191,000 for company tax, again warranted the payment of the usual 6 per cent, dividend to the Treasury. There is an indication that this line is doing a two-fold service to the Australian economy as it provides the necessary link between ports of export and import, and returns to the Treasury a considerable amount of money which could be put back into the shipbuilding, if the Government so desired, creating employment for Australian workmen in the shipbuilding industry and other industries. The chairman also stated -

In that time, without adding to its working capital, it has paid out £8,694,382 for new ships, has provided £2,753,018 for Company Tax, and has declared dividends to the Treasury of £2,394,447.

There is no need for me to elaborate on those figures for honorable senators to realize that the line is making a considerable contribution to the Australian economy.

The matter of overseas shipping freights which was touched upon by Senator Arnold, causes me considerable concern. Very recently there has been a conference between the overseas shipowners and Australian import and export agents regarding the fixing of these freight rates. I thank Senator Arnold for supplying us with pm.ticulars of the increases since 1949-50. 1 am concerned with the question of why the Government has not made some approach for representation at the conference or conferences that will be taking place on the freight charges for the next year or two. 1 know perfectly well that if overseas freight charges are increased, this will have a very detrimental effect on the economy of the Commonwealth. Its effect on the Tasmanian timber industry will be considerable. I know of one timber firm in Tasmania that has built up quite a considerable market in England for its products. Its margin of profit is only very small, and if there should be a steep increase in freight charges between Tasmania and the United Kingdom, this firm will lose that market, as it will be costed out by the increase in freights. If the firm loses that market, it will have to curtail production, quite a number of employees will lose their employment, and some other country will capture that United Kingdom market. I ask the Government to have a good look at this matter and inform the Senate whether it will be possible, even at this late stage, to seek from the overseas shipping interests favourable consideration for the retention of freight charges at their present level. Australia will be rendered a good service if we can avoid an increase in these rates.

Senator WRIGHT:
Tasmania

.- I was prompted to take part in this debate by what Senator Arnold said when advocating that shipbuilding activities should be intensified in Australia for the purpose of our ships engaging in overseas trade. There is nobody more alive than I am to the importance of keeping freights on our exports from Australia on a reasonable basis. I have shown a continuing interest in that matter for a number of years, but the situation is reaching a critical stage this year, and attention to the problem is much more deserved this year than it was in any year since 1949, because with overseas markets causing apprehension the freights on our exports to those markets are a vital factor. I speak with a lively consciousness of their importance not only to timber, to which Senator Poke referred, but also to Tasmanian apples. Putting in a word by the way, we do not want to overlook the elephant - the weight of the steep rise in Australian coastal freights - a factor that is ruining coastal shipping and prejudicing interstate trade.

Within the last two months I asked a question that was designed to clarify my mind as to the integrity and independence of the Australian Overseas Transport Association. I sought information from the Minister for Trade (Mr. McEwen) as to the constituent elements of that association. I remind the Senate that the association had its genesis in a proposal made by the Bruce Government in 1929, which was immediately accepted by the Scullin Government when it succeeded the Bruce Government. The fact that the arrangement then established has been accepted by all parties since that time is, I think, a standing challenge for critics, responsible and irresponsible, to make a practical suggestion for improvement before indulging in scurrilous and irresponsible criticism. I do not often use those terms, as either a direct or indirect answer to what falls from Senator Arnold, but I do believe that on this occasion he spoke with a spirit of irresponsibility. If I am wrong, I want the facts.

I have gone to my files and reminded myself that the Australian Overseas Transport Association was established in 1929. It consists of the president and not more than 25 member representatives of producers, wool buyers, meat exporters, dairy produce exporters, fruit exporters, egg shippers and other exporters, overseas transport interests, and not more than 25 representatives of the overseas shipping representatives’ associations in the various States. I have pointed out, as this record confirms, that we then established two combines, one representing the shippers and one representing the exporting interests of Australia. We permitted the exporting interests to combine, contrary to the ordinary provisions of the Australian Industries Preservation Act, so that with their combined strength they would match the overseas shipping interests. The constitution of the Australian Overseas Transport Association shows that there are two members representing wool-growing interests, two representing meat-growing interests, two representing wool buyers’ associations, two representing meat exporters’ associations, two representing the Dairy Produce Board, two representing fruit shippers’ associations, one representing egg shippers’ associations, two representing importers appointed by the Associated Chambers of Commerce, one representing the Australian Canned Fruits Board and the Commonwealth Dried Fruits Control Board conjointly, one representing exporters, and six other members, one of whom may be appointed by each of the State exporters overseas transport committees. The recital of that constitution does not prove that none of those representatives could have shipping interests, but it helps us to analyse the situation and clarify our minds on the facts. I shall pursue this scrutiny for the purpose of satisfying myself whether those who are members of the Australian Overseas Transport Association, representing our exporters and producers, have any material interest in the. overseas shipping companies, thus sapping their independence as representatives.

With regard to freights, I well remember the Minister for Shipping and Transport (Senator Paltridge) replying to a question asked of him about six months ago as to whether ships built by the Australian shipbuilding industry and manned by Australian seamen could complete with the ships of the Overseas Shipping Representatives Association. I well remember his stating that the freights charged at that time would need to be increased inordinately if we had to absorb Australian costs of shipbuilding and the cost of wages paid to Australian seamen. The Minister has been good enough to give me a copy of a document incorporat- those cost factors. For a motor vessel of 10,000 tons, the daily running cost computed on an overseas basis is £332 and the comparable cost computed on an Australian basis is £489.96. It is of no use to claim that Australian seamen should be employed on the basis of those inordinately high costs. We can give our own seamen prosperous employment within this closed economy of ours, but, without adversely affecting our exporters, we could not employ them on our own overseas ships, in competition with seamen from other parts of the world, because companies employing those other seamen can carry our products at much cheaper rates.

Passing on from there, I remind myself that in March, 1957, the accountants who were sent to investigate the cost structure of the Overseas Shipping Representatives Association set-up reported that they had examined the profits records of 2,186 companies in the United Kingdom, and that those records disclosed that those companies showed a return of 17.4 per cent, on capital employed. When they turned to the shipping companies, they found that up until 1956 the return on capital employed by the shipping companies was 1.43 per cent., after providing for a depreciation of 3.6 per cent, on replacement costs. It is fresh within our recollection that, following on that report, there was an increase in shipping freights. We are perturbed at the repetition of increases, stemming from a not inconsiderable factor - the high cost of stevedoring and other charges incurred when overseas shipping companies’ vessels are on the Australian coast. These high costs incurred by the companies then are due, not merely to wage rates, but also to the time for which their ships are held up in Australian ports. Because of the unpredictability of programmes, their costs are excessively increased.

Senator Ormonde:

– Also because of the lack of mechanization.

Senator WRIGHT:

– There are still some old-fashioned minds which find refuge in the idea of nationalization. I should like to see more British shippers here, vigorously employed and keeping their ships in competition with other shippers in the world’s trade. I think we would then get a better result. At any rate, that was the experience during a comparable period in the late 1920’s. 1 am not saying these things in defence of any exporting or shipping interests. This is a real problem, but a solution will not be found by adopting the suggestions that have come from the other side of the chamber. We must recognize that the system under which we are working has continued since 1929. It may be that in the world’s shipping market to-day we could make a bargain with another shipping organization to give us a steady programme of shipping services year by year at a lower cost, but that has yet to be demonstrated. The conference line of ships, in relation to the industries of which I have some knowledge, undoubtedly provides us with a very efficient service. I say that notwithstanding the fact that those interested in the apple industry complain of the time taken in voyages and also of the congestion of arrivals in some ports of the United Kingdom. The service is not free from criticism by any means, but, comparatively speaking, it is the best that I know of.

It is fantastic to suggest, having regard to Australian shipbuilding costs, that we should endeavour to expand into the world shipping trade. Our export trade would be ruined if it were dependent on carriage by Australian ships. I am not speaking with any degree of contentment. I am perhaps more restless than the critics whom I am combating. I am still awaiting from the Minister an actual analysis of the constitution of the Australian Overseas Transport Association for the purpose of satisfying myself that, although the representatives do represent the various exporting interests I have mentioned, they are entirely separated from any interest in the shipping world. It is essential that they should be so separated.

The final thing I wish to say, for benefit of the Minister, is that if there is an increase in the freight on apples this year, I see no possibility of the industry being maintaned unless the Government comes to its rescue. The present freight is very high. The ‘Australian Apple and Pear Board pointed out in its annual report that the industry will be in danger if, without some assistance from the Government, it has to bear the burden of an increased freight.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I take this opportunity to compliment the Australian Coastal Shipping Commission upon the financial success of its operations during the year ended on 30th June last. It is no mean performance for the commission, which has been in existence on the new basis for the past three years, to have made provision out of profits for surveys costing more than £750,000, to have provided £1,250,000 for depreciation, to have made provision for income tax amounting to £1,100,000, and to have paid a dividend at the rate of 6 per cent., totalling £985,000- In short, the Commonwealth revenue has benefited, out of a turnover of some £13,000,000, to the extent of more than £2,000,000. The financial side of the operations of the commission is shown very clearly. This is a case for gratification, and I think for congratulations to the commission.

Senator Wright:

– The dividend is 6 per cent., is it not?

Senator McKENNA:

– Yes. I referred to a proposed dividend at the rate of 6 per cent., which is quite healthy, after the payment of income tax amounting to £1,100,000.

Senator Wright:

– But you could not economically assess the industry without making provision for taxes, could you?

Senator McKENNA:

– Economically, I should say one could not. If one wants to compare it with those normally in the field, of course that could not be done. I am not critical of the figures; I am complimenting the commission on the end result, and am merely mentioning the interim figures by way of leading to the end result.

I should like to take a minute or two to refer to an answer given by the Minister to a question asked by Senator Kennelly on 8th October regarding the sale of “ River Burdekin “. The Minister set out in his answer that the vessel was refitted at a cost of £470,000 in 1956, that the survey was completed on 16th October, 1956, and that two years later it was laid up. He stated that until it was laid up it had earned £145,000 in profits, but that from the time it was laid up until it was sold the expenses associated with its lying idle amounted to £97,000. The Minister also said that the vessel was finally sold for £70,000, plus £600, after the cost of having the vessel delivered had been allowed lor.

Ignoring altogether the price at which the vessel stood in the books of the commission, I think it is a rather alarming position with respect to one vessel that there should be, after the renovations back in 1956 - a loss of £302,000 over the threeyear period. Obviously the ship was expected to have a considerable life after that year. To that loss, would have to be added whatever was the residual value of the ship in the books of the commission, when one determines the actual total loss.

The ship was sold to Indonesia. It may be that there is some element of help to that country to account for the situation I have indicated. If there is, I think it should be disclosed by the Minister, and if that were the case, no doubt one would not complain beyond adding that some recompense should be made to the commission for its be’ng asked to make some contribution to assist Indonesia. I think the Minister will agree that, on the face of it, it is very bad business that some £400,000 should be spent on the ship in 1956 and the ship should be sold three years later for a mere £70,000.

Senator Wright:

– Was it purchased by the Indonesian Government?

Senator McKENNA:

– It was sold to Djakarta Lloyd, a shipping company with headquarters in Djakarta, Indonesia. It went into the Indonesian trade on 6th August of this year.

I should like also to refer the Minister to the answer he gave Senator Kennelly on 20th August last when, in answer to questions, he indicated that twelve ships from the line had been laid up, that of those twelve two were sold in 1957, five in 1958 and one in 1959, and that four were still laid up as at August, 1959. The Minister gave the interesting information that over the same period the line had commissioned some eleven new ships with tonnages comparable to those of the ships that had been laid idle.

I want to concentrate solely upon the sale of the vessels. 1 understand that the ships were brought into the commission’s books, when it took over from the old body, at the rates operating on the Baltic exchange, which I understand were reasonably low at that time. So the commission got off to a good start in the matter of valuation of assets. Would it be possible for the Minister, if not now, then at some later stage, to advise the committee what was the year in which each of those ships was built? He will find the question he has answered on page 200 of “ Hansard “ of 20th August, 1959. Could he tell us what was the age of the vessels, what was the price at which they stood in the books of the commission at the time, after allowing for depreciation? I should like to have that information so as to have a picture of the total sale. I would not expect to find that any loss was sustained overall because, on looking at the statement of profit and loss for the year ended June, 1959, I find there was a surplus on realization of fixed assets - which would include ships - of £86,382. That is, for one of the three years. So it would look as though, with respect to the sale referred to by Senator Poke of some five ships to Albert G. Sims Limited on 21st May, 1959, a substantial profit was made, but I should like to know what are the facts, along the lines I have indicated, with respect to each ship.

Senator Wright:

– That would only be profit over and above the depreciated book value.

Senator McKENNA:

– That is right. I think the committee should know what was the age of the vessels, and what was the depreciated value. We do know in some cases what was realized for the vessels. I am prompted to the inquiry by reason of the fact that the transaction in relation to “ River Burdekin” seems such an extraordinary one, and I should like an answer to my question as to why such a big loss was sustained there and as to whether that is repeated in relation to any of the other sales. I leave that topic to the Minister with the request for information in the way that I have indicated.

I do support what has been said in relation to policing the conduct of people on “ Princess of Tasmania “. If a larrikin element is to be permitted to obstruct passengers on that vessel and that becomes known throughout Australia, one may find its purpose and scope very severely restricted. I was very happy earlier to-day to hear the assurance of the Minister that positive steps are being taken to ensure that conduct of the type that has been the I subject of complaint will be prevented in the future. 1 should like to ask the Minister, if he will be so good, to indicate whether the commission has given any thought to building a vessel to provide for the Bass Strait Island trade, to operate perhaps between Melbourne, King Island, Flinders Island and the State of Tasmania. Can he say, whether the commission has anything in mind in the way of building a vessel suitable for that trade and establishing, as far as possible, a regular run in relation to it?

I come now to the point raised by Senator Wright a minute ago - the difficulties of the fruit trade in Tasmania by reason of many factors, not the least of which is irregular shipping services. I think it is correct to say that every member of the Federal Parliament representing Tasmania has made representations to the Minister for the establishment of a regular passage and freight service direct from Hobart to Sydney. So far, those representations have not succeeded, but I return to the point and urge the Minister to say whether he sees any further prospects of making some such provision. I am sure he will recognize that once the facility is provided the economics upon which he no doubt bases his refusal at the moment may be altered very appreciably. I stress the importance of that provision for the fruit industry of Tasmania. At present, and down through recent years, the interstate market for Tasmanian fruit has fallen most appreciably; indeed, it has fallen right away. That is attributable to the fact that fruit can be delivered to the capital cities of Australia by road at very short notice, and with a minimum of handling. It is especially true of delivery to the Sydney market.

Senator Wright:

– And it can be provided at a known time.

Senator McKENNA:

– That is so. Delivery of that kind possesses every possible advantage over the delivery of fruit Which has to be handled case by case on arrival in Sydney and moved by hand barrows after perhaps having sustained a buffeting on the ocean; a delivery which cannot be made at a known time. Tasmanian growers have been operating under such a disadvantage that their trade has fallen right away.

Senator Wright:

– When the shipbuilding trade was under control you could get a ship at the proper time.

