Senate
13 November 1959

23rd Parliament · 1st Session

  1. Senate
  2. 23rd Parliament
  3. 1959

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 10.30 a.m., and read prayers.

page 1485

QUESTION

CIVIL AVIATION

Senator MARRIOTT:
TASMANIA

– My question is to the Minister for Civil Aviation. Will the Minister make representations to the two principal airline operators asking them to consider the possibility of one airline operating a direct Hobart-Sydney passenger and freight air service, at least during the summer months? I point out that such a service operated in previous years, having been initiated by one of the companies, but the other company started a similar service, with the result that there was not enough traffic for both of them. A service of the kind for which I have asked would form an essential link between Hobart and Sydney. There is no direct shipping service between those ports, and I believe that we should have a direct air service operated by one airline.

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

– Yes, I will be pleased to discuss the proposal of the honorable senator with both major operators.

page 1485

QUESTION

AGRICULTURAL SUPPLIES

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Minister for Trade, and relates to the question I asked the Minister for Shipping and Transport last Tuesday concerning the shortages in Western Australia of galvanized piping, fencing wire and baling wire. As newspaper reports continue to place the blame for these shortages on the irregularity of shipping to Western Australia since last July, despite the denials of the Minister for Shipping and Transport, I ask the Minister: Is it a fact that a supplier of these materials in Western Australia wrote to the Broken Hill Proprietary Company Limited last June requesting that company to suspend for a time delivery of the materials I have mentioned?

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

– I do not know whether a supplier wrote to the Broken Hill Proprietary Company Limited requesting that company to suspend the delivery of supplies. I have made other inquiries, however, and I find out that on 11th November the “ Woomera “ sailed from Newcastle for Fremantle taking 3,500 tons of steel, including 1,500 tons of piping for the Stewart and Lloyd company, and 550 tons of wire rods for the Western Australian supplier referred to. I think a shipment of that size should help considerably, on its arrival, to alleviate the market shortage in Western Australia. As to what has been the cause of this incident, the consensus of opinion seems to be that the demand for these steel products fell, the merchants concerned reduced stocks in conformity with what was apparently the reduced demand, and then when demand increased they were caught short. But the action that has now been taken by the Broken Hill Proprietary Company Limited will relieve the situation.

page 1485

QUESTION

REDFERN MAIL EXCHANGE

Senator ORMONDE:
NEW SOUTH WALES

– Has the Leader of the Senate anything to say with regard to the statement of the New South Wales Minister for Housing, reported in to-day’s press - a statement with which I concur - that the Commonwealth Government has one housing policy for its favoured public servants, which is evident if one looks around Canberra, and another policy for the people of Redfern?

Senator SPOONER:
LP

– I am sorry to hear Senator Ormonde say that he concurs with the remarks of Mr. Landa, although perhaps it is not unexpected that the honorable senator should take such an attitude. I have not a great deal to add to what I have said previously on this matter. I think the approach of the New South Wales Government is an unfair one. It is an unfortunate aspect of Commonwealth-State financial relations that the Commonwealth provides moneys to its utmost capacity, and then the States, having received those moneys, criticize the Commonwealth because it does not provide additional amounts for specific projects. With regard to the particular project in question, it was quite open to the New South Wales Government, from the resources available to it, to make greater appropriations for housing than it has done. It was open to it to supplement moneys received from the Commonwealth with moneys from its own resources. That is what most States of the Commonwealth do; that is what the New South Wales Government has consistently refrained from doing, and this is one of the reasons why the housing position in New South Wales is now worse than in any other State. In other words, the New South Wales Government has not played its part in supplementing Commonwealth funds.

As to this particular project, 1 repeat what I have said previously. For years it has been known that the project was to be undertaken. For years New South Wales has had ample notice of the need to make suitable arrangements. It would be a sad thing indeed if the construction of this big building was deferred because of lack of co-operation from the New South Wales Government. It is one of the biggest undertakings that is likely to be commenced in New South Wales in the near future. It is going to provide a great stimulus to the building industry, and a good deal of employment after it is completed. Despite the fact that the building has been in contemplation for the best part of a decade, the Commonwealth is now giving some months notice - ample notice for the tenants concerned to make suitable arrangements. We are hoping that there will be no hold-up and that we can push on with the project early in the New Year. We think it is only reasonable to ask the New South Wales Government to co-operate with us.

page 1486

QUESTION

COMMONWEALTH DEVELOPMENT BANK

Senator SCOTT:
WESTERN AUSTRALIA

– I preface a question, which is addressed to the Minister representing the Treasurer, by stating that in America and Canada government finance is readily made available, sometimes to the extent of 90 per cent, of requirements, for mining projects that have been approved by the mines departments of those countries. Can the Minister say when the doors of the Development Bank will be open for business and whether it will be the policy of the bank to make finance available for mining projects that have been approved by the mines departments of the States, or by the Bureau of Mineral Resources, Geology and Geophysics?

Senator PALTRIDGE:
LP

– It is anticipated that the doors of the Development Bank will be open early in the new year, as was announced at the time that the banking legislation was before the Senate. As to the policy that the bank will adopt, I suggest that a question on that matter could only be answered when the bank had commenced business, had had regard to the relative merits of the applications made to it, and decided which business it should undertake.

page 1486

QUESTION

CANBERRA WATER SUPPLY

Senator O’BYRNE:
TASMANIA

– My question is directed to the Minister representing the Minister for the Interior. Has he seen the recent United Kingdom “ Information Service Bulletin “ in which details are published of a water distillation plant which will give a clean water supply to the island of Guernsey? In view of the wide variety of foreign bodies floating in the water supply of Canberra, in water which is a little too pale to mistake for milk but is sufficiently discoloured to make one suspect that cattle could have been wading in the reservoir, will the Minister inquire whether a distillation plant similar to that installed in Guernsey could be installed in the national capital?

Senator SIR WALTER COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I have seen the report to which the honorable senator has referred, and I shall have pleasure in bringing his request to the notice of the Minister for the Interior.

page 1486

QUESTION

PUBLIC SERVICE

Senator HANNAN:
VICTORIA

– Can the Minister representing the Attorney-General advise the Senate of the branches or divisions of the Commonwealth Public Service whose salaries are protected from attachment under the provisions of section 64 of the Public Service Act? Is it a fact that the salaries of permanent public servants are liable to attachment, while those of temporary public servants are not? Can the Minister explain why any public servant should be protected in this fashion in peacetime?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I am unable at present to provide the details required by the honorable senator, but I shall get them and give them to him.

page 1486

QUESTION

IMPORT RESTRICTIONS

Senator WRIGHT:
TASMANIA

– I ask the Minister representing the Minister for Trade whether I am correct in understanding a recent announcement by the United Kingdom Government to mean that all import restrictions, as such, have been lifted in relation to imports into the United Kingdom. Has consideration been given to similar action in Australia? If it has, can the Minister indicate how close to that stage we have come?

Senator SPOONER:
LP

– I am sorry to say that I have not seen the newspaper report to which Senator Wright has referred. The matter is of such interest that I should be glad if he would let me see his copy of it so that 1 may bring myself up to date. We in Australia have made it abundantly clear that the extent to which import restrictions should be continued is a matter that is constantly being reviewed by the Government in the hope that eventually we shall be in such a stable economic position that it will be possible to eliminate them.

page 1487

QUESTION

SHIPPING

Senator MARRIOTT:

– Has the Minister for Shipping and Transport seen an announcement that the passenger liner “ Monowai “ is to be withdrawn from the Australia-New Zealand run? As many Australians delight in visiting New Zealand, and because the majority of our overseas tourist trade comes from New Zealand, will not the withdrawal of “ Monowai “ cause a serious decline in this traffic, unless a replacement is provided? Could the appropriate Ministers of the Australian and New Zealand Governments confer on this matter with a view to making a suitable approach to private enterprise with the object of having the service retained?

Senator PALTRIDGE:
LP

– I am not in a position to say anything at the moment other than that I have seen the announcement made in connexion with “ Monowai “. I have not had an opportunity to discuss it with the owners, the Union Steamship Company of New Zealand, but I shall do so at an early date.

As to the remaining part of the question, and the interesting suggestion which the honorable senator makes, I shall be pleased to take his suggestion into account, depending, of course, on the result of my interview with the representative of the Union company.

Senator KENDALL:
QUEENSLAND

– By way of supplementary question, I ask the Minister for Shipping and Transport whether he recalls that last session I brought up this matter of the withdrawal of “Monowai” because it was quite obvious that she would have to be withdrawn fairly soon. To my knowledge, she is about 35 years old. I asked the Minister at that time whether it would be possible for the Australian National Line to build a substitute vessel to run on that service. 1 now ask him whether any thought has been given to the matter and, if so, what the results have been.

Senator PALTRIDGE:

– No thought has been given to the employment of a vessel owned by the Australian National Line in this trade, first for the reason that there is not a suitable ship available in the fleet of the line and, secondly, for the reason that the purpose of the Australian National Line is to engage in trade on the Australian., coast.

page 1487

QUESTION

COMMONWEALTH EMPLOYEES’ COMPENSATION

Senator McKELLAR:
NEW SOUTH WALES

– I preface a question to the Minister representing the Minister for Labour and National Service by stating that recently it was brought to my notice that an employee of the Commonwealth Government had sustained injuries which were caused by an employee of another branch of the Public Service and that the damages received for those injuries seemed to be very light. I ask the Minister whether it is a fact that Commonwealth employees receive only predetermined amounts for injuries caused by other personnel employed by the Commonwealth?