Senator McKENNA:

– That is so. We had experience of that in the case of “ Zealandia “, which was on a regular weekly schedule. The Tasmanian fruitgrower is faced with a difficult situation. He must contend not only with the high overseas shipping freights which were mentioned by Senator Wright, but also with the practical fact that the fruit trade in Europe has been developed far more intensively hitherto. European storage facilities have been improved immeasurably and European fruit is now going on to the British and European markets in competition with our own. There was a time when we could be sure that Tasmanian fruit would have the market relatively to itself for a period, but improved storage and greater European production has changed all that. Faced with that situation and a gravely-depleted interstate market, the Tasmanian fruit industry will pass through a time of great difficulty unless it can restore its mainland market. That is not possible unless regular shipping exists, and improved handling facilities are provided at point of departure and point of arrival.

I ask the Minister to consider again the plight of this industry; to open his heart and his mind to the question of providing this much sought after Hobart-Sydney direct service. It would complete the excellent work that he and his department have done in providing “ Princess of Tasmania “, and in making ready to provide “Bass Trader”, if a roll-on roll-off service could be provided. Passenger vehicles could roll-on in the north of the island and re-ship in Hobart for Sydney. Such a round trip would prove a tremendous tourist attraction. It would build up the passenger service between Hobart and Sydney, and make a vast difference in trading between the island and the mainland. It would not be right for the Minister to base his decision on current market experience. I feel that he must have a little faith in the fact that the economics of the position would be improved immeasurably once the proper facilities were available.

The CHAIRMAN:

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

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– Senator Poke queried the increase from two to four in the number of assistant secretaries in the department which took place during the year. There was actually no increase in the size of the staff, merely a re-classification by the Public Service Board as a result of which two executive officers were raised in status to assistant secretary.

The honorable senator also referred to the sale of certain ships and suggested that they had been sold at a gift price. That was certainly not the case. The ships were disposed of at a price which, having regard to the state of the market was quite satisfactory. That was also true of the “ River Burdekin “, which was sold subsequently to the Djakarta Lloyd Company. One cannot become enthusiastic about such a price, looked at in absolute terms, but even the most casual glance at Lloyd’s register will indicate that, in view of the existing market, it was more than satisfactory. Ships of that size, age and condition were sold in numbers of other ports throughout the world at prices lower than were obtained by the commission for these ships.

Senator Poke also asked why the ships should have been sold at all. Perhaps I could best answer that by reading a letter which was sent by the Chairman of the Australian Coastal Shipping Commission to” a number of maritime unions which posed the same question. The letter expresses very lucidly the position in which the commission found itself, and the justification for the sale. It reads -

The Australian Coastal Shipping Commission believes that the coastal fleets of the Commonwealth should be maintained at the highest possible standard by the continuing introduction of up-to-date ships, and that only in this fashion can the economic sea carriage of cargoes between ports be achieved and the Australian shipbuilding industry be preserved for the many who depend upon it for a livelihood.

The implementation of the above policy must inevitably call for the disposal of redundant and/or out-moded vessels from time to time, and it is in pursuance of that policy that the “ Rivers “ referred to in your letter have been sold.

Early planning by the Australian Shipping Board and its successors the Australian Coastal Shipping Commission, envisaged the building of large modern bulk carriers in Australian ship yards as replacements for the “ River “ class ships. The plan took note that the latter had been built during the war as light general cargo vessels; that as to strength of construction they were not designed for the heavy bulk loadings which seemed likely to provide the only employment open to them; and that they would reach the end of their economic lives in the years 1959-61.

In execution the plan has brought ten new vessels of 94,000 tons capacity into service. This week yet another, the “ Lake Sorrell “ came on the loading berth. She will be followed by two 14,000 ton ships at present being built in Whyalla for the commission, and by further vessels to the account of private owners.

The planned replacement of the “ Rivers “ is thus now coming about and you will be aware that eight of them have been out of employment for periods of up to 12 months. Considering the volume of new tonnage still to come forward it can be accepted that in time all the “ River “ class vessels will inevitably be displaced in the coasting trade. You may be interested to learn, however, that the Australian Coastal Shipping Commission, at the time of writing, employs more sea-going staff, and carries a greater volume of freight between Australian ports than at any time in its history.

As to overseas voyaging it is a matter of record that hundreds of ships, many of them newer and more efficient than the “ River “ class, have been laid up for long periods in Britain and elsewhere, a condition brought about by the vast surplus of tonnage all over the world, a state of affairs which limits the field for Commonwealth ships.

The survey condition of those “ Rivers “ now laid up is such, moreover, that the cost of reclassifying them under the Australian Register, and without which they cannot go to sea, would go far towards the price of a new vessel, and consequently there is little if any prospect of the ship& under notice being again brought into service by this Commission within the foreseeable future.

It follows therefore that such “ Rivers “ as are in the category referred to must either be sold abroad or allowed to lie at their present moorings until they are fit only to be taken out to sea and sunk.

In other words, in addition to their age, they had reached this condition due to their employment in a trade for which they were not designed. Over a period of years when we had few ships on the coast, and we were chartering them at excessive rates, these vessels met the exigencies that arose as a result of those circumstances. The price, I repeat, was at the time of sale regarded as a satisfactory one. The sale, I repeat, was justified in every sense.

Senator Poke, naturally, spoke of the position of Tasmania and its dependence on shipping. Well, I can only point out to Senator Poke that in recent years a considerable advance has been made in the provision of ships to meet the special requirements of Tasmania. When I say that, I refer, of course, to the coastal trade. The bulk wheat loader, with its equipment, is providing a service to Tasmania which, I would think, is unparalleled anywhere. It has the fastest turnround of any wheat ship on record. The “ Princess of Tasmania “ adds, even if not substantially, to the commercial shipping that goes to Tasmania. At the end of next year we will have the “ Bass Trader “ in service, and that will make a splendid contribution to this trade. I am not without hope that these developments will be followed by private shipping interests putting into service a ship or ships, modern in design, built to meet the new concept of sea transport which will, for their part too, add greatly to the efficiency and to the general economy of transporting goods to and from Tasmania.

Senator Wright:

– They are having considerable apprehension, though, as to new shipping construction, are they not?

Senator PALTRIDGE:

– Yes; you always ask me the most awkward questions at the most awkward times. I think that the apprehension has been overcome.

Senator Poke, naturally enough, had something to say about shipping deficiencies, but in referring to those deficiencies he got about three years behind the times. The north-west potato trade is one which, being of its very nature a seasonal trade - with perishable cargoes - will always have difficulties. I was interested to hear my colleague, Senator Lillico, say the other night that he recalled that 50 years ago the potato producer on the north-west coast complained that he experienced the same difficulties then as do the potato growers in that part of Tasmania to-day. What I can say about the potato trade is that, although it is not possible always to meet the individual requirements of every grower, there has been a very great improvement in the service that has been provided in recent years, and I am extremely pleased to note the success of the growers’ lines experiment. I refer to a semi-trailer loaded with produce from the north-west coast travelling from

Tasmania by “ Princess of Tasmania “ to Melbourne and then to Sydney. Senator Poke also referred to a shortage of vessels to transport timber from Tasmania to the mainland. Sir, it was the Australian Coastal Shipping Commission and the companies themselves which inspired or encouraged the timber shippers to undertake timber stacking prior to loading, and that small experiment alone has had a most advantageous effect on the timber industry generally.

I have been informed by the departmental officers present that although Senator Poke spoke about a shortage of shipping for timber, no complaint in that regard has reached the department for at least three years. He went on to say that the same thing applies at Wynyard in respect of the frozen vegetable trade from the north-west coast. Sir, we did have the opportunity some two years ago to do a turn for that particular trade which evoked the warm thanks of the Tasmanian Government. 1 refer to our putting into use solely for the employment of that trade a refrigerated ship, “ Viti “, which gave, and is continuing to give, splendid service. When Senator Poke engages in this criticism, let him at least be factual and up-to-date.

Senator Ormonde spoke of the shipbuilding situation, particularly in Sydney, and referred to the unfortunate closure of Mort’s Dock and to the position at Poole and Steel’s yard. I do not think it is necessary - nor did he - to go over the unfortunate circumstances which led to the closure of Mort’s Dock. It is certainly very sad to see a firm 100 years old compelled to close. The fact was that for many years prior to closure, Morts could not be regarded as shipbuilders in the ordinary sense at all; they were ship-repairers. Since 1940 they built only two ships - “ Baralga “ and “ Boonaroo “, which the honorable senator will remember. One was delivered three and a half years after the contract date, and the other five and a half years after the contract date. This indicates the unfortunate state of inefficiency into which the yard had fallen.

Senator Ormonde:

– The company’s difficulty was that it could not keep the men employed there and that they moved to other jobs.

Senator PALTRIDGE:

– True enough, and a lot of the trouble there was engendered by industrial conditions! When the men looked at this matter in retrospect and reflected upon it they regarded what happened as being partly their own fault. I know that there were faults on both sides - management and labour. The company tried to pay an extra loading that was not paid at the yards at Newcastle and Brisbane and compete successfully with those yards. The company could not do so. That was the simple arithmetic of the matter.

The CHAIRMAN:

– Order.- The Minister’s time has expired.

Sitting suspended from 5.45 to 8 p.m.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I think that the Minister for Shipping and Transport did not have an opportunity to conclude his remarks. There were one or two matters relating to questions I had raised that he did not have time to deal with. I intervene merely to give him the opportunity to continue.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

, - I thank the Leader of the Opposition. I shall be brief. Before the suspension of the sitting I had dealt with the position at Mort’s Dock. I now wish to refer to the other shipbuilding firm in Sydney, Poole & Steel Limited, that was mentioned by Senator Ormonde. Poole & Steel Limited suffers from the particular disability that it can build only small ships. The tendency, these days, is to have larger ships. I quite realize what the difficulty of the company is. Departments such as the Department of Territories, and possibly even the Department of the Army, may produce a specification to which the company could build successfully. It will certainly be given the opportunity to quote, and perhaps it will be able to get into the game in that way. Meanwhile, although its shipbuilding activity is limited, I am pleased to note that its repairing work goes on.

For the moment, I shall pass over Senator Arnold’s remarks and come directly to the questions asked by Senator McKenna. The first one related to the sale of “ River Burdekin “ and to the expense incurred in 1956 in carrying out a survey of that vessel. First, it should be explained that it is one of the characteristics of shipping bookkeeping, if I may so describe it, that provision is made for surveys during the course of a vessel’s employment before it goes out of class. When the time comes for survey, therefore, provision has already been made for a debit to voyage accounts to pay, or to help to pay, for the survey. So that the money that is spent is not money spent in anticipation of survey and of earning, but money which the ship had in fact earned before she went out of class. This provision for survey is a pretty tricky business, because sometimes a shipping company, with the best intentions in the world, is trapped. You do not know how a ship is going to open up, Sir. You do not know what will be revealed when the plates come off; but nonetheless, this provision is made. The survey which was carried out on “ River Burdekin “ was provided for prior to her going out of class.

The Leader of the Opposition suggests that that was bad business, having in view the fact that some three years later, before she was out of class again, she was sold, and sold for what was apparently a low figure. But when she had run out of class, and when provision had been made for her survey at that time, the fact was that there was plenty of employment for ships on the coast. It so happened that there were no fewer than twelve chartered vessels operating on the Australian coast. The expectation at that time was that there would be employment for her. She was therefore put through survey and brought back into commission. That is something which happens in the shipping business almost daily. It is one of the hazards of shipbuilding. If you could see into the future with reason able certainly for two or three years, of course you could plan, but in this particular instance there were already twelve vessels in charter on the coast and an abundance of employment.

The vessel was not disposed of to the Djakarta Lloyd company with any idea, when the price was settled, of assisting the Indonesians. As far as the commission was concerned it was a commercial sale, and a commercial sale carried out, as were the sales of the first four ships, on a market in which we took a price which was considered, in all the circumstances, as very satisfactory.

Senator McKenna:

– Will the honorable senator say what steps are taken to attract positive buyers?

Senator PALTRIDGE:

– Yes . The usual method followed in selling a vessel is to go to the Baltic Exchange - to put the vessel on the block on the Baltic Exchange. When that is done, the availability of the vessel for sale becomes known overnight by cable at every port in the world where there is a possibility of sale. In this particular case, a number of offers and counter offers was made before Djakarta Lloyd’s offer was accepted. In the case of the other four ships to which I shall refer in a moment, considerably more than twenty offers were received before the final price was accepted.

There is just one other matter that I wish to mention in respect of the “ River Burdekin “ and the survey that was carried out. When a ship is out of class you cannot use it. It is tied up. In the circumstances, with twelve chartered ships on the coast, and with employment for every vessel available at that time, I suggest that to have left her tied up would have been quite unreal.

The other question asked by the honorable senator referred particularly to the sale of the four vessels, the “ River Mitta “, the “River Murray”, the “River Norman “, and the “ River Hunter “. ‘When they were sold, two of those vessels were thirteen years old and two were fourteen years old. I am not in a position to let the honorable senator have the actual book values, but I can tell him that on the sale of the four vessels a profit on book value of £70,000 was made. On the sale of the “ River Burdekin “, a profit of £17.000-odd was made against the recorded book worth.

Senator McKenna:

asked me about the Bass Strait island trade and the possibility of providing a vessel for that service. I am very pleased to be able to tell honorable senators that a most enterprising seaman of the old school, Captain Houfe, is conducting a service, first to King Island and now to Flinders Island, which has proved very satisfactory to date. But it is clear that the growing development on Flinders Island particularly, due to war service land settlement, will create a demand in the course of some two or three years, for a type of vessel that is not now in existence. Having this in mind, I have asked the Australian Shipbuilding Board to consider designing a vessel which could fit into this trade when the sheep population grows and the need for additional and different tonnage arises, so that we shall have ready a vessel of the right type. It is my firm hope that when the vessel is designed private enterprise will step in, build it and conduct the trade, which incidentally has been conducted by private enterprise over a great many years, first by Holyman, and subsequently by Captain Houfe. I should not like to see it go anywhere other than to private enterprise. I would say, in passing, that my colleague, Senator Henty, has been particularly active and interested in the island trade and in the provision of a suitable vessel for it.

Senator McKenna returned to the matter of the Hobart-Sydney service and asked whether something could be done about it. In the bluntest terms, I can only say to the honorable senator that a conventional ship, about which both the enthusiastic people in Hobart and I have been talking, just has not a hope, in the economic sense. Irrespective of what we did, we could not make a ship of the conventional type pay in that service. I have frequently thought that that did not mean that a particular ship could not be provided and meet the demand. I hope that that will not be overlooked by anybody engaged in shipping, who is sufficiently enterprising to see the possibilities of a particular class of ship in that trade.

If I may, in the few minutes I have left, I should like to reply to Senator Arnold, who spoke at length about shipbuilding. When I refer to him, I am very conscious that he served, and served with distinction, on the Australian Shipbuilding Board during the war years and, I think, immediately afterwards, and that his knowledge of the shipbuilding industry is very considerable, but having said that, I say that I think he is applying to to-day’s circumstances the conditions that existed when he was a member of the board. During the war and immediately afterwards, there was a demand for ships of all sorts. Charters on the Australian coast cost the shippers considerable sums and there was a real and continuing demand for the building of ships.

I suggest that it is not quite fair for the honorable senator to say that this Government threw aside the policy of the Labour Government in respect of shipbuilding. Far from it! It was this Government that quite deliberately ensured that greater encouragement was given to shipbuilding in Australia than had ever been extended by a Labour government. The shipbuilding subsidy was increased.