Senator GORTON:
LP

– My general understanding of this matter is that there is a scale of damages dependent upon the actual injury -sustained. I do not think that the question as to whether the injuries were caused by an officer of another department or another branch of the Public Service comes into the matter at all. In cases of that kind compensation is determined by the Commissioner for Commonwealth Employees’ Compensation, a Treasury official. As I say, there is a prescribed table for injuries of a particular kind.

page 1487

QUESTION

TIN

Senator SCOTT:

– I address a question to the Minister for National Development relating to the production of tin in Australia. Is the production of tin in Australia as great as the demand? If not, is it catching up to demand? Are production figures rising? Is the consumption of tin rising? Has the Government recently, through its Bureau of Mineral Resources, carried out diamond drilling operations at the Maranboy tin-field in the Northern Territory? If so, can he advise us of the results of those drilling operations?

Senator SPOONER:
LP

– lt is hard to cover all the ground, but the short answer runs something like this: The demand for tin has increased very materially indeed in Australia as a result of the extension of operations of the Broken Hill Proprietary Company Limited. The production of tin has not increased anything like commensurately with the increased demand. I do not have the statistics readily in mind. I doubt whether there has been any great increase in tin production, but it is a matter to which the Bureau of Mineral Resources has been applying itself. It is not an easy problem to solve. We did contribute to the drilling operations on the Maranboy tin-field in the Northern Territory. My recollection of the last reports I saw is that no great good had resulted from that drilling programme. We are trying to encourage development in these fields.

page 1488

QUESTION

RIVER MURRAY WATERS

Senator WRIGHT:

– I remind the Minister for National Development of the alarming figures concerning water storage in the Snowy Mountains area that he revealed to the Senate some two months ago. Can he tell the Senate whether there has since been any improvement?

Senator SPOONER:
LP

– I cannot quote the figures, but the general situation is that recent falls of both rain and snow in the catchment area of the Snowy Mountains scheme, have been such that the River Murray Commission has found it unnecessary to consider imposing water restrictions during the forthcoming summer. I make that statement subject to the reservation that I have been away for a few weeks. The last information I had was that the River Murray Commission had cancelled the meeting which it had called for the purpose of considering restrictions because it felt that the emergency in the supply of water from the catchment area had passed. I know that it is necessary to con sider the difficult situation that exists in South Australia at the present time but my information is that we will be able to maintain to that State the normal water supply from the River Murray.

page 1488

QUESTION

INDUSTRIAL ARBITRATION

Senator WRIGHT:

– I wonder if the Minister representing the Attorney-General can inform the Senate how much of its time the Commonwealth Industrial Court finds itself engaged on the adjudication of cases?

Senator GORTON:
LP

– I cannot answer that, off-hand, but I will get a reply for the honorable senator.

page 1488

QUESTION

WESTERN AUSTRALIAN AIR SERVICES

Senator SCOTT:

– I preface my question to the Minister for Civil Aviation by stating that there is great enthusiasm among residents of the north-west of Western Australia about the proposed purchase or acquisition by MacRobertson Miller Airlines Limited of a Fokker Friendship aircraft. They are anxious to know when it will begin its first run. Can the Minister give me any information on this subject?

Senator PALTRIDGE:
LP

– It is still anticipated, as far as I know, that the aircraft will be commissioned and go into service in December, some little time before Christmas. Captain Kleinig, the general manager of MacRobertson Miller Airlines Limited, and flight and maintenance crews are currently at the Fokker factory at Amsterdam and will fly the aircraft out on completion and delivery. I do not know of any change in that plan. I am aware, of course, of the enthusiasm for the introduction of this aircraft and, naturally, I will let the honorable senator know if there is any alteration in the plan.

page 1488

QUESTION

MARGARINE

Senator LILLICO:
TASMANIA

asked the Minister representing the Minister for Primary Industry, upon notice -

  1. Is it correct that a quota for the production of margarine is allocated to each State by the Australian Agricultural Council?
  2. If so, what is the quota allocated to each State and is it adhered to by them?
  3. What percentage of the components necessary for margarine are imported into Australia?
  4. What is the total margarine production in Australia?
  5. What is the total butter consumed in Australia?
Senator GORTON:
LP

– The Minister for Primary Industry has supplied the following answers: -

  1. Table margarine produced for local consumption is limited by State legislation. State Ministers for Agriculture have unanimously resolved that they will not increase State margarine quotas without first submitting their intentions to a meeting of the Australian Agricultural Council.

The quotas are adhered to by the respective States.

  1. Manufacturers do not reveal what percentage of margarine components are imported into Australia.
  2. For the year 1958/59 - Table margarine, 16,097 tons (of which approximately 37 tons were exported); other margarine, 24,140 tons.
  3. For the year 1958/59- 115,0«» tons.

page 1489

QUESTION

WAR SERVICE HOMES

Senator ANDERSON:
NEW SOUTH WALES

asked the Minister for National Development, upon notice -

Will the Minister make available the latest information, obtained by the War Service Homes Division, upon the rate of interest paid by exservicemen on temporary finance obtained on war service homes loans?

Senator SPOONER:
LP

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

The War Service Homes Division made a survey in October, 1959, of interest rates charged on temporary finance. This survey covered applicants for War Service Homes Division loans who were given approval to raise temporary finance during the month of July, 1959. Details of interest rates charged and the number of cases in each category, as disclosed by this review, are shown in the following table: -

page 1489

AIRPORTS (BUSINESS CONCESSIONS) BELL 1959

Motion (by Senator Paltridge) agreed to -

That leave be given to introduce a bill for an act to provide for the grant of leases, licences, and trading rights in connexion with Commonwealth airports.

Bill presented, and read a first time.

Standing Orders suspended.

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. lt will be recalled that a bill dealing with business concessions at Commonwealth airports was first introduced in May of this year and that it was decided to defer the bill until a number of representations and suggestions concerning certain aspects of the bill had been carefully considered. This has now been done and as a result certain parts of the bill have been amended in a manner which I will explain later to take advantage of these suggestions. Having regard to the lapse of time since the original bill was introduced, I think it will be useful, even though I will to some extent be repeating matters that I have already outlined, if I review again the purposes and general nature of the bill.

The primary purposes of the bill are to provide facilities at airports which will meet the needs of the travelling public, and to develop the business potential of airports so as to obtain a greater economic return from the extensive terminal buildings, hangars and other facilities and land at Commonwealth airports.

The value of Commonwealth aerodromes and related facilities at present is approximately £52,000,000 and the annual cost of maintenance and operation exceeds £9,000,000. These figures will rapidly increase as further aerodromes and facilities are brought into operation. At present a portion of this cost is recouped through air navigation charges (approximately £550,000), taxes on aviation fuel (approximately £1,200,000) and rentals of premises (approximately £250,000). This leaves a gap of approximately £7,000,000 between revenue and expenditure.

Senator Kennelly:

– Is the inference to be drawn that you will be able to bridge that gap?

Senator PALTRIDGE:

– I do not think that the business concessions will provide as much as £7,000,000. Overseas experience, especially in the United States, has shown that major airports can become virtually self-supporting if their business potential is properly developed, and many countries are making special efforts to reach that position. For example, the United Kingdom Select Committee on Estimates at its 1955-56 session - on civil aerodromes and ground services - recommended that “ more urgent measures should be taken by the Minister to develop amenities and concessions at airports. “ The Seattle-Tacoma Airport, as a further example, is an airport with traffic density comparable to that of Sydney or Melbourne and is associated with a city with a smaller population than Sydney or Melbourne. According to that airport’s financial report for 1957, airport revenue not only met all maintenance, operating and other costs, but returned a profit of 79,300 dollars. This result was largely due to commercial development of the airport, non-aviation revenue comprising 57.5 per cent, of the total revenue.

Larger airports in the United States, such as Los Angeles, returned profits exceeding 2,000,000 dollars. That the Common wealth has already taken some steps in this direction is evidenced by the following figures: From 1955 to 1958 revenue from rentals increased from £199,000 to £250,000 per annum and revenue from business concessions from £360 to £50,000. Under arrangements which this bill will authorize, it is estimated on a conservative basis that revenue from business concessions on major airports will reach £160,000 by the end of 1960 and may exceed £500,000 within a few years. These financial benefits will, of course, be coupled with better facilities to meet the needs of -the travelling public. The current development of passenger terminal facilities at major airports will further increase the business potential at those airports.

Some of the types of businesses which have succeeded on overseas airports are - Advertising, baggage rooms and lockers, banks, barber shops, beauty parlours, car parking lots, children’s nurseries, cocktail lounges, coffee shops, conducted tours, delivery service, drive yourself car service, flower shops, gift shops, insurance machines, news stands, photographers, restaurants, service stations, snack bars, tobacconists, vending machines. Market research conducted from time to time by the Department of Civil Aviation indicates a positive and urgent demand for the goods and services supplied by these types of businesses.

The scope for the development of these activities is indicated by the size of the ready-made market at Melbourne airport, for example, where there are more than 4,000 employees whose hours of work and distance from established1 business centres deprive them of normal shopping facilities and where there are approximately 1,000,000 passenger movements per annum, with departures and arrivals taking place from early morning to late night. At Sydney airport the corresponding figures are higher.