I wish I had time to read from this publication, “Australian Shipping and Shipbuilding Statistics “, the particulars of ships that have been built in Australian yards during the last ten years. This is the first set of such statistics for years, possibly the first in history, to show a nil return for charters on the coast. Not a single charter is left on the Australian coast. The ships that operate to-day are all Australianowned, and mostly they operate under the Australian flag. We are building ships to go into the Australian fleet, and one of the most encouraging features in recent times has been the increasing interest of private shipowners in building in Australian yards. Looking down the list one sees the name of the Adelaide Steamship Company Limited, which appears twice, and of Ampol Petroleum Limited, another Australian company. Shortly, I hope, other Australian companies will be appearing in the list of companies having vessels built in Australian shipyards.

Senator WRIGHT:
Tasmania

.- I wish to ask the Minister whether or not he has had any occasion, since the Australian Coastal Shipping Commission Act was passed in 1956, to invoke the provisions of section 17 of the act. That provision enables the Minister to direct the commission to supply a service in any particular area and, if the service is uneconomic, to reimburse the commission from Commonwealth moneys for any loss incurred in the service.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I direct . to the Minister a question regarding ports and harbours. As the Minister will recognize, shipping is his main concern but very important incidentals to shipowners are the berthing and cargo handling facilities in various ports. There are throughout Australia, at this stage of our development, many port authorities that need help. They are prepared to undertake a good deal of improvement, but they lack the finance to attend to it. Historically, this is primarily a matter for the States, through their marine boards and port authorities, but I put it to the Minister that the Commonwealth has interstate power to interest itself in port and harbour development. Is the Minister able to tell the committee of anything that may be in mind with a view to providing finance for the development of harbour and port facilities or even to guaranteeing loans raised by harbour authorities that are fulfilling very important functions in relation to individual ports?

Senator ARNOLD:
New South Wales

– I should like the Minister, when replying, to inform the Senate as to the future of the floating dock at Newcastle, which from a defence aspect is vital. The dock has been in existence for well over 30 years. I fear that the last survey showed it was rusting away and deteriorating. I see no comparable equipment anywhere else in Australia. It would be a tragedy if that dock were allowed to become unserviceable. I should like the Minister to say whether notice has been taken of that situation and whether it is proposed that anything be done about it.

Senator ORMONDE:
New South Wales

– I support Senator McKenna’s request for Commonwealth help for the States in the provision of port and harbour facilities. I should like the Minister to consider the position of Port Kembla. Although it is in one of our most important steel and coal districts, there is actually no harbour there. There is a demand in Japan for £1,000,000 worth of southern district coking coal annually, but it has not always been possible for that coal to leave because of boisterous weather conditions. I have spoken to the Japanese coal purchasers, who after examining the position at Port Kembla, have expressed doubts about whether the coal industry will be able to supply their needs. The State Government has a plan for a harbour at Port Kembla. Honorable senators laughed one night when I mentioned that it is proposed to build the harbour inland and then put water into it. A bay has to be made. I put it to the Minister that a State government cannot afford such an expenditure. I support my leader’s submission that there should be some way of using federal powers to help the States to provide adequate harbour facilities that are necessary for Australian shipping.

Senator PALTRIDGE:
Western Australia Minister for Shipping and Transport · LP

– Dealing first with Senator Wright’s question, the answer is that there has never yet been an occasion when section 17 has been applied in relation to developmental services. There have been occasions when, for varying periods, the Australian Coastal Shipping Commission has conducted services at a loss. During those periods, talks have occurred between myself and the commission as to the application of section 17, but the commission has always found it possible to treat such, temporary losses as being in the run of the mill of ordinary business. The overall result, as honorable senators know, is that the commission has made a profit during each year of trading.

The ports and harbours question, which was raised by Senator McKenna, and referred to again by Senator Ormonde, is an interesting one. Waterside equipment has a vital effect on the efficacy of shipping generally. I am pleased to say that in recent years there has been an- improvement in waterside equipment, especially at the busiest ports. However; much remains to be done. The Commonwealth has received requests from time to time for assistance in making port improvements. It has considered the requests, but has always taken the view that the responsibility for making such improvements is, and will remain, a State responsibility. The Commonwealth has not reached that conclusion lightly, but only after quite a deep study of the applications which have been made. One important factor in relation to port finance which should not be forgotten is that the port authorities themselves are income earners in their own right. Many of them earn large amounts of money. In some States - not all - that income goes directly into Consolidated Revenue, and the expenditure for the year comes out of Consolidated Revenue by way of a vote. In some States, the amount of money that goes into Consolidated Revenue from this source is much greater than the amount that comes out. That is something about which the port authorities are never too happy. It raises the question whether a State that receives the revenue from ports should, when there is a surplus, redirect some of that surplus money back to the ports.

Work has been going on at Port Kembla for a number of years now. It is not finished. When the weather becomes a bit dirty, it is necessary for ships to clear out of the harbour and stand off outside for a while. When the new harbour is completed - I understand that that will be in two or three years’ time - that difficulty will be overcome. The port is being built with State funds, as is proper and traditional. When completed, the port will be a very good one.

As to the floating dock at Newcastle, about which Senator Arnold asked, I see it on each occasion when I go to Newcastle. I am not unaware of its condition or of its age. During my last one or two visits, the manager of the yard has referred to the need to replace the dock. I have always had it in mind that he has been thinking longingly of some Commonwealth assistance, but he has never got around to asking for it yet.

Proposed vote agreed to.

Miscellaneous Services - Department of Shipping and Transport.

Proposed Vote, £2,898,000.

Senator McKENNA:
Leader of the Opposition · Tasmania

.- Very briefly, 1 should like to ask the Minister for Shipping and Transport to comment upon two items. The first is, “ Tasmanian Shipping Service - Subsidy, £90,000 “. Because the amount is much less than the appropriation for the previous year, I presume it is for “ Taroona “ which has a limited life. Will the Minister please indicate, if he is able to do so, when that subsidy to “ Taroona “ will cease?

The next item in which I am interested is. the subsidy for the shipping service to Papua and New Guinea. That is item 3. Is the Minister able to say what shipping companies are in receipt of that subsidy and whether the inter-island services are eligible for subsidy pursuant to this appropriation? I should also like to know whether the Australian National Line engages in that service.

I should also like to refer to item 5, dealing with the merchant ship construction subsidy. Apart from the fact that fairly substantial tonnages are required for the coastal trade, there are small shipbuilding activities that could be helped if lifeboats, small launches and other vessels of that type were ordered from them. I am thinking in particular of a shipbuilding yard which operates in a small way at Devonport and which the State Government is keen to support. Can the Minister indicate whether these small concerns could receive supplementary work? Could orders be given to them for the building of lifeboats, launches, and other such equipment?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– The greatly reduced amount for the Tasmanian shipping service subsidy arises from the fact that the subsidy for “ Taroona “ will be necessary for only five months on this occasion. The amount has gone down from approximately £200,000 to £90,000.

The £100,000 provided under item 3 tor shipping services to Papua and New Guinea is paid to Burns Philp and Company Limited, which operates three ships in the area. The company has been operating those ships for a number of years. The Australian National Line is not interested, nor has it ever been interested, in that trade.

Senator McKenna:

– Does the subsidy apply to inter-island trade too?

Senator PALTRIDGE:

– It does apply to inter-island trade. With regard to item 5, “ Merchant Ship Construction - Subsidy “, and its relation to small shipyards, the sending of what has been described as supplementary work to these yards raises a very difficult question. For example, lifeboats, which one might think could and should be made in Australia, almost always procured from overseas, even for vessels which are. built in Australia. These lifeboats are made of fiberglass, and they are not as yet manufactured in Australia. I understand that they are not manufactured generally by shipbuilders in other parts of the world, but that that it is a specialized development. A fiberglass boat is far and away the most effective boat obtainable. As to smaller yards - the one at Devonport in particular - attempts are continually being made to give them work which they can do. I am delighted to tell the honorable senator that the yard at Devonport is currently building a ship for the Department of Civil Aviation. It is to go into service at Cocos Island.

Senator COOKE:
Western Australia

– I should like to refer to item 10 - the provision of £155,000 for the winding up of the Australian Shipping Board. Can the Minister give us some idea of the break up of that amount? How is it to be applied? Can he say whether there will be any contra amount, or recovery? In the miscellaneous expenditure the sum of £15,100, is provided for railway standardization. On what section of the system is it expected that money will be expended? Does it refer to standardization in South Australia, or has it any relation to any railway standardizataion scheme for Western Australia?

Senator PEARSON:
South Australia

– I wish to refer to the same matter as that raised by Senator Cooke. The amount shown in the Estimates is £15,100, and I refer to the explanatory notes kindly furnished by the Minister. In them he says that the £15,100 is made available for survey work in the Peterborough division of South Australia. I think that answers Senator Cooke’s question.

I should like to point out that the total amount made available for this survey work was stated officially to be £50,000. In answer to a question asked on 1st September of this year, the Minister informed me that only £4,000 of the £50,000 made available had been spent. I do not think that, at that time, he was certain of the actual amount. I should like to know whether he can now give us some idea as to whether his estimate of £4,000 was accurate or whether some additional amount has been spent.

In relation also to the Peterborough proposal, the Minister promised he would visit South Australia at some time convenient to himself. I should like to know whether he has gone further into the matter and is now able to name the time when he proposes to make that visit. In particular, I should like to know whether the amount made available is £50,000 and how much of it has been spent.

Senator LAUGHT:
South Australia

– I invite the attention of the Minister to the fact that, recently, the Premier of South Australia, in the House of Assembly revealed that he had received from the Minister a report on the whole question of standardization. The Premier stated at that stage that he had not carefully studied the report before answering the Leader of the Opposition, Mr. O’Halloran. I was wondering whether the Minister could find it appropriate now to indicate to the chamber the subject matter of the report because that report does deal with the question of railway standardization and would have some bearing on this £15,100.

My own view is that perhaps £15,100 is rather inadequate for the current year. If, as we all hope, standardization is pushed on with immediately, will other financial provision be made so that this worthy project in South Australia will not be held up through lack of funds?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– The question asked by Senator Cooke related to the winding up of the Australian Shipping Board. The £155,000 outstanding is the amount required for the finalization of the commitments which were undertaken by the board before being taken over by the Australian National Line. The greater part of this amount represents indebtedness to the various insurance clubs for insurance cover. It is expected that they will be paid this year and it will be possible to wind up the affairs of the board completely. It has been a long time outstanding but I understand that the finalization of these accounts, especially insurance accounts which are subject to many adjustments because they are averaged over a period of years, does take a good deal of time.

Senator Pearson:

asked whether I shall be able to go to South Australia. The answer, of course, is “ Yes, just as soon as the Pre mier of South Australia finds it convenient to see me “. Up to this point, I have not gone to South Australia to discuss the matter for the simple reason that I thought it advisable that, before I went, the Premier should have the opportunity to study the very comprehensive report to which Senator Laught referred.

That report, incidentally, covered the request which was made some months ago by the Premier of South Australia as to the aspect of standardization which he required to be put in hand at an early date. The report was prepared by the Commonwealth Railways Commissioner and his staff. It puts forward certain alternative projects to those which have been advanced by South Australia, and, naturally, before I talk to the Premier, I should like him to be in possession of the proposals that have been put forward.

As to the Peterborough project, I point out that last year, South Australia asked for £4,000-

Senator Pearson:

– Asked for £4,000?

Senator PALTRIDGE:

– Yes. An amount of £50,000 was made available. South Australia asked for £4,000 and spent about £3,500.

Senator Pearson:

– Was the £50,000 for the Peterborough division?

Senator PALTRIDGE:

– Yes, but only £4,000 of the £50,000 was asked for last year. There was and still is provision for a total expenditure of £50,000. South Australia asked for only £4,000 of that amount last year, and, having got it, spent only £3,500 of it.

Senator Laught:

– That £50,000 was mentioned in the Prime Minister’s policy speech, was it not?

Senator PALTRIDGE:

– It was mentioned in the policy speech last November.

Senator Laught:

– And only £4,000 was spent?

Senator PALTRIDGE:

– Yes, and the £15,100 which is provided for this year is the expected expenditure, calculated on a pro rata basis, having regard to the expenditure of £3,500 last year.

Senator Pearson:

– So the total for survey work is £65,000?

Senator PALTRIDGE:

– No. The total amount we are prepared to provide for the survey work is £50,000.

Senator Laught:

– And what about the balance?

Senator PALTRIDGE:

– It will come after. It is there and will be made available when South Australia requires it. Based on expenditure by South Australia last year - and we can only work it out on a pro rata basis - that State will want £15,100 this year. It may well be - I am sure that Senator Laught, Senator Pearson and other South Australians hope it is - that instead of spending £15,100, the State will want £46,000. If it does, we shall have to get it out of a supplementary vote later in the year, or something like that.

Senator COOKE:
Western Australia

– I thank the Minister for his answer. I am just as grateful as Senator Pearson and other honorable senators that the Minister was good enough to give us a digest of information concerning the items in the Estimates. However, it has the disadvantage in that much of this information, which would normally be brought out in the course of the debate, does not now find its way into “ Hansard “ for ready reference in future. One may at some future date wish to seek an explanation of some of these items which are a little unusual. If honorable members do not raise them in the course of the debate they will not appear in “ Hansard “.

The Minister’s explanatory notes contain the following remarks: -

Although the Board virtually ceased operating in January, 1957, it remained liable for calls made by the Protection and Indemnity Club although payments from the Club were also expected in respect of claims made on it. The finalization by the Club of all transactions concerning any year are normally long delayed as in many instances Court cases are involved, and consequently final contributions by participating shipowners cannot be determined until these matters have been settled.

As operations ceased in 1957, I ask the Minister whether the amount of £150,000 relates to a moral obligation, or to an actual obligation under the co-operative insurance pool. What items and claims were we expecting that prompted us to continue? Were there any outstanding matters in respect of which we had to contribute further? Were there any court cases in which Australia was involved, so far as this mutual shipping protection society was concerned?

Referring to Division No. 640, item 11, “Railway Standardization, £15,100”, I realized, of course, that no State other than South Australia could be receiving this extraordinary sum for survey work. Western Australia has for some time been endeavouring to enlist the co-operation of the Commonwealth in such work. I did not know that one State was more effective than another in getting the Commonwealth to interest itself in the establishment of a uniform, broad gauge throughout Australia. Western Australia has suffered a severe loss of trade through the absence of such a gauge. I do not challenge the right of the Commonwealth Railways to pick-a-back road transport across the desert. That is very economical for transport operators and probably very lucrative for the Commonwealth Railways. So far as the Western Australian railways are concerned, freight comes over quickly and efficiently. It is off-loaded at Kalgoorlie, and then goes on.

Although the Minister did say the other day, in reply to a question, that negotiations were proceeding, nothing very definite has been done to establish a uniform gauge in our State - one thing that might relieve some of our rail transport losses. Does the Minister envisage that, within the next twelve months, the expenditure on survey work will be extended a little so as to give more appropriate and equable treatment to Western Australia - making possible preliminary surveys and the like? I would be very disappointed if the Minister envisaged no such expenditure in the next twelve months.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– The amount of £155,000 which was set aside for the winding up of the Australian Shipping Board was an actual legal commitment, which has now been settled. It was incurred while the board was operating these ships. I am not aware that this settlement awaited the outcome of legal action by any one, but the length of time which intervened resulted from the way in which these marine insurance clubs operate. The members of the clubs - ex post facto is, I think, the expression - either enjoy, or are required to meet, a variation in the premium arising from the experience of the fund over the previous period. If there are no claims on the fund it might declare a dividend. If there are claims it might be necessary to call on members for further contributions. Procedure of that kind has contributed to the rather long delay in settlement.