In order to develop business concessions at airports, it is necessary to make some changes in existing administrative arrangements. Under existing legislation - I refer to the Air Navigation Act 1920-1950 - there is provision for the establishment, maintenance and operation of aerodromes, including conditions for their use. There are also provisions to the effect that the DirectorGeneral of Civil Aviation is responsible, subject to the Minister, for the control and management of Commonwealth-owned aerodromes. This undoubtedly contemplates important responsibilities relating to the development of business concessions at aerodromes. However, insofar as business concessions require the granting of leases or licences, the Department of the Interior at present has the primary statutory responsibility by virtue of the Lands Acquisition Act and the Administrative Arrangements Order. There has been, therefore, a division of responsibility which, it has been found in practice, retards the rate of commercial development. Under this bill, control of leases and licences and the granting of business concessions within Commonwealth airports will vest exclusively in the Department of Civil Aviation. This will effect a substantial saving of time and administrative costs. Other land acquired for civil aviation purposes and the acquisition and disposal of land, including aerodrome land, will continue to be governed by the Lands Acquisition Act and remain within the administrative responsibility of the Minister for the Interior. 1 will now briefly outline the main provisions of the bill. The bill is expressed to apply firstly to aerodromes owned by the Commonwealth and operated in pursuance of the Air Navigation Act and regulations. It also applies to any part of a military aerodrome which has been made available for civil aviation purposes as the result of arrangements made by the Minister with the appropriate defence authorities. The most important aerodromes which may be affected are Darwin and Canberra, where parts of the aerodromes have been set aside for terminal buildings and other facilities necessary for civil aviation purposes.

Clause 6 of the bill provides that the Minister may, on behalf of the Commonwealth, grant leases and licences in respect of land within an airport on such terms and conditions subject to the payment of such rent or other considerations as the Minister thinks fit.

Clause 7 prohibits the sale or supply of goods or services within an airport or the carrying on of, or soliciting for, any business except in accordance with the terms and conditions of an authority issued under the act. It is important for the operators of air services that business activities connected directly with the operation or maintenance of aircraft or the promotion of airline business as, for example, the supply of aviation fuel, maintenance services or catering for meals to be consumed aboard aircraft, should not require special authorization. Clause 7 (3), which, I should point out, did not appear in the original bill, provides that such activities may be conducted without any special authority.

Clause 8 authorizes the Minister to grant an authority to engage in business activities at airports for such period and on such terms and conditions as the Minister thinks fit and provides that the authority may be included in or granted in relation to a lease or licence.

The most important clause in the bill is unquestionably clause 9, and it will be noted that this clause has been substantially revised since the matter was last under consideration. Sub-clause (1.) provides that the holder of an authority may act in accordance with the authority without obtaining or having any other authority, licence, permit or registration. Sub-clause (2.) provides that the Minister may, having regard to the special needs of the travelling public, specify, in the terms and conditions of an authority, the days on which and the times during which the authority may be exercised, and the authority may lawfully be exercised on those days and during those times. The clear intention of this clause is to permit the conduct of business outside normal trading hours but only in circumstances where the extension of trading hours is necessary to meet the needs of the travelling public.

Sub-clause (3.) provides that an authority to sell or supply intoxicating liquor shall contain terms and conditions under which the holder is subject to requirements, prohibitions and restrictions, including restrictions as to the days on which, and the times during which, such liquor may be sold and supplied, corresponding as nearly as possible to those that apply under the law of the State in which the airport is situated.

Senator Wright:

– Will you get your department to supply the Senate with information as to the various State laws in regard to liquor sales?

Senator PALTRIDGE:

– Yes, I shall do that.

Sub-clause (4.) requires an authority to contain terms and conditions necessary for the purpose of preventing the sale or supply of goods or services to persons resorting to the airport solely or principally for the purpose of purchasing or obtaining goods or services outside normal trading hours. Finally, sub-clause (5.) provides that a lease, licence or authority under the act does not exempt a person from compliance with other laws of the State or Territory in which the airport is situated. Before discussing the provisions of the clause in greater detail, I think I should complete my outline of the provisions of the bill.

Clause 10 requires an authority to contain terms and conditions in relation to the inspection of premises and the sampling of goods and also authorizes the Minister to make arrangements with the Governor of a State for the performance by members of the State Police Force or Public Service of any work required by the Commonwealth including the payment for any such work. This clause, therefore, makes it quite clear that in appropriate circumstances the Commonwealth may make full use of State personnel in the administration of requirements of the Commonwealth which are based on State law.

Clause 11 has the effect of saving existing leases and licences which have been granted by the Commonwealth before the date of commencement of the new act. Other provisions of the bill deal with evidentiary matters, delegations and the making of regulations.

The provisions of the bill relating to the sale of intoxicating liquor have been revised very substantially in order to meet the point of view of various organizations which have made representations on the matter to the fullest extent consistent with the Commonwealth’s constitutional position. As regards intoxicating liquor, the revised clause maintains the principle that a licence under State law will not be necessary, but at the same time provides for terms and conditions, operating by force of federal law, corresponding to those applicable under State law. While the clause excludes State laws which might require an authority, licence, permit or registration it recognizes, however, that the terms and conditions of an authority under the act could themselves require the holder to obtain or have an authority, licence or permit under State law or under some other Commonwealth law.

It would be quite wrong to suggest that the bill usurps State powers and functions in this regard since section 52 of the Constitution provides that Parliament shall have exclusive power to make laws relating to places acquired by the Commonwealth for public purposes. The word “ exclusive “ means, of course, that the power is to be exclusive of the power of the Parliament of the State. It is envisaged that, where a State has laws relating to the sale of liquor which, in fact, meet the needs of the travelling public, the Commonwealth authority may do no more than require the concessionaire to obtain a State licence and to comply with all its provisions.

To a great extent, therefore, the initiative in this matter is left to State governments but, in any case, even where a Commonwealth authority is issued, it must contain conditions and restrictions especially those relating to the days on which and the times during which liquor may be sold, corresponding, as nearly as possible with the provisions of State law which would be applicable in the State in which the airport is situated.

I should also emphasize that there is certainly no intention of authorizing the sale of liquor at any airport unless the volume of traffic passing through the airport fully warrants the establishment of this facility. I do not envisage that during the foreseeable future it will be necessary to authorize the sale of liquor at more than six or seven airports throughout the Commonwealth and its Territories.

In proposing this bill, I am conscious of the need to ensure that the ever-increasing costs of operating and maintaining our civil airports do not remain a burden upon the Australian taxpayer. Other countries have proved to us that with proper commercial development of civil airports we can, under legislation such as I have outlined, do much to offset these high but very necessary costs. I am also equally conscious of the growing demand of the travelling public for adequate facilities at Commonwealth airports. There is a rapidly growing public demand for the type of airport facilities with which the bill is concerned and it is essential to lay sound foundations for future development in this direction. 1 would emphasize that the bill does not mean that the Commonwealth will engage in business activities on airports. On the contrary, its purpose is to facilitate the extension to private enterprise of excellent opportunities to develop the valuable business potential which is generated on these airports.

In concluding, may I say that, although civil aviation in Australia has kept pace both technically and operationally with other world leaders in the field, we have not until more recently been able to devote much effort to the provision of facilities and services required by the travelling public and other users of our airports. I feel certain that the scheme contemplated by this bill presents the satisfying prospect that, with greatly increased passenger facilities of many varieties, and with the resulting increase in airport revenues, our major airports will soon compare favorably with the more attractive and successful airports overseas.

I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 1493

APPROPRIATION BILL 1959-60

Third Reading

Debate resumed from 12th November (vide page 1484), on motion by Senator Spooner -

That the bill be now read a third time.

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– We are coming to the end of the debate on the Appropriation Bill, and I want to make a few remarks on the procedure that we have adopted because, during the course of the consideration of the Estimates, the Government found it necessary to introduce the guillotine. This led to a number of critical and, perhaps, caustic remarks from some senators. Remarks of this kind remain on the record of the Senate, and I find that they are quoted in works bv students of parliamentary procedure. There is another side to this question, and T think, in fairness to the Senate, that T should put the other point of view on the record of the Senate so that those who take an interest in these matters mav see both sides of the question in the circumstances that occurred.

I have looked back over the record of the last four years. That shows that in 1956 consideration of the Estimates occupied six sitting days, or 30 hours. The guillotine was introduced after four days of debate. In 1957, the Estimates occupied the Senate for 31i hours extending over five days, during the whole of which time the guillotine was in operation. In 1958, there was no guillotine at all. The Estimates went through the Senate in 14 hours, spread over three days. This year, by the time we finish this morning, we shall have taken 31 hours, spread over seven days, with the guillotine operating after four days. So the first point I want to make is that, from the point of view of time occupied, discussion of the estimates this year will have been spread over as lengthy a period as was taken in any one of the previous four years.

Senator Wright:

– In other words, your guillotine procedure was not more generous this year than it was in the other two instances.

Senator SPOONER:

– The point I am making is that we are taking as much time this year as we took in the previous four years. I think that this is at least a reasonable reply to the caustic comment that the Senate had been denied a reasonable opportunity to consider the Estimates. It was quite a reasonable period of time. It is fair to say that it is a matter of opinion whether the Senate used that time in the most advantageous way, in that it applied a substantial proportion of the time to the departments considered earlier, at the expense of the departments that came forward for consideration later.

I have restricted these figures entirely to the committee stage of the bill. I make the further point that there was on this occasion a fairly lengthy debate on the motion for the first reading of the bill. To have such a debate is, of course, the right of the Senate. I think it would be admitted that I am not one who desires to restrict debate in the Senate. We all, whether we are Government senators or Opposition senators, share the responsibility of ensuring that the legislative programme is completed.