Senator Cooke:

– Were these liabilities incurred before 1957?

Senator PALTRIDGE:

– Yes. They all resulted from operations prior to 1957. There is no .provision for survey work on the Western Australian railways although, as 1 informed the .honorable senator in answer to a question the other day, discussions are continuing between myself and the Western Australian Minister for Transport. Those discussions have not yet advanced to the point where he would feel disposed to ask for - or I would settle on - any specific provision for survey work.

Senator COOKE:
Western Australia

– I should like to pursue a little .further this .matter of survey work in Western Australia. I appreciate the Minister’s statement that nothing is provided for it on the ‘Estimates, and that discussions with Western Australia have not yet reached an advanced stage. However, -I should like to know how sl payment of £50,000 was allocated for South Australia. Was it -the result of a promise to .spend a sum of that -order that was made in a policy speech to the South Australian people during the last election campaign? Was it the result of negotiations between the South Australian Government and the Commonwealth Government in relation to the establishment of a Commonwealth-wide broad gauge railway? At what .point -is -the survey to commence, and on what conditions will it be undertaken? Is it “to be based on mileage? Was rit the result of a mutual agreement between South Australia and the Commonwealth Government? Did the Commonwealth Government say, “ So many miles of railway will be surveyed. We will allow you so much for the survey work “? How was the amount of £50,000 arrived at? If, in Western Australia, we have 600 miles of railway to survey, will the basis of payment be altered because there it is a larger job?

Senator PALTRIDGE:
Minister for .Shipping and Transport · Western Australia · LP

– The -sum <of £50,000 to be made available to South Australia was assessed as being the cost of .surveying .of a certain section of the South Australian railway system. The Premier of that State had put it to the Commonwealth Government eighteen months or two years ago as a standardization proposition. The survey proposal included the north-eastern division of the South Australian system, and another line as well. When we reach the point with Western Australia concerning the amount required for a survey we will have a look at the length of line between Kalgoorlie and Fremantle, as well as other sections that require standardization ;or some form of modification, and work out an assessment on ‘the cost .of that .particular survey and then allocate an amount to meet it.

Proposed vote agreed to.

Proposed vote - Construction of Jetty for Handling of Explosives, £690,000 - agreed to.

Commonwealth Railways.

Proposed Vote, £3;983,000

Senator COOKE:
Western Australia

– As -is well-known to honorable senators, the Trans-Australian Railway is a very important .link between Western Australia and the -eastern States. Consequently, the economic working of this line is a matter of considerable interest to the people of Western Australia. -Having had some experience myself in the accounts and statistical section of the railways, I think that freight charges should be determined in a manner to cause the least possible loss to the railways. .Fortunately, the Commonwealth Railways (have operated very efficiently. About a week or .so .ago I raised in this chamber the -question .of a little over £750;000 which, according ;to the report of the Commonwealth Railways Commissioner is held -in suspense as a result .of a concession that was .-given ,to South Australia in -relation to the haulage of coal from Leigh Creek. -I understand ‘that this amount of £767,238 was determined by the Railways Commissioner after consultation with the Premier of South Australia, Sir Thomas Playford. It represents the difference between freight computed at ordinary rates and that paid by the South Australian 1 Government under a concession agreed to by the ‘Commonwealth Government. While it may be said that the Commonwealth Railways are a profitable concern and well able to absorb a figure of this size under working expenses, I think that it would be unfair for this figure to be shown against operating costs. It should be left to the Commonwealth Railways to determine fair and reasonable freight rates for all users of its services. Western Australia is one of the Commonwealth Railways’ biggest customers in relation to the carriage of goods both to and from the State. If freight and fare charges generally were increased because of concessions granted to South Australia as a result of political considerations, this would not be fair to other users of the Commonwealth Railway services who pay freight computed on the cost of the service.

There is another aspect of this matter. The Trans-Australian Railway is a very popular line. It is not possible for people to obtain reservations at short notice for travel on this line, which is a healthy position. Nevertheless, I think that additional up-to-date rollingstock should be obtained for the service. The coaches now in use on this railway were obtained from Germany. At the time they were ordered, doubts were expressed as to whether Germany could supply coaches suitable for use on this line. As we know, they have created a very favorable impression. I should like the Minister for Shipping and Transport to tell me whether, when replacement rollingstock is required, it could be constructed in Australia by our own craftsmen. If it is not possible to manufacture replacement rolling stock in Australia, I should like to receive the Minister’s assurance that replacement rolling stock obtained from overseas will not be inferior in quality to the rolling stock at present in use. If the replacement of supplementary rolling stock cannot be built in Australia, will the manufacturers of the rolling stock now in use, which has been so highly commended, be afforded an opportunity to fulfil further orders? Where does the Minister expect that the new rolling-stock, involving a big expenditure, is likely to be obtained?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– Sir, in respect of Senator Cooke’s query about the Leigh Creek coal freight rate, and the amount that is held in suspense, I know very well that he understands the position. The honorable senator knows that that amount is held in suspense pending settlement between the Commonwealth Railways and the Treasury as to what rate shall actually be credited to the Commonwealth Railways in its final accounts All I can say about the matter at this time is that I have listened attentively - as I always do - to the views that have been expressed by Senator Cooke. If I may say so, I discerned the interest of an old railways man in the Commonwealth Railways, and I am sure that the Railways Commissioner will be delighted to know that he has at least one supporter in this chamber.

As to the other matter that was raised by Senator Cooke, I inform him that tenders for rolling stock have been called on a world-wide basis to the specification of the existing German-built cars. This means, of course, that both the German firm and all Australian firms which care to tender may tender. As a matter of fact, tenders have closed and the tenders received are now under examination. I am not in a position to indicate where the tender will be awarded.

Senator CANT:
Western Australia

– I should like to direct the attention of the Minister to the following statement in the report of the Railways Commissioner, under the heading “Pick-a-Back Services “: -

The traffic of the Trans-Australian Railway consists mainly of general goods, loaded on semitrailers from and to all States and, as indicated elsewhere, additional flat wagons have been ordered for its conveyance. The availability of the Pick-a-back service has provided a valuable counter to road competition for interstate traffic, which, since pick-a-back carriage was begun, has fallen away considerably.

It is subsequently stated in the report -

Nevertheless, substantial tonnages are still conveyed by road, which the railways could handle efficiently, speedily and at favorable rates. It is anticipated, however, that the continued success of the pick-a-back system will divert increasing quantities of freight from road to rail in the current year.

What I want to know is, how much longer will the Commonwealth Government allow the Commonwealth Railways to operate to the detriment of Western Australian roads and railways. In consequence of rollingstock being constructed for the express purpose of assisting interstate hauliers, freight traffic to the Western Australian railways is lost from the Fremantle to Kalgoorlie section of the line. Semi-trailers from the eastern States are off-loaded from the Commonwealth Railways at Kalgoorlie and place a heavy burden on the road system between Kalgoorlie and Perth and Fremantle, thus increasing maintenance costs of those roads. Can the Minister give me some idea of the cost involved in the transhipment of goods at both ends of the Trans-Australian line? Does he consider that it is an economic proposition to continue the present practice in relation to pick-a-back traffic and refrain from forging ahead with the extension of the standardgauge railway from Kalgoorlie to Fremantle? I also draw attention to the commissioner’s remarks on page 32 of his report, where he says -

There is still a number of employees at Port Augusta waiting for housing accommodation, whilst other families are housed in temporary accommodation, i.e. 2-roomed quarters and double tenthouses, which cannot be regarded as other than sub-standard. The construction of twelve (12) additional residences is necessary, and subject to funds being available it is proposed to call tenders for six (6) to be erected during the current year.

I do not know whether there is any provision in the estimates for the construction of the six houses requested by the Commissioner, but I should think that it would not be a great burden on the revenue for the Commonwealth Railways, or some other department, to construct the twelve houses required to accommodate the workers there. I hope the Minister will be able to give a satisfactory reply to this request.

I am rather concerned at the continued delay in providing a standard gauge railway to the West Australian terminus at Perth. We Western Australians may be somewhat parochial in our outlook, but we notice that although large sums of money are being expended in Victoria and New South Wales on standard gauge railways and also in South Australia, there is no provision, according to the Minister, for even a survey to be undertaken in Western Australia.

We should like to know what is being done in Western Australia, particularly when we notice in the report that during the past six years the tonnage hauled by the TransAustralia Railway has increased from 31,794 tons to 132,051 tons. In the main, that increase has been brought about by assistance given to road hauliers, whom we cannot tax because of the provision of section 92 of the Constitution. The Commonwealth Government is assisting them, to the detriment of the railways and roads of Western Australia.

On page 31 of the notes that the Minister was good enough to supply to honorable senators concerning the work of his department, I notice the statement that the rollingstock in use on the Trans-Australian Railway has been improved in recent years to a high standard. On page 30 the notes state that the balance of the increase covers anticipated increases in the cost of stores and material, and increased maintenance costs, particularly in connexion with rollingstock. There seems to be some doubt as to the Minister’s meaning when he speaks of increased costs. I shall be pleased if the Minister can supply an answer to these questions.

Senator LAUGHT:
South Australia

– I desire to offer some comments on the Commonwealth railways, particularly the Trans-Australian Railway, and to offer my praise to the Minister for Shipping and Transport and his department for the part that the Commonwealth railways are playing in the development of South Australia. I refer particularly to the town of Port Augusta, the head-quarters of the Commonwealth railways. I find that the life of Port Augusta has increased in tempo because of the imaginative developmental extension of the Commonwealth railways. The line from Leigh Creek to Port Augusta carries one of the most important commodities transported by rail in South Australia, namely, the coal required for the generators at Port Augusta, which supply a large part of the industrial power used in that State. I shall be glad also to see the housing position at Port Augusta improved, as has been suggested earlier in this debate. I pay a tribute to the wonderful esprit de corps of the Commonwealth railways service that I have noticed at Port Augusta. I never visit that town without calling at the railway workshops and meeting the people there, and seeing for myself the development that is going on in the construction of railway carriages and rolling stock.

I now ask the Minister whether there are any plans for the survey of a line linking Port Augusta with Whyalla. As honorable senators know, Whyalla is destined to be a very important place. A big steel works has been planned for erection there, and I understand that the Broken Hill Proprietary Company Limited proposes to expend about £40,000,000 at Whyalla in the next five or six years. I, for one, would like to see the Commonwealth railways, or the State railways linked with the Commonwealth railways, playing an important pact in the development of that vast. steeL empire, envisaged at Whyalla. Therefore, I ask the Minister whether any tangible development in the planning of a railway has taken place. Will he let me know whether it is contemplated that the Commonwealth will construct a railway linking Whyalla with Port Augusta - that being the logical point where the spur line would meet the main line - or whether it is proposed- that the State will’ construct the railway? Obviously, the important question in connexion with such a railway is: “ What will be its gauge? “ I assume that, if constructed, it would be a railway of standard gauge.

I should also like some information regarding the section of the railway between Woomera and Port Pirie. There has been some criticism in South Australia that the railway running south from Woomera is not carrying all the freight that it should carry. As honorable senators know, the Department of Supply, the Department of Works and various service departments need to transport vast tonnages to service important works at Woomera. I recollect that- last year the Commissioner in- his report referred to some disagreement between his department and the Department of Supply and other Commonwealth departments. The point at issue was whether they should make more freight available to the Commonwealth railways. This matter has received some prominencein the South Australian press. One person is reported to have counted the number of motor trucks passing to and from Woomera and coming over the bridge at Port Augusta. His complaint was that a considerable part of the tonnage carried by those vehicles should have been carried by rail. The Commissioner made a similar reference in his report. I wondered whether the Minister has had an opportunity to discuss with his colleagues who- are in charge of those departments whether more freight could be carried on that section of the Commonwealth railways than is the case now. Of course, people in South Australialiving on the route between Port Augusta and Adelaide are prone to comment on the number of Commonwealth trucks passing backward and forward along the winding sections-, of that” road, and causing con..gestion. This is a matter to which the Minister could give further attention - I know that he has. given it. a good deal of attention in the past - with a view to seeing whether or not more departmental freight could be carried on the railways.

At times, the Commonwealth railways come- in for criticism. I invite the attention of the Minister to a letter which appeared’ in yesterday’s Adelaide “Advertiser “, in which a Mr. J. R. Lillecrapp, of Eden Valley, referred to a recent trip he made to Woomera. The letter states -

On the return trip, after picking up the passengers at Woomera, we were confronted with the new passengers pulling out bottles of beer and whisky. Many of them vomited- in the- carriage. Why are such notices as “ Intoxicating drink not to be had on train “ put in- the trains if the rule is not adhered- to?’ Women1 have to- put up with this- disgraceful, behaviour. Is it any- wonder people don’t travel by train?

I have read that letter as. an illustration of the unfortunate things that can. happen. Earlier to-day, reference was made in this chamber to the question of excessive drink and misbehaviour on the new passenger ferry to Tasmania. I think that it is proper to direct- the attention of the Minister to these matters, and I am sure that adequate safeguards will be provided. In- my experience of these trains, nothing indecorous ever occurs, but apparently there- is one person in South Australia who has seen fit to complain to the press. By and large, Sir, I think that the Commonwealth railways render excellent service.

Senator ARMSTRONG:
New South, Wales

– I had not intended to speak on this matter until the Minister suggested that in Senator Cooke the Commonwealth railways had at least one friend. In case there is misunderstanding, I wish to line up with Senator Cooke and say that there are at least two friends of the Commonwealth Railways in the Opposition. I think, that the Commonwealth railways have done an outstanding job. Great praise must be given to the commissioner, Mr. Hannaberry. In the early stage of the transition to the modern and efficient service- that- we see- tc-day, important decisions had- to be made- by the commissioner. I think that the Commonwealth railways were the. first railways to introduce diesel locomotives on a big scale. Not content with that, the commissioner set about modernizing the rolling stock to such’ effect that the transcontinental railway now compares with any railway in the world. Not only has the commissioner made, the trains look pretty; he has also made them make profits. The combination of those two things is very important.

I believe that the latest report of the commissioner indicates that the Northern Territory section of the line also is now in a profit-making position. It must be a great consolation to Ministers to have business organization such as this, because it means that there are government instrumentalities which give them no cause for worry, which are well run, make substantial profits, and about which there are very few complaints. Of course, complaints such as that to which Senator Laught has referred are always likely to occur.

Senator Sheehan:

– They are the exception to the rule.

Senator ARMSTRONG:

– I should say so. What happened, probably, was that people who boarded the train at Woomera opened a few bottles. After all, I suppose that leaving Woomera is great cause for celebration for people who have been there for some time, in a restricted area which has special problems associated with it. I hope that the explanation that I have given for this complaint, which of course was justified, is the true one.