I point out further to those who have been critical of this year’s arrangement that this year the House of Representatives took four days longer to deal with the Estimates than it took last year. The result was that the Estimates reached the Senate on 8th October, lt would have been quite competent for the Senate to meet the following week for the purposes of the Estimates debate, but the Senate did not meet in that week. It rose for the week in the same way as did the House of Representatives, and I am sure that that course was adopted with the concurrence of honorable senators.

Senator Wright:

– But there was no indication that that would cause the application of the guillotine.

Senator SPOONER:

– The fact that the Senate rose then, combined with the fact that the Senate then knew that both houses would rise subsequently for another week for the purpose of attending the Commonwealth Parliamentary Association Conference, gave notice to all of us, and put a responsibility on all of us, to ensure that the business that was presently and prospectively before the Senate was completed within the time that was available.

I have no desire to be provocative upon the issue. I make the two points because I believe that it is in the interests of the Senate that they should be on record. The first point is that, judged by the standards of previous years, the Senate this year had reasonable and ample time in which to consider the Estimates. The second is that a situation arose in which, in view of the large legislative programme that confronted us, it was necessary to bring down the guillotine in order that we could programme with certainty. I know that there is a divergence of opinion about the use of the guillotine in the Senate. There is a school of thought that believes this procedure should never be used in a house of review. I respect that school of thought, and I point out that the closure motion and the guillotine are very seldom used by the Government in the Senate. Although I say that, I personally hold the view that we get a better debate on the Estimates in the Senate when we . introduce the guillotine right from the start of the proceedings.

I say that against the background that I do not contemplate the introduction of the guillotine for the purposes of limiting debate. Experience shows that it seems to take us about seven days, or 30 hours, to deal with the Estimates. In my own per sonal view, for the purpose of conducting the debate in an orderly way, and for the convenience of Ministers, senators, and the great number of officers who need to attend the Senate’s deliberations, it is an advantage to have the guillotine down right from the start, giving reasonable and ample time, with the idea not of limiting the debate but of dealing with all departments in an orderly way. I am sorry that we had to put the guillotine down midway through these proceedings, but I saw no alternative to it. The fact that we need to meet this morning is an indication of the weight of the business that is on the businesspaper.

I make these remarks against the background that we all have a common interest in maintaining the prestige and standing of the Senate. What I have said is aimed at that objective. I think it is desirable that the record should show a comparison of the time allocated this year with the times allocated in previous years, and it should show that the need for the guillotine this year arose from the fact that so much more time was given to the departments considered earlier at the expense of those departments consideration of which came later.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I have listened with very great interest to what the Minister has said on the subject of the guillotine, particularly in its application to the Estimates. I think that he has completely misconceived the position in making such a cold, statistical approach to the problem. I have not checked his figures; I have not. of course, had the opportunity to do so. I do no’ query them, but I am not convinced by them. It is clear to everybody that the committee of the Senate may have no interest in a particular department in one year, but that the next year that department might be the subject of a raging debate that could occupy many hours, or even a day. Each year must be looked at in the light of the events of the preceding financial year and the prospects for the coming year.

Senator Spooner:

– And the guillotine arranged accordingly.

Senator McKENNA:

– If it has to be arranged accordingly. If the guillotine has to be arranged at all, at least there should be some consultation with the Opposition as to its arrangement. Apart altogether from the general application of the guillotine and the remarks that I made about it on an earlier occasion from this place, there is the fact that it is the Opposition’s duty par excellence to challenge at the point of the Estimates. That is our one real opportunity to rake completely the activities of the Government.

I feel that the Minister’s approach to the matter is completely devoid of reality. The answer to the case he puts is that, under the guillotine procedure as it has operated down the past few days, as the guillotine fell after each few hours, and subsequently after each hour, there was not one occasion when there were not senators wanting to speak on the estimates then before us and being denied an opportunity to do so. Is not that the case that the Opposition put - that senators would be denied opportunities to speak?

Senator Sheehan:

– Senators on both sides.

Senator McKENNA:

– That applies, as the honorable senator says, to both sides. lt is quite obvious, from the number of senators who were rising during the debate as the guillotine fell, that there were senators on both sides who were denied opportunities to speak. That is the case of the Opposition against this procedure. I deny that a reasonable time was given, and I repeat that a very unfair element was the lack of proper consultation. If a government applies a guillotine without consulting the Opposition, it may limit the time accorded to what it knows may be controversial issues, and so may stifle debate. ] find it unnecessary to withdraw one word of the comments that I made on behalf of the Opposition when the guillotine was proposed.