It is not easy to make big decisions such as those made by the Commonwealth Railways Commissioner seven or eight years ago, when the railways were transformed into a very profitable organization. When one has the opportunity publicly to place on record appreciation of the work done by the commissioner in that regard, I think he should take the opportunity to do so, and that is exactly what I have done.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– May I first refer to the remarks of Senator Cant. Provision is made in this year’s Estimates for the construction of six houses at Port Augusta. The honorable senator referred to the situation which arises in Western Australia because the Commonwealth Railways pick-a-back road trucks overland; they are detrained at Kalgoorlie and use the Western Australian road to Perth, thereby causing wear and tear on it without making adequate compensation by payment of road’ tax. That is recognized as a problem, as the honorable senator well knows. Difficulties of that kind, and variants of such difficulties, are suffered by all States of Australia. As the honorable senator must recognize, the Western Australian Government Railways would not carry those trucks, whether they were carried” pick-a-back by the Commonwealth Railways to Kalgoorlie or whether they came by road. In point of fact, if he looks at the proposition from one angle he will see that it results in a saving on the Western Australian section of the road, from the border to Kalgoorlie, by virtue of the fact that trucks are carried pick-a-back over that section.

The honorable senator also referred to the apparent slowness in reaching an agreement with the Western Australian Government in connexion with standardization of gauges. I do not wish to appear off-hand, but Government policy in respect of standardization has been stated so often that I do not propose to waste the time of honorable senators in repeating it. The fact is that we have laid down a policy on standardization and have made quite clear the circumstances under which standardization works will be undertaken, and the priorities to be accorded them. Notwithstanding that particular aspect of the matter, the fact is that the Western Australian Government has not made any specific approach to the Commonwealth Government, and until a specific approach is made it is premature to speak of the amount of money that may be provided for a survey, for construction, or for anything else. The position was the same under the previous Government of Western Australia. Although the former Premier, Mr. Hawke, made a couple of political passes at the Commonwealth Government, and at me in particular, it was an open secret in Western Australia, and remains an open secret, that there was an unholy division in his own Cabinet on the question of standardization, with his own Minister for Railways taking a different view from the one which- he, for political purposes, espoused when he thought he could embarrass me on that matter.

Senator Cant also referred to the fact that the commissioner, on one page of his report, referred to rolling stock in firstclass condition and on the next page to the mounting costs of maintenance. Senator Cant suggested that there appeared to be some contradiction there. There is no contradiction at all. I am sure that Senator Cooke, who has technical knowledge about these matters, will agree that the rolling stock is first class, but naturally enough, as it gets older it requires more maintenance. That we are spending more in maintenance this year than we spent last year merely reflects the fact that as the rolling stock gets older it requires more maintenance. As my colleague, Senator Kendall, reminds me, wages involved in maintenance also are advancing year by year.

Senator Laught:

asked about the Port Augusta to Whyalla railway. I think he was a bit in front of the game there. It is true that about a year or so ago the South Australian Premier suggested that the Commonwealth might come to the party, but our investigations showed that the work to be undertaken by the Broken Hill Proprietary Company Limited at Whyalla had not reached a stage that warranted the construction of that line, nor was it foreseeable that the line would be warranted within the next few years. Therefore, as for expenditure on surveys, as to ownership of the line and operations, I merely ask the honorable senator to possess himself in patience. I shall direct the attention of the commissioner to the incident on the Woomera train to which the honorable senator referred.

The honorable senator pointedly referred to the commissioner’s comments on road traffic conducted by other departments between Port Pirie and Woomera. As Senator Armstrong has suggested, I as the responsible Minister draw some comfort from the fact that I have such an astute, hardworking, industrious and enterprising commissioner as Mr. Hannaberry. He certainly does not let too many things get through his grasp. When it appears to him that he is losing some traffic, he naturally chases it up. But the Department of Supply and other departments which are concerned explain that in a number of cases the freight transported to Woomera consists of delicate instruments which require careful packing and handling, and are conveyed in vehicles especially designed for their carriage. I am interested, as is the commissioner, to see that carriage by road is limited to that type of freight.

Senator Laught:

– But beer and food have been carried by road.

Senator PALTRIDGE:

– I know that. I had a most entertaining argument with the Army authorities about that, but their point of view was that they were justified in carrying beer to Woomera in that way because they had refrigerated trucks.

Proposed vote agreed to.

Department of Air.

Proposed Vote, £60,161,000.

Senator O’BYRNE:
Tasmania

.- Although the Royal Australian Air Force is one of the very important sections of the defence forces of this country, the people of Australia have not received very much inspiration from the Government’s policy on it in the past few years. We have seen quite a number of alterations in the techniques of air defence. Tremendous steps have been made in the use of guided missiles, and we feel that sufficient progress has been made to keep abreast of world developments in that field. The Australian people realize that the Avon Sabre, our present fighter equipment, is obsolete. Although it has proved itself in the past year in Malaya to be suitable under certain conditions, it is well known that it is outdated. This aircraft had its use in a certain stage of development but it is now in the also-ran class.

A tremendous struggle is proceeding amongst various aircraft-producing organizations for the supply of aircraft to the Air Force, and I hope that a decision will be made soon. During the past five years, missions have travelled overseas to inspect aircraft in various countries, and it would appear that our experts reached the point of trying to decide between the Lockheed F104G Starfighter, which holds the world speed record at twice the speed of sound, and has been in service with the United States Air Force for long enough for many modifications to be incorporated, and the Northrop N156F fighter. Tremendous difficulty must be experienced in making these decisions because of the enormous expense involved in the purchase of the aircraft and their ancillary equipment. Last year for the Department of Air there was an appropriation of £62,000,000, of which £59,000,000 was expended. It is proposed that £60,000,000 be provided this year.

The Royal Australian Air Force exists, first, as a potential defence to meet any occasion that might arise. A very high morale should exist amongst the personnel. Pilots should have confidence in their frontline aircraft and their high morale should permeate the service. The inequality of performance of combat aircraft of Australia and the United States, or, for that matter, Great Britain, should be watched very closely indeed by the Government. I feel that the Government and the Air Force have been landed also with a rather uptodate squadron of Hercules aircraft. We had the opportunity of a flight in the first of these aircraft to come to Canberra. I quite agree that the Hercules is modern, but it has been selected as a transport aircraft. The standard of the rest of the Air Force is nowhere near the level that would justify the expenditure of £15,000,000 on this squadron of transport aircraft. I consider that the Government made a mistake in not giving priority to securing first-rate front-line aircraft, leaving the purchase of this squadron of Hercules transport aircraft to some later date.

The point I want to make is that unless a decision is made to equip even only one squadron with really modern front-line fighter aircraft, the people of Australia will feel that we are falling behind other nations. The Royal Australian Air Force has never been so far behind in the standard of its front-line aircraft. Although the Sabre is able to carry a modern air-to-air missile, it has only half the speed of the front-line aircraft of other air forces. In order to maintain the high morale of the Royal Australian Air Force and the support it has always received from the Australian public, the Government should make a decision to equip it with the very best quality, high-speed aircraft that is available anywhere in the world.

The other matter I wish to mention is the importance of continuity in the activities of the Commonwealth Aircraft Corporation. On a previous occasion we allowed our aircraft industry to decline to the stage at which trained and skilled personnel drifted away from it. They were absorbed by other branches of industry, and later, in an emergency, a re-organization of the aircraft industry had to be made in a hurry. I consider that it is the responsibility of the Government so to direct the policy of the Royal Australian Air Force that the future of the Commonwealth Aircraft Corporation will be assured. The employees should have continuity of employment and the technicians should be kept abreast, so far as is possible, of the very latest developments in aircraft.

Defence expenditure is being made the subject of a great challenge now. One can well understand the quandary in which countries throughout the world are placed. There are two approaches to this question. One is to prepare for press-button warfare and to produce the latest thermo-nuclear intercontinental guided missiles. I believe that is the negative approach. The other is to accept the challenge to participate in international disarmament. The Government must make up its mind what to do. Of course, we must play safe to a certain extent. If we are going to spend money on the purchase of aircraft for the Air Force - which is our front line of defence - we must make certain that we purchase aircraft of the very highest quality. I should like to hear very soon that a decision has been made to secure front-line fighter aircraft for the Royal Australian Air Force.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Senator O’Byrne referred to the difficulty of making decisions as to the type of aircraft that should be used to re-equip the Royal Australian Air Force. That is probably the lesser of two difficulties. The second difficulty, having made a decision, is to carry it out. In relation to the Air Force, in particular, we have had many decisions but very little performance. I would devote myself at some length to this subject but for the fact that the Prime Minister (Mr. Menzies) has announced that in November a complete statement will be made - I take it to the Parliament - on the future of the various arms of our defence forces - the Air Force, the Navy and the Army. If I am correct in my belief that a statement will be made to the Parliament, and that the Parliament will be given a reasonable opportunity to

Rebate that statement, I need not go to any great length this evening in talking about the Air Force. However, I would certainly like an assurance from the Minister in relation to this matter, which has been reported in the press quite recently. I am looking at a statement which appeared in the press of 14th October, in which the Prime Minister is reported as having said at a press conference that he intended to make a statement some time in November. I ask the Minister specifically whether such a statement will be made in the Parliament, and whether the Parliament will have an opportunity of debating it. 1 think there is no sorrier record of this Government than its record in defence, particularly in relation to the Air Force. I remind the committee that, in April, 1957, the Prime Minister made a statement in which he indicated that the Air Force needed to be re-equipped with both fighter and transport aircraft. Two months later, he sent Sir Philip McBr.ide to America to purchase, and to make arrangements for its manufacture in Australia, the Lockheed Starfighter FI 04, to which Senator O’Byrne has referred. Two decisions were made in April. One was that we were to pattern our Air Force fighter component on the American Lockheed Starfighter F104, and the other was that the machine was to be made in this country. Those two pronouncements were made on behalf of the Government in April.

After Sir Philip McBride had visited America in pursuance of those decisions, the Prime Minister announced that we would not have Lockheed Starfighters. It was stated that they were supersonic aircraft and that they were not the kind of aircraft that we required. It was stated that we required an all-purpose fighter, and that, in any event, the Lockheed Starfighters required far too much electronic equipment on the ground to service them and enable them to function in this country. The decision made by this Government in April, 1957, was thrown overboard in the following September. In fact, the decision to jettison that decision was made in July, when Sir Philip McBride returned from America. Since that time, no decision has been made to base our fighter force on

American machines. It is true that we have got Hercules freighters, to which Senator O’Byrne made reference just now. They are excellent machines, and it is desirable that we, in the south Pacific area, should use American-type equipment. I hope that when the Prime Minister makes the next announcement in relation to defence, ‘he will have regard to the realities of the situation and will not make the blundering mess that was made in relation to the Starfighter. It is a machine that was known from 1951. Missions from this country, at the ministerial and departmental levels, went round the world to select a new fighter. Apparently they learned nothing by it. A decision was made in April, 1957, and in July, 1957 it was countermanded. I repeat that the Opposition is frankly frightened at the inefficiency that lies behind that type of approach. It is not as though it related to that Air Force matter alone; this defect - a similar type of announcement made at the one time and the same lack of performance - runs right through the three Services. I do hope that when we get this new and latest pronouncement -on behalf of the Government by the Prime Minister we shall avoid bungling and lack of vision. J hope that we shall get some action and that our Air Force will be equipped with what is appropriate to the realities of our situation and the defence of this country.

Looking at the Estimates, I note two matters to which I should like to refer. The first relates to the provision of £80,000 for the Citizen Air Force. It is to be found in Division No. 531. This is quite obviously a force of no great strength if we are to judge by the amount proposed, and, on the face of it, it would seem very little encouragement is being given to our parttime airmen to interest themselves in the Royal Australian Air Force. I should like to know what the Minister can tell the Committee with regard to that expenditure. To what is it directed, and how far does it go in recruiting and training our Citizen Air Force?

I should be grateful if the Minister could give .the Committee some information as to how the £130,000 provided in item 10 of Division No. 533 for training of personnel at other than Royal Australian Air Force establishments is spent. ]’ note that the first item in Division No. 536 relates to an expenditure of £7,683,000 for’ aircraft ancillary and other technical stores. I presume that is all- for stores, lt is not expressed clearly, but I take it that it relates merely to stores and not aircraft because, on referring- to Division No. 542, 1 see that £9,230,000 is to be appropriated for aircraft and associated initial equipment - purchase and manufacture. Could the Minister say to what particular type of aircraft that £9,230,000 is to be directed, how much is to be spent on purchases from overseas, what types of aircraft are to be purchased and how much is expected will be spent on aircraft manufactured in Australia?

I agree entirely with what Senator O’Byrne said in connexion, with aircraft production in this country. The failure of the Government to make up its mind upon the type that we were to use for our defences led to the loss of trained staff and personnel in large numbers from a factory in Victoria. I recall the many statements by Sir Lawrence Wackett, the head of the aircraft corporation in which, time after time, he demanded some indication from the Government as to what type of machine was to be put on the production lines. The most extraordinary thing was that he indicated publicly that the time had gone by years ago for the announcement of the new type that the factory was to engage in manufacturing. Of course, all that has happened is that we have gone on manufacturing a modified or a qualified Avon Sabre. We have kept the production line moving on that. And it is quite obvious that the Prime Minister’s statement in April, 1957 - that we needed to completely re-equip our fighters - is still true; and we are only another two years behind! I hope that the Minister will comment upon the -four specific matters in the Estimates themselves to which I have referred, and, if he is able to give me the assurance that we shall have the opportunity to debate defence in general in the Parliament, I need not pursue my criticism of the political management of the Air Force any further.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– As to whether a defence statement will be debated in November, I regret that

I am not able to say “Yes” specifically, but, having regard to what has always happened in the past, I have no doubt that it will be debated in the Parliament. Whether it will be next month, or when we resume next year, I do not know, I do not know precisely when the statement is to be made, but I have no doubt that the usual practice will be followed and that a full opportunity tb debate the statement will be given. Of course, I am speaking now only in point of time. I should think that if the statement is made in time for us to debate it next month then certainly an opportunity will be given to debate it. I regret that I cannot stand here to-night and say definitely, “ Yes, it will be in November “.

Senator McKenna:

– f am thinking about the statement of the Prime Minister (Mr. Menzies). I was concerned to have it made in the Parliament.

Senator PALTRIDGE:

– If the statement is made in November before the Parliament rises, I cannot imagine that it will be made anywhere else but in the Parliament and by the Minister for Defence (Mr. Townley).

The Leader of the Opposition referred to item 10 in Division No. 533, relating to the expenditure of £130,000 on the training of personnel other than at Royal Australian Air Force establishments. Of that amount, £80,000 will be spent on overseas courses, £20,000 on technical college and university courses, and £20,000 on aero clubs flying training.

The next matters referred to by Senator McKenna related to item 1 in Division No. 536 - “ Aircraft ancillary and other technical stores, £7,683,000 “ and the provision of £9,230,000 in Division No. 542 for aircraft and associated additional equipment - purchase and manufacture. We propose to spend £2,111,000 on local manufacture. The expenditure on overseas procurement is expected to be £5,584,000 while the proposed expenditure on locally manufactured modification is £9,500,000 and on overseas procured modifications £5,590,000.

Senator McKenna:

– Could we know what type of aircraft is being purchased?

Senator PALTRIDGE__ Yes. The locally manufactured plane is the Sabre Fighter and the- overseas procurements will be Hercules and Neptunes.

Next the honorable senators referred to Division No. 531 relating to the proposed vote of £80,000 for Citizen Air Force. Provision is made for approximately 246 personnel to train for 45 days this year. The expenditure may be broken up as follows: - For the Citizen Air Force, £40,000; for active reservists, £5,000; for part-time A.T.C. instructors, £25,000; and for university air cadets, £10,000 - £80,000 in all.

The only other comment that I want to make is in respect of the Government’s activity in the procurement of aircraft. It has been said that a year or two ago a blunder was made. Without in any way trying to transfer the responsibility of government, it should be pointed out that in matters of this nature the Government invariably acts upon, and must take notice of, its own military advisers. Whatever has happened has happened because the Government has taken that advice.

The other point worth mentioning is that the Sabre, which has been described as outdated and outmoded, can, now that it has been equipped with the Sidewinder missile, be regarded as a front-line aircraft. In recent tests the Sidewinder has proved very effective indeed.

The Hercules, as has been acknowledged, is the most modern aircraft in the world. I paid particular attention to Senator O’Byrne’s assertion that to purchase transport aircraft before fighter aircraft was an odd way of going about things. My only comment is that the Hercules were procured because they were available, and, in the opinion of the service chiefs, best suited to our needs. The advice of the service chiefs in connexion with the procurement of fighters will be taken and will be announced as soon as that is possible.

Senator TANGNEY:
Western Australia

– I wish to refer to Division No. 543 - Department of Air - Defence Research and Development. Last year £20,000 was voted for this purpose, but only £13,500 was spent. This year the very modest sum of £10,000 is to be voted. In these days of greater scientific experimentation one would think that more would be required.

I should also like to refer to Division No. 533 - General Services - item 8, which reads “ Compensation for personal injury and damage to property, £5,000”. Last year this expenditure was apparently allowed for in the compensation payable under the Commonwealth Employees’ Compensation Act. One would think that the operations of such a large and mobile force would involve the payment of more than £5,000 for injury to other persons or to their property. If not, the Air Force is to be congratulated upon its efficiency.

Senator WILLESEE:
Western Australia

– I wish to refer to Division No. 534 - Department of Air - Squadrons Overseas - Maintenance (Other than pay of personnel). I notice that the proposed vote is £491,000 less than the actual expenditure for 1958-59. Could the Minister explain that? I understand that one squadron came out of Malaya, but was to be replaced, or had been. I wonder if the Minister could indicate where this money is being spent - other than in Malaya. Is there an explanation of the reduced amount?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The vote of £10,000 for defence research and development is based on the current programme of research proposals to be submitted in the air section of the 1959-60 research and development programme, as well as expenditure against current proposals. Details of some of the authorizations are - aeronautical, £1,000; personnel, £9,820; mathematical and general, £2,000; and miscellaneous minor proposals, £2,000. The total vote is £17,320, less an amount estimated to remain unexpended at the end of the year of £7,320, making a net vote of £10,000 for the year.

Senator McKenna:

– We shall not find out very much by expending that sum.

Senator PALTRIDGE:

– For the information of honorable senators, the projects include high speed flight research, research into liquid incendiary fuel, and infra-red training aids. Under the heading “ Personnel “ there will be expenditure on a laboratory for the physiology of low barometric pressure, and upon psychological aspects of servicing supervision. There will also be research into methods of personnel selections for courses; into the air defence of Australia - radar data transmission system; and also into operational gains.

Senator Tangney:

– Your scientists must be underpaid!

Senator PALTRIDGE:

– Further provision for research is made in the proposed vote for the Department of Supply. The reduction in the vote for squadrons overseas arises from a lower expenditure this year on new works at Butterworth, in Malaya.

Proposed vote agreed to.

Department of Supply.

Proposed Vote, £20,986,000.

Senator ARMSTRONG:
New South Wales

– Mr. Chairman, I should like to say a few words concerning the Department of Supply, which is gradually reverting to the form in which it existed - and which should never have been disturbed - when this Government came into office in 1949. At that time, the Government inherited a department that was known as the Department of Supply and Development. It proceeded to break up that department into segments known as the Department of Supply, the Department of National Development, and the Department of Defence Production. First of all, a section of the old Department of Supply and Development became the Department of National Development. Then what I think happened was that the then right honorable member for Wentworth in the House of Representatives, Sir Eric Harrison, returned to Australia from London where he had spent twelve months as Resident Minister. At that stage, the Government had difficulty in finding a ministerial post for him. So the poor old department was again looked at and another segment was taken from it and called the Department of Defence Production. Sir Eric was given this portfolio to look after to help him to fill in his time. Fairly recently, the Department of Defence Production was abolished and the administration of its functions reverted to the Department of Supply. That is a good thing but in my opinion these functions were more effectively administered by the old Department of Supply and Development which, interestingly enough, was based on a project that was propounded in 1939 by Mr. Casey when Australia was preparing for war.

I should like to ask the Minister for Shipping and Transport (Senator Paltridge) a number of questions concerning this extensive department. First, I refer to Division No. 563a. - Design and Inspection Branch. Apparently the proposed vote for this division has been passed to the Department of the Army, but I am unable to locate a reference to it under the proposed vote for the Department of the Army, and I should be glad if the Minister would give me some details of the projected expenditure on this branch. Last year, the appropriation was some £500,000, of which only £331,724 was expended. Of course, design and inspection is fundamental to development. It is perhaps the most difficult part of the work because it starts from scratch. I am informed that without a design branch there cannot be a competent production and development unit. Even during Labour’s regime the bad habit existed of getting aircraft and other armaments from overseas and altering them. That, of course, is a very expensive matter. I notice that this practice still obtains. Apparently this is an instance of the Government finding it difficult to resist an urge to improve something that has been imported. Once you touch these things the expenditure, of course, is colossal. In the old Department of Supply, the Design Branch was fundamental. I should be happy if the Minister would inform me of the work that this branch is now performing and the amount that it is anticipated will be expended on it.

Another very important and well known part of the Department of Supply comprises the Defence Standards Laboratories, which are covered by Division No. 563. Apparently the functions of the laboratories are growing. I well remember when the Labour Government commenced these laboratories. The amount voted for them last year was £894,291, of which £873,112 was expended. I notice that the proposed vote for salaries and allowances is £420,000, compared with an expenditure of £354,216 last year. In addition, the proposed vote for temporary and casual employees is £389,000.

I should also like the Minister to inform me whether there has been any development following his announcement concerning the ball-bearing factory at Echuca. What has been the final outcome of the negotiations? In his statement, the Minister said that negotiations with private enterprise had reached an advanced stage and that a company would probably run the works as a private enterprise. This factory was started in the war years because of the great problem that was associated with obtaining ball-bearings. Considerable uncertainty attended the obtaining of ball-bearings from overseas. As the Minister knows, ballbearings constitute a fundamental item of defence equipment. I should like him to inform me of the present position in the matter. What guarantee have we that the factory will remain at Echuca? When last I visited the factory, its equipment was in excellent order.

I should like the Minister to tell me also what has happened in regard to the ammonium sulphate factory. Shortly after the war started, the Labour Government of the day established four ammonium sulphate factories, I think, at Mulwala, Villawood, Deer Park and at a place in South Australia. I think that Imperial Chemical Industries Limited acted as our agents in the running of those factories. We have heard nothing about them for a long while now, and I can find no reference to them in the items covered by the proposed vote for the Department of Supply. Of course, provision may be made elsewhere in the Schedule. When established, these factories played a very important part in relation to national development.

I refer now to Division No. 566 - Defence Research and Development Laboratories, for which the proposed vote is ?922,000. I take it that these laboratories actually do the work for the Department of Air, because, after all, that department was doing a tremendous amount of work with the sum of ?10,000 that the Minister mentioned. That the department did so much with so little is a matter warranting praise. Do these laboratories do all necessary work for the Royal Australian Air Force?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I regret that I am unable to inform Senator Armstrong what work is performed by the

Design and Inspection Branch covered by Division No. 563k. I have no notes on that matter. I have no doubt that if the honorable senator directs his questions in connexion with that branch to the Minister who will be handling the proposed vote for the Department of the Army, the information he seeks will be supplied.

Senator Armstrong referred also to Division No. 563 ; Defence Standards Laboratories. The functions of those laboratories are to perform tests of the more specialized kind for services inspection authorities and to advise those authorities as to the acceptability and use of products; to act as consultants and to provide standardization and calibration to government establishments and other agencies engaged in the development, manufacture or procurement of .defence supplies and for industry; to make investigations directed to the evaluation and standardization of defence products and of the processes for manufacturing such products; and to develop laboratory methods of assessment. The main laboratory is located at Maribyrnong, in Victoria, while branch laboratories are situated at Alexandria, in .New South Wales, and at Finsbury, in South Australia.

Senator Armstrong:

– Does the Minister happen to have before him details of receipts from private industry for work done by the defence laboratories?

Senator PALTRIDGE:

– I have no revenue estimates before me -at the moment, but my officers may be able to obtain them for me ‘in a moment or two. I understand that the Echuca establishment is now in actual course of sale. A deposit has been paid by the purchasers, who are a consortium of three overseas firms. The proposal is that they will continue the manufacture of ball-bearings at the Echuca plant. The situation in regard to sulphate of ammonia is that the department had three plants which were held as a potential in case of war. They were producing chemical ‘fertilizers for civilian use. The latest review of service requirements indicated that two plants would be sufficient for war purposes. Furthermore, the demand for the commercial product from the plants was being satisfied to such a degree by civilian producers that only one government plant was needed to augment the civilian production. Consequently, only one plant is now kept in operation. One is on a care and maintenance basis, and the third has been sold, under the terms of an agreement, to the company which was operating the plant. The plant which remains in operation is at Mulwala.

Senator WILLESEE:
Western Australia

– 1 refer to Division No. 577, Cafeteria Working Capital. The proposed vote this year is £25,000, although in 1958-59 there was neither an appropriation nor expenditure. Is this an allocation of funds for the purpose of establishing a trust fund, or is it to bolster funds? I assume that to some extent cafeterias are self-supporting. Would the Minister be good enough to explain the item?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I inform Senator Armstrong that receipts by the Defence Standards Laboratories have run to £25,000. In regard to the cafeteria working capital mentioned in Division No. 577, I point out that the operations of the cafeterias in various departmental establishments have been financed for some years through three Cafeteria Trust Accounts, namely those of Supply, Aircraft Production and Munitions. The Department of the Treasury , has indicated that, as from 31st August, 1959, all departmental cafeterias are to be financed through the Cafeteria (Supply) Trust Account. This will permit the remaining two ‘trust accounts to be closed. Additional funds of £25,000 are required in the Cafeteria (Supply) Trust Account to enable it to take over the assets of the cafeterias formerly operated through the Cafeteria (Aircraft Production) and Cafeteria (Munitions) Trust Accounts. Cash remaining in the latter trust accounts will be transferred to Consolidated Revenue during the current year.

Senator ARMSTRONG:
New South Wales

– The Government has retained the Mulwala ammonium sulphate plant, although, on an economic basis, that is probably the worst of the three. However, from the point of view of decentralization, I suppose we must congratulate the Government in keeping that plant going, because it is important that factories that are started in country areas should not be closed without a great deal of thought. May 1 ask the Minister which of the plants was bought by the Imperial Chemical Industries people? I should also like to know which plant has been placed on a care and maintenance basis. It seems rather strange that the Minister should say that private industry was producing sufficient ammonium sulphate for civilian needs, while an outside producer, in the form of I.C.I. , was able to buy one of the Commonwealth plants. I am interested to know whether I.C.I, is continuing to operate the plant and to produce ammonium sulphate there. If it can do so and is able to sell the product, why was not the Government able to continue to operate it?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The plant at Albion remains on a care and maintenance basis, while that at Ballarat has been purchased by I.C.I. The plants were producing mainly ammonium nitrate, with some ammonium sulphate.

Senator TANGNEY:
Western Australia

– I refer to Division No. 566, item 8 - “Office services, £17,000”. What exactly does this item include? Does it cover such things as cleaning and extra clerical assistance?

Senator Paltridge. The item “ Office services “ covers fuel, light, power, water supply and sanitation.

Senator ARMSTRONG (New South Wales [1’0.17]: - I wish to ask the Minister something easy. He has had a big day and I do not want to harass him. I refer to Division No. 567, which relates to munitions factories working capital. Although appropriations and expenditure are shown for 1958-59, in respect of payments to the credit of explosive factory trust accounts, there is no appropriation for 1959-60. Would the Minister explain why this is so?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Last year, there was a capital requirement of £282,000 in respect of munitions factories, but this year there is no such requirement.

Senator Armstrong:

– Was this put in at the beginning of last year or at the end of the year?

Senator PALTRIDGE:

– Towards the end of the year.

Senator Armstrong:

– The exact balance?

Senator PALTRIDGE:

– Yes. The requirement was assessed in the early part of the year as £282,000, and as I understand the position, it was transferred towards the end of the year. No capital is required this year.

Proposed vote agreed to.

Department of the Treasury.

Proposed Vote, £11,539,000.

Senator BENN:
Queensland

.- I refer to Division No. 191, Administrative, the proposed vote for which this year is £813,500. One of the acts administered by the Department of the Treasury is the Commonwealth Employees’ Compensation Act. For your benefit, Mr. Chairman, T point out that this act was introduced in 1930. I ask you to keep that year particularly in mind, for certain reasons. We find that the act has been constructed in a similar way to workers’ compensation acts which operate in the six States. That is, it relates to accidents which happen to employees who are thereby forced to lose time from their employment. It also makes provision for compensation to be paid to employees who lose limbs, who have their eyesight affected, and so on. It is a comprehensive compensation act, covering many groups of employees, including members of the defence forces. I direct attention to the growth of the Public Service since 1930 and the increase in the classes of work and operations in which the Commonwealth has become interested. Under the act the Secretary to the Treasury is ex officio Commissioner for Employees’ Compensation, and he is authorized to receive claims for compensation, to deal with them, and to make decisions.

The act has certain peculiarities. We know, of course, that the Department of the Treasury is the paying authority for all departments. These are some of the functions of the Secretary to the Treasury, in his capacity as Commissioner for Employees’ Compensation - (1.) The Commissioner shall have power to examine, hear and determine all matters and questions arising under this Act and the Regulations. (2.) The Commissioner may reconsider any such determination and may alter, amend or revoke any such determination. (3.) In the determination of matters and questions, the Commissioner shall be guided by equity, good conscience and the substantial merits of the case without regard to technicalities or legal precedent and shall not be bound by any rules of evidence.

The act then proceeds to state that the commissioner’s powers shall, in particular, extend to determining certain matters, which are listed from (a) to (g). It will be noted from what I have said that he is not bound by the rules of evidence and that he shall be guided by equity, good conscience, and the substantial merits of the case, without regard to technicalities. It seems impossible, to me at least, for any one exercising the powers conferred upon the commissioner to jettison the rules of evidence when dealing with any claim for compensation. One must remember that he is the Secretary to the Treasury and that his training is in safeguarding the funds of the Treasury. That is his first obligation. I do not say that he has not the mentality to enable him, when a claim for workers’ compensation comes before him, to put his main office to one side and then be guided by equity and good conscience in dealing with the claim, but it appears completely incongruous that an officer should occupy the two positions.

Let me state a hypothetical case to advance my argument and arrive at my conclusion. Let us say that a member of the Army who is returning to his home from duties in some part of the country where the Army has some activity, is proceeding through portion of a city when his motor cycle collides with another motor vehicle and his leg is crushed. During his period of treatment, he makes a claim for compensation. With the passage of time, he does not recover and he is required to be retired from the Army on a pension. He presses his claim and finds that it is not being dealt with at all. It may be more than six months or even twelve months before a decision <is made. I know of a case where eighteen months elapsed without any satisfactory decision being made. One of the essentials is that decisions be made and compensation be paid as quickly as possible. The act loses its value if a decision is not made quickly.

The employee is given the right of appeal to a county court or some similar court.

We have cases of this nature occurring, without decisions being made quickly. There are to-day very many departments and officers, and if one case comes under notice we may be sure that other similar cases are occurring. This is not satisfactory and it cannot be satisfactory from the Government’s point of view. I did not rise without being prepared to make a recommendation. I say that the office of Commissioner for Employees’ Compensation should not be vested in an officer of the Treasury. I have given the matter a little consideration and if I had my way I would transfer the function to an officer of the Solicitor-General’s office. The Solicitor-General is not briefed to fight workers’ compensation cases on behalf of the Commonwealth Government, and the duties of Commissioner for Employees’ Compensation could be delegated by him to a senior officer, who would have knowledge of the rules of evidence. I think that in dealing with these cases one must be guided by more than equity and good conscience. One must concern oneself with the technicalities. We have an unsatisfactory situation whereby claims are being referred back to the departments concerned, with no conclusive report or advice coming from those departments. A case for consideration was submitted to me and it was not until I sought the cooperation of the Department of the Army in which the employee was engaged that 1 got any satisfaction at all. The moment I approached the department for cooperation, it was forthcoming in a very short period and then the decision was made. It should not be left to a member of Parliament to have these things expedited.

Consideration interrupted.

The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the negative.

Consideration resumed.

Senator BENN:

– I thank you, Mr. Chairman, for allowing me to get my second wind. Having suggested, for very good reasons, that the office of Commissioner of Workers’ Compensation be transferred from the Treasury to the SolicitorGeneral’s office, 1 now wish to deal with the Department of the Treasury itself. I am going to deal, not with its operations, but with its premises. I was privileged not long ago to examine the electronic accounting machines which have been installed in the Department of the Treasury. They are very interesting machines, and I would recommend that all honorable senators be afforded the opportunity of visiting the Treasury to examine them. Some honorable senators, after having examined the machines, might think that they are merely peanut-grading machines, or something like that but if officers of the department explain the working of the machines, honorable senators will be very interested indeed.

However, I feel that any one who examines the premises of the Department of the Treasury will come away with the impression that the Government is installing up-to-date machinery in premises that are unsuitable for the most important department of the Commonwealth - a department which will increase in importance. At present, the total number of people employed in the department is in the neighbourhood of 5,000 or 6,000. Of course, they are not all employed in Canberra, but throughout the Commonwealth. As time passes, more machines will no doubt be installed. The work of the department is complex at the present time, and it will increase in complexity.

There is a rumour abroad - I feel sure you have heard it, Mr. Chairman - that in the next decade we will be forsaking these premises and going elsewhere. May I make the humble suggestion that if we forsake these premises at some time in the future, they be passed over to the Treasury, so that it can be housed in a proper manner.

The CHAIRMAN:

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

Senator LAUGHT:
South Australia

– I refer to Division No. 193 - Taxation Branch, and Division No. 194 -

Taxation Boards of Review. Dealing with the Taxation Branch, I find that it is proposed to appropriate £8,885,000 this year, which is an increase of about £500,000 on last year’s vote. I am not worried much about the increase, because I realize there are nearly 4,000,000 taxpayers in Australia, that there have been increases in salaries, and that there is an extra pay period in this financial year. The £500,000 can no doubt be accounted for in that way.

I think it is high time that we looked into the question of saving on taxation administration expenses. Some time ago, I presented a suggestion to the Senate that I claimed would bring about a considerable saving. I present my suggestion again this evening for the consideration of the Minister. My suggestion is that we exclude from the payment of income tax those people with incomes under £300 a year. By reference to the thirty-seventh report of the Commissioner of Taxation, it can be found that there- are 162,000 taxpayers whose net income is. between; £105 and £199 a> year. All that the Government obtains from those 162,000 persons is £207,000- a little over £1 a head. Why go to all the bother of providing staffs to collect income tax from those 162,000 people? The people with incomes between £200 and £299 number 206,000. All that the Government obtains from them is £910,000. There are 368,000 people in the group earning under £300 a year, and all that the Government obtains from them in income tax is £1,117,000. The 368,000 taxpayers in this lower income group comprise about one-tenth of the whole of the taxpayers in Australia, and the Government gets from them about one-eightieth of the total revenue. I believe that the cost of docketing, assessing and collecting taxes from these 368,000 taxpayers amounts to a considerable sum. It could quite easily be £500,000.

Then, Sir, there are other aspects of service rendered to and by these taxpayers. Most of them, I would suggest, would be employees who have recourse to the tax stamp system. Their employers would’ have to affix tax stamps to their tax sheets once a month, make certain adjustments at the end of the year, hand over the tax stamp sheets to the employees and account for them to the department. The employees would have to send in. their sections of- the tax stamp sheets and in most cases, no doubt,, would receive a refund of tax. Sometimes there would be a little more tax to be paid. I think I can put it to you, Sir, that for the 368,000 taxpayers in this lower income group, from whom the Government only gets a little over £1,000,000, a great deal, of the administrative work has to be done.

I believe, too, that possibly these taxpayers pay much more taxes of an indirect nature than- they pay in taxes of a direct nature. Indirect taxes are collected from these- people by the Commonwealth at a comparatively low administrative cost. The Commonwealth collects excise duty at a low administrative cost, and’ it’ collects sales tax at an exceptionally low administrative cost. I submit that the Taxation Branch could, effect considerable savings in its administration costs if it did not have to collect income tax from these smaller taxpayers. I believe also that- the collection of income tax from these people causes a good deal of bother to their employers, who have to deduct 3d., 6d.., 9d. or. some other small amount each week from the wages of these people. The employer becomes a collector of small amounts on behalf of the Taxation. Branch. I think it probable that industry in particular is bearing a great cost in serving the taxation commitments of these 368,000 taxpayers.

I earnestly put to the Government that it consider eliminating these people altogether from the payment of income tax-. If iti is not thought desirable to eliminate- them altogether, then, so that some record of these people could be kept, the Government could charge a flat rate of tax in the nature qf a licence: fee: This would’ not involve the Government in a lot of- administrative expense, and it would still enable it to have a record of these people. I consider that by adopting this suggestion the Government would effect some saving in this item of £8,885,000, and there would not be any loss of overall revenue. If there were a loss of revenue, it would not be so very great, but on. the other hand industry would enjoy some relief in not having to account for this large number of very small, taxpayers.

I wish to refer now to the Taxation Boards of Review. The proposed vote is not very much - it is only £20,400 - but I wish to direct my remarks to the question of appeals from decisions of these boards. It is commendable that there are boards of review for they avoid the necessity of taxpayers appealing to a court of law in the first instance if they feel aggrieved at the assessment made by the Commissioner. I am sure this saves the taxpayers a good” deal in1 legal costs.

The point to which 1 wish to address myself concerns appeals by the Commissioner against a decision by the Taxation Boards of Review in favour of taxpayers. Quite often the Commissioner decides- to use his right to appeal against a decision of ai board. Frequently the appeal is heard by the High Court of Australia. We then have a situation in which, although the taxpayer has established a bona fide case and obtained a favorable decision from the board, the Commissioner, for reasons which are quite honest but nevertheless academic, takes the case on to a court, which is frequently the High Court. Once the matter gets to the High Court costs become considerable.

I know that at times the Commissioner indicates that he will pay all costs, including those of the taxpayer, whatever the result of the appeal to the High Court may be, but in many cases that does not happen. In such a case, regardless of what the High Court’s, decision is, a taxpayer who. has succeeded before the Taxation Board of Review is confronted with the problem of payment of costs in connexion with an appeal to the High Court by the Commissioner. I admit that the Commissioner makes the appeal quite honestly and for good reasons, but the taxpayer is. still faced with the cost. I suggest that it ought to be a departmental practice to indemnify the taxpayer in all cases where the Commissioner appeals against a decision of a taxation board of review. The taxpayer must have had a bona fide case, otherwise the board would not have granted his appeal. That being so, I suggest that in. cases where the Commissioner appeals against the decision of the board the taxpayer should be indemnified automatically; it should not be left to the discretion of the Commissioner, as it is at present. The Commissioner should not be called upon to make a decision where costs amounting to many hundreds of pounds are involved. The taxpayer should be indemnified or guaranteed automatically as to costs. If that were the position, there could be no objection whatsoever to the Commissioner’s appealing to the High Court to establish important principles of law, for the taxpayer would not suffer in any way by being required to meet heavy legal costs.

Senator ARMSTRONG:
New South Wales

– Senator Laught has raised a very important matter - the proposed tremendous expenditure of £8,824,000 this year for the Taxation Branch. I should like the Minister to look at this branch and if, after his investigation, he finds that the branch is not making a profit, it should be closed down!

Senator McKENNA:
Leader of the Opposition · Tasmania

, - I address myself to the Estimates for the Department of the Treasury wi(th the knowledge that there probably is no more efficient department than that in the Commonwealth Public Service. I had a: very close association with it some years ago, and the more or less desultory association I have had with it in the intervening years leads me to the conclusion that the Treasury has lost nothing in efficiency.

Like Senator Armstrong, I am interested in the observations of Senator Laught. In particular, I am interested in his proposal that a number of taxpayers in the lower income brackets should be released from the income tax field. I am in general accord with that thought. I merely make the observation at the moment that there is a good deal more cost in that proposal than the mere loss of the income derived from the people in those lower income brackets who are to be excluded.

Speaking from memory, I think that the heavier cost will come from the tapering off process that must commence at the new starting point. For instance, assume that the cut-off were at £300 and that at £301 the present tax is £10 a year. The man on £300 would pay nothing while a man on £301. would pay £10. That would be an obvious anomaly. I submit that the Commissioner of Taxation would have to begin at a new and a low base and raise his curve from the £301, and there is a tremendous loss- of income in that process of rearranging the curve. I am not rejecting the broad suggestion of the honorable senator, but I do think that in presenting a case on that point one must address oneself t not only to what is lost by letting a number of taxpayers out of the field, but also to what are the costs and the loss of revenue involved in making a new starting point, which must be done in those circumstances, and gradually tapering it off and running the curve in an equitable fashion. There is duality of costs involved in that matter.

I rose only for one purpose. On the motion for the first reading of this Appropriation Bill, I addressed myself at considerable length to such major financial questions as State public debts vis-a-vis Commonwealth public debt, and the Commonwealth’s long sustained policy of financing its own capital works out of revenue and, when it supports the States’ works programmes from its own revenues, filtering them through trust accounts and involving the States in loans for the amount together with the payment of interest. That was not the first time I raised those issues, but that occasion was historic because it was the first time I got a reply from the Minister. I want to thank Senator Paltridge for addressing himself, as he did, to the arguments I addressed to the Senate.

I have the right, technically and theoretically, to deal with that subject now in committee, but I think it quite inappropriate, particularly at this late hour, when one is liable to be interrupted and to lose the thread of the debate as well as the sequence of a theme of that nature because of interruptions with sundry diversions. I merely rise first to thank the Minister for the effort he made to answer. I might say that I regard it as an answer but not a justification. With that thought in mind, I serve notice on the Minister, and on any other honorable senator who wishes to join in the fray, that I shall be returning to the subject on the motion for the third reading.

Senator WILLESEE:
Western Australia

– I wish to refer to Division No. 196 - Department of the Treasury - Superannuation Board for which the proposed vote is £97,200, and make one or two observations concerning the operations of the board. I realize that what I am about to propose may increase, to a slight degree, the board’s costs. I have considered this matter over a long period, and I do not think that a more appropriate time could be chosen to bring to the attention of the Senate certain unsatisfactory cases that have come to my notice. I am concerned at the way in which some departmental officers who are receiving superannuation payments are returned in haste to their full duties. As the result of medical advance diseases that once would have put a man out of the service to-day put him out for a relatively short time only. I have in mind such complaints as tuberculosis. At one time a departmental officer who suffered from tuberculosis was drummed out, never to return. Nowadays people in this category, and people injured in accidents and so on, are brought back into the service. The Superannuation Board has a right to move in that direction when it has been paying superannuation to officers before their normal retirement date. I have no quarrel with that. Obviously, if an officer is fit and well he should return to his duties, but the trouble begins when the board instructs such people to return to their departments. The departments say, “ We have been instructed to put you back at your former job and there you must go “. Frequently, people do not feel sufficiently fit to go back into their old duties at once. An accountant might not wish to resume his full accountancy duties at short notice. He might prefer to go on light duties for a while. The trouble is more evident in semi-physical fields such as telegraphy. Some very reasonable requests for gradual rehabilitation have been refused.

I cannot help wondering whether a committee composed of representatives of the Public Service Board and the Superannuation Board could not sit as an appeal court in these matters. The department would not then fall back on the decision of the Superannuation Board. The committee could adopt a humane approach which was based on psychological principles. Men could be taken back into their former positions gradually. After all, we have a humane approach to repatriation and social services, yet we are taking these public servants from the sick list and throwing them back headlong into their departments. Some of them may have been off duty for six or eight years.

I do not expect the Minister himself to be able to do anything, but I should be grateful if he would refer the matter to his colleagues, and ask them to have a close look at the position. I realize that the existing situation does not please the Superannuation Board or the departments any more than it pleases us, and if the proper machinery could be provided the difficulty might be overcome. I should be grateful if the Minister would pass on my suggestion.

Senator PALTRIDGE (Western Australia - Minister for Shipping and Transport and Minister for Civil Aviation; [10.54]. - I should be pleased to refer the honorable senator’s suggestion to the appropriate authorities. 1 shall be glad to do the same for Senator Laught and Senator Benn. 1 look forward to hearing Senator McKenna speak at the third reading stage.

Proposed vote agreed to.

Proposed votes - Miscellaneous Services - Department of the Treasury, £418,400; Refunds of Revenue, £29,000,000; Advance to the Treasurer, £16,000,000 - agreed to.

Loan Consolidation and Investment Reserve.

Proposed Vote, £37,000,000.

Senator McKENNA:
Leader of the Opposition. · Tasmania

– I should like to refer to Division No. 655 - Loan Consolidation and Investment Reserve - for which the proposed vote is £37,000,000. It is proposed to appropriate £37,000,000 from Consolidated Revenue for payment to the credit of the Loan Consolidation and Investment Reserve. That particular trust account was set up by act of Parliament in 1955 for the purpose of finding moneys to redeem the public debt of the Commonwealth, and also to permit investment in loans, primarily to support State works and housing programmes.

There has been a history of gradual accumulation in the intervening years. At the beginning of the last financial year the fund had a credit of £299,000,000 - almost. £300,000,000. Last year £38,799,985 was appropriated from Consolidated Revenue. The expenditure for the year amounted to £100,605,289. Those transactions left the fund with a credit balance at 30th June last of £237,372,520. In short, the fund began the year with approximately £300,000,000 in hand, and ended it with some £237,000,000 in hand. Now we are asked to appropriate another £37,000,000 from revenue, transferring it to the credit of that account. It seems to me that, on the face of it, that fund has been built up unduly, lt is significant that this year, while £37,000,000 is to be taken out of revenue and appropriated to this particular trust account, we are asked to deduct from defence expenditure an exactly similar amount of £37,000,000, to be financed from loan funds. What we are doing, in effect, is borrowing on the loan market, or raising treasury-bills, and are appropriating £37,000,000 in reduction of defence services. That may include provision for capital items to a small degree, but it must, in the main, relate to maintenance. Then, having reduced our normal annual expenditure by £37,000,000 through the appropriation of loan funds we end by taking out of revenue the remaining £37,000,000 for that fund - at a time when it already has a credit of £237,000,000.

The Government should explain why the fund is kept in such a swollen condition. What immediate commitments are falling due? Is it expected that £237,000,000 would be inadequate for this year’s purposes? We have heard the Minister for Shipping and Transport (Senator Paltridge) explain quite recently - and I think the Treasurer (Mr. Harold Holt) did likewise - that we have been very successful in raising loan moneys to finance State works programmes. It was hoped that there would be a continuance of that this year - that loan moneys would not be required for the State works programmes. In other words, if last year’s experience were repeated, there would be less call on the revenues of the Commonwealth to support States works programmes. So in the light of the Government’s anticipation that it will not need so much money to support States’ works programmes - its hope and expectation are that it will not need any - there can be only one answer to the establishment of the fund and the adding of the £37,000,000 to the £237,000,000 with which it began the financial year, and that is that the Government has an extraordinary burden of national debt falling due during the year which has to be met.

It is interesting to note the way in which these funds - the £237,000,000- are held. They are dealt with - if anybody cares to refer to the information - at page 57 of the Treasurer’s Statement of Receipts and Expenditure, under the heading “ Finance “ - not in the Budget Papers, where they were until very recently.

Senator Scott:

– To which item is the Leader of the Opposition referring?

Senator McKENNA:

– If the honorable senator will refer to the second last item, he will see that there was a credit at 30th June, 1959, of £237,000,000 odd, and that it is invested, apparently, in 4 per cent., 4£ per cent., 4$ per cent., 5 per cent, and 6 per cent, securities of the Commonwealth. We get to the interesting position where in this situation the Commonwealth is both the borrower and the lender in relation to the bonds and could, in fact, cancel the whole of those bonds without depriving anybody of anything. And, of course, the bonds are available for cancellation if the Government so wished in redemption of the national debt. They could be sold upon the share market when funds are required. That needs to be handled with discretion, having regard to the difficulties of raising loan moneys. Of the £237,000,000, only £52,000,000 is invested in treasury-bills. In other words, it is a fund invested in securities that to a reasonably high degree are realizable. The treasury-bills bear interest at only 1 per cent, per annum. The fund itself is earning income annually at the rate of £8,900,000.

Senator Paltridge:

– The balance is invested in firm securities.

Senator McKENNA:

– Yes, it is invested in Commonwealth inscribed stock. As I say, it is rather interesting to see the Commonwealth in the position of both lender and borrower in respect of the bonds.

Senator Armstrong:

– And paying interest on them.

Senator McKENNA:

– That is so. The Commonwealth owns the bonds, and it is also a borrower and a lender simultaneously. The position is most intriguing.

I am not concerned with that aspect of the matter at the minute. I am concerned only with the justification for transferring a further £37,000,000 out of Consolidated Revenue this year to the credit of an account that already has £237,000,000 in it. On last year’s performance, its net expenditure was the difference between £100,000,000 and £37,000,000.

What is the expenditure to be incurred in the course of this financial year that justifies the Government appropriating £37,000,000 from general revenue to add to a fund that seems to be already excessive for the immediate purposes of the Commonwealth? It is doing that at a time when there is so much pressure in many directions for relief - for better pensions, for something for the mothers in respect of child endowment - and at a time when much good could be done with £37,000,000 for a lot of people in the social service field. Many other pressing and worthy demands are made upon the Government. Why is the amount of £37,000,000 being added to the vast sum that is already tucked away? What is the real justification for that? In short, what is expected to be the net expenditure from that fund during this financial year?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The Loan Consolidation and Investment Reserve was established, as the Leader of the Opposition (Senator McKenna) has indicated, in 1955. The purposes of the fund are set out ‘in section 6 of the Loan Consolidation and Investment Reserve Act 1955, which reads - (1.) Moneys standing to the credit of the Reserve may be applied in repurchasing or redeeming securities which represent portion of the public debt of the Commonwealth. (2.) Securities so repurchased or redeemed shall be cancelled and the amount of the public debt of the Commonwealth shall be reduced accordingly. (3.) Until moneys standing to the credit of the Reserve are applied as provided by sub-section (1.) of this section, .those moneys may be invested in accordance with section sixty-two b of the Audit Act 1901-1955, as modified by the next succeeding section.

That is, only in securities issued or guaranteed by the Commonwealth Government. In other words, this is an account which is used for the investment of funds held in Commonwealth firm securities and treasurybills.

The Leader of the Opposition points to the fact that there is a balance of £237,000,000 in the account. He said, in effect: “You are appropriating a further £37,000,000 this year. Why, when there is such a balance held in that account do you, in fact, appropriate a further £37,000,000? “ He gave the answer when he read .the types of securities which were held on account of this fund. They are investments in Com.monwealth stocks of various kinds. The honorable senator remarked, in passing, that any withdrawal or any purchase or sale of stock so held would have to be watched closely so that it would not disturb the money market. That, Sir, is the answer to the question why a further £37,000,000 is being appropriated in this -financial -year for allocation to this fund. The balance of £237,000,000 is held in stock. It is considered that a withdrawal or a reduction would disturb the loan market and so the amount of £37,000,000 is being appropriated lo the fund.

The Leader of the Opposition asks what the money is to be used for. It is intended that the £37,000,000 required for this purpose shall be provided from-the proceeds Of the special loan - ;there will be legislation covering the special loan in the course of the session, to which a subscription will be made from the Loan Consolidation and Investment ‘Reserve.

Senator McKenna:

– A .special loan for what purpose?

Senator PALTRIDGE:

– I was about to say .that of the £37,000,00.0, £23,000,000 will be applied to defence and £14,000,000 to redemptions.

Proposed vote agreed -to.

War and Repatriation Services - Miscellaneous.

Proposed Vote, £157,700.

Miscellaneous Credits.

Proposed Vote, £163,000.

Ordered to be considered together.

Senator COOKE:
Western Australia

– I refer to Division No. 699 - Other Administrations - Recoverable Expenditure. This division covers munitions and stores, &c, supplied to the Government of the United Kingdom and other administrations, and the amounts of debit and credit appear to be self-balancing. The proposed vote for this financial year is £13,296,000, compared with a vote of £9,100,000 in 1958-59, of which £7,098,555 was expended. The amount recovered in 1958-59 was £10,400,000, thus establishing a credit of £1,300,000. In this financial year, it is expected that £13,133,000 will be recovered, leaving a debit of £163,000. I should like the Minister for Shipping and Transport (Senator Paltridge) to tell me the nature of the account and explain why the recoveries during “the last financial year resulted in a credit balance of £1,300,000, whereas in this financial year there will be a debit balance of £163,000 after recoveries have been credited. Is credit taken in this account for the proceeds of any disposals?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– This item is not a Treasury item, really. Expenditure under this item on behalf of the United Kingdom, in the current financial year, is estimated at £13,296,000. The item relates to supplies for all the services, and covers such things as stores, provisions, oil and fuel on behalf of the Admiralty; advances of Royal Navy allotments to Royal Navy ships; maintenance costs of Royal Navy submarines based on Australia; fares, freights and the like; advances ‘to visiting aircraft; supplies, works and services provided by the Commonwealth of Australia in connexion with United Kingdom weapon trials and the United Kingdom share of the costs of the Joint United Kingdom-Australia Long Range Weapons Project; and foodstuffs supplied by the Department of the Army. That, as I say, is expected to run to an expenditure of £13,296,000. Recoveries for the financial year are expected to be £13,133,000, leaving a balance of £163,000.

Senator Cooke:

– Leaving a debit of £163,000?

Senator PALTRIDGE:

– Yes.

Senator COOKE (Western Australia; [11.13]. - This is a recoverable rather than a self-balancing item. Last financial year, we had a credit in recoveries on a smaller outlay,, and I was wondering why, on the larger estimated outlay this financial year, the estimated recovery of administration and other costs will leave us with a debit of £163,000. We make this outlay for the supply of materials and services to the United Kingdom, and we possibly pay interest on the money. I wonder why we shall be left with a debit on the larger amount in the current financial year instead of a credit, as we had on a smaller outlay in the last financial year.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

, - The explanation is that, last financial year, we had outstanding large overseas credits which were repaid during the year. This financial year, no large credits are outstanding, and it is expected that, at the end of the year, there will be a small outstanding debit balance of £163,000. I repeat that that is a small amount outstanding on an expenditure of £13,296,000. That outstanding amount will be collected next financial year.

Proposed votes agreed to.

Department of Customs and Excise.

Proposed Vote, £4,636,000.

Senator WILLESEE:
Western Australia

– Mr. Temporary Chairman, at page 37 of the Budget papers, under the Department of Customs and Excise, there is an item for the remission of duty in special circumstances. The amount shown in respect of the financial year 1957-58 is £25,617, and that for 1958-59 is £63,765. The estimate for the current financial year is £30,000.

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

– That is related to Division No. 281, at page 44 of the bill.

Senator WILLESEE:

– Yes, but I am looking at the Budget papers. It seems that the department would normally expect to set aside about £25,000 or £30,000 for the remission of duty in special circumstances. I wonder why the amount more than doubled last financial year. Was there any special reason for that?

I should like to refer also to an item for rent of buildings which appears under the Department of Customs and Excise at page 61 of the Budget papers. The figures given for the financial years from 1955-56 on are fairly consistent.

Senator Henty:

– Will the honorable senator tell me on which page of the bill the item appears?

Senator WILLESEE:

– I cannot, because this detail is not shown on the bill. A total amount for one division only is shown in the bill, at page 44. The amount of the item shown in the Budget papers to which I refer has been fairly consistent throughout the years, as I have said. The amount has ranged from £15,696 in 1955-56 up to £22,590 in 1957-58, and the estimate for the current financial year has fallen back to £17,050. I do not see any amount set aside for the purchase of buildings. I wonder whether the next item, which is for repairs and maintenance, gives us any lead. Under that item, the estimate for the current financial year is £94,000 compared with an expenditure of £56,777 last financial year. That item, also, has been fairly consistent until the big jump in the current financial year.

I am wondering about the kind of buildings on which we are making this fairly heavy outlay. Are they buildings in the islands and in places such as New Guinea? Are they temporary buildings? I should imagine that the department would mainly require permanent buildings. The increase in the outlay on repairs and maintenance seems to indicate that the buildings are fairly substantial. I should think that, if the department were using permanent buildings, the rent would be reducing.

Senator HENTY:
TASMANIA · LP

– This comes under the vote for the Department of the Interior. It does not come under the vote for the Department of Customs and Excise, and I have no information about it.

Senator WILLESEE:

– I should like a further explanation of the item on page 61 of the Budget papers. As I read it, it relates to the Department of Customs and Excise.

The TEMPORARY CHAIRMAN:

–

Order! We are dealing with the proposed vote for the Department of Customs and Excise. The honorable senator must relate his remarks to that vote.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– The department makes provision in the Estimates each year for payment of belated claims. This year, it has been estimated that £35,000 will be needed to meet such claims.

Senator Willesee:

– Why was £67,000 needed last year? Is there any reason for that?

Senator HENTY:

– Apparently, it was estimated last year that belated claims would total £67,000.

Senator COOKE:
Western Australia

.- I refer to Division No. 281, Administrative. Item 2 relates to a proposed vote of £305,000 for salaries and payments in the nature of salary for temporary and casual employees of the Department of Customs and Excise. Honorable senators on this side of the chamber have always contended that casual and temporary employees of the Public Service should be made permanent as soon as possible. I am wondering whether the £305,000 to which I have referred relates to the payment of salaries of public servants who are sometimes known as permanent casuals. Could the Minister inform me of the length of service of the employees covered by this amount? In a department such as this, where the administrative work probably does not vary a great deal from one year to another, it should be possible to transfer some temporary and casual employees, who have had reasonably long service, to the permanent staff, thus enabling them to enjoy the conditions of service which permanent public servants enjoy. I should like the Minister to say whether the officers covered by this vote are really permanent casuals who could perhaps be transferred to the permanent staff.

Senator ARMSTRONG:
New South Wales

– Ever since the end of the war the seizure of motor vehicles that have been brought into this country contrary to customs regulations, has presented a problem to the Department of Customs and Excise. The procedure bears very heavily on people who are quite innocent of any wrong-doing. I wonder whether the department is developing a new approach to this matter. Apparently, when a motor vehicle is brought in, certain declarations are made by the person concerned. At that point, the department is not able to check whether the statements are right or wrong. The vehicle is given its entree card, as it were, to Australia, and it may then pass from hand to hand in good faith. We have seen instances in which motor cars have been on the roads in Australia for two or three years, having passed through several hands and having been purchased by various people in good faith. Then, the Department of Customs and Excise, by what means I do not know, has decided that such a vehicle has entered the country illegally. The department has gone to the current holder of the vehicle, although it may have admitted that he was not guilty of any wrong-doing.

This is a problem that should be capable of solution. There is no doubt that in some cases the innocent are being punished. I know that this matter has presented a problem for the department ever since the end of the war. It was a problem for our government, and it is a problem for this Government, but I think it is one that should be well on the way towards a solution. I should be thankful if the Minister would let me know the present position and whether the department is getting nearer to rectifying injustice in the case of people who have had vehicles confiscated, although they had previously made what investigations they could and, in some instances, had checked with the Department of Customs and Excise to ascertain whether the vehicles concerned had been cleared.

The Department of Customs and Excise provides, in the form of its customs procedures, the front window to Australia. The officers of the department make the first impression on visitors to this country in the course of their customs examinations of arrivals both by air and by sea. I should say that the department is consistently improving its methods. It has spent a good deal of money in making the facilities better. The officers in charge normally show imagination, although, of course, there are always isolated cases of lack of wisdom in administration. It is difficult to give details of such cases without also giving the names of the people concerned, but it cannot be denied that aspects of customs administration have sometimes been comic.

I know of a case in which a ship arrived at Fremantle and the customs officer decided that everybody on the ship would be cleared before one person was allowed to leave the ship. That might have been all right in theory, but many of the people on board had no more interest in leaving the ship than in flying. There were a couple of sick passengers, and a number of passengers could not speak English. The loud-speakers blared for the best part of three hours, but those people did not appear. The customs officers were in a terrible state about it. They would not allow any one to leave the ship. Passengers who wanted to have a quick look at the beautiful City of Perth were held on the ship because the customs people could not complete the examinations. In the circumstances, it is a wonder that they are not still there. I hope that examinations of that kind will not be continued. In that case, the customs officers could not comprehend what was happening. They sent people down to knock on cabin doors, but as I have said, some of the passengers could not speak a word of English and naturally did not present themselves for examination. I suggest that the department must always be on its toes, because with the different problems that arise from time to- time, officials are always likely to insult persons arriving in this country without meaning to do so.

I speak now with great feeling. I understand that there is considerable competition between the States of Victoria and New South Wales. Important businessmen arriving in Sydney are faced with relatively worrying customs problems. They then blame New South Wales and start their industries in Victoria. They do not appreciate that they should be blaming not New South Wales but the Commonwealth Government. I have encountered cases wherein all of my powers of persuasion were necessary to keep proposed new industries in the great State of New South Wales. These matters are important, and we* want the Minister’s help in regard to them.

Progress- reported;.

Senate adjourned at 11.32 p.m.

Cite as: Australia, Senate, Debates, 27 October 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19591027_senate_23_s16/>.

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