Let me leave that and turn to the purpose that has brought me to my feet. I have adopted the unusual course of speaking on the motion for the third reading of the bill for the reason that I gave at an earlier stage. When speaking on the motion for the first reading of the bill, I opened up what I regard as a vastly important matter in the field of CommonwealthState relationships. The Minister in charge of the bill was good enough to furnish a quite comprehensive reply to my remarks, and I thought that it was proper that I should take the earliest opportunity of answering the case that he presented. 1 shall take a moment or two to summarize simply the case that I put to the Senate.

I drew attention to the vast differences down the past ten years between the Commonwealth public debt and the public debt of the States. I pointed out that over that period, whilst the public debt of the Commonwealth fell by £168,000,000, that of the States rose by £1,383,000,000. The Senate will recall that I traversed the position of each State. Then I dealt with the interest position of the Commonwealth as against the States. The interest payable by the Commonwealth on its public debt increased by only £1,000,000 per annum over the whole period of ten years, whilst that payable by the States increased by the colossal sum of £63,000,000 per annum. That is the position that I posed first in relation to the public debt. I drew attention to the drop in the public debt of the Commonwealth, the vast increase in that of the States, the stability of interest payments so far as the Commonwealth was concerned, and the enormous increase of £63,000,000 per annum in the interest payments of the States.

I then traced the reasons for that. I pointed out that the Commonwealth made a very insignificant contribution to help the States to repay the principal part of their debts, and that it made no contribution whatsoever in any direct way to the States to help them to meet this enormous additional annual interest commitment of £63,000,000. I pointed out that, because of the methods adopted by the Commonwealth, the States were being forced to increase their charges to their people for all kinds of intimate services, thus accentuating the increase of costs in the community. I said that they had to do that in order to meet this vast annual interest bill. In the course of showing how this came about, I drew attention to the facts that down the past ten years the Commonwealth has financed the whole of its capital works from revenue, and that the total amount of revenue taken in that way over the past ten years was £1,084,000,000. I put it that that method of finance was, in effect, a capital levy, upon which no interest was paid to those contributing, and that it imposed an enormous burden upon the taxpayers of current years.

I said that, in addition, owing to the failure of the loan market, the Commonwealth had provided, from revenue, some £576,000,000 over that ten-year period to buttress the loan market, and had made those moneys available to the States for the purpose of financing their capital works programmes. I added that the Commonwealth, having collected that money without any obligation to repay it or to pay interest on it - having drawn it off in taxes down the ten-year period - did not make it available in support of the States’ works programmes straight away, as a distribution. Instead, the Commonwealth filtered the money through a trust account, invested it in Commonwealth bonds, and then lent it to the States at interest. In other words, I pointed out that revenues raised by the Commonwealth from the people of Australia were lent to the States, and that the Commonwealth was imposing on the States an obligation to repay the money and to pay interest on it. So we have the spectacle of the Commonwealth having to tax the people even further in order to raise additional revenue so that the money can be passed over to the States to help the States to pay the vast interest bill that the Commonwealth has imposed upon them.

Senator Wright:

– Does the honorable senator know what was the total amount expended by the States on public works during that period, and how much of it came from the Commonwealth in this way?

Senator McKENNA:

– Yes. The figure appears on page 6 or page 7 of the statements attached to the Budget speech for this year. The indication is that £576,000,000 from Commonwealth revenue was used to support the States’ works programmes.

Senator Vincent:

– Do you mean that £576,000,000 was contributed by the Commonwealth from revenue?

Senator McKENNA:

– Yes, to support the States’ works programmes down the past ten years.

Senator Vincent:

– For purely capital works by the States?

Senator McKENNA:

– Yes. The money came from revenue, but when it was given to the States it was treated as loan money. Therefore, under the Financial Agreement, the States were required to pay back a portion of it each year, as principal, and also to pay full interest on it. The Commonwealth makes no direct contribution to meeting the interest charge.

Senator Wright:

– That would mean that, of the Commonwealth revenues over that period, £1,500,000,000 has been applied to capital works - about £500,000,000 to State capital works, and £1,000,000,000 to Commonwealth capital works.

Senator McKENNA:

– The figures are even a little higher than that. The amount for Commonwealth capital works was £1,084,000,000, and that made available to the States was £576,000,000. So it runs to the very substantial figure of more than £1,500,000,000 over the whole period. An average of approximately £150,000,000 per annum - it might be £160,000,000 - was taken from the people of Australia in revenue and applied for capital purposes.

Senator Mattner:

– A very good idea. 1 say.

Senator McKENNA:

– The honorable senator may think so. The point I am stressing is the one that I made in my opening remarks during the first reading debate. This is completely unfair to the federation; it is unfair to the States, and it has led to inflation. It has imposed an undue burden on the taxpayers in those years. It is quite contrary to the spirit and intention of the Financial Agreement, the whole thought underlying which was that money raised on the loan market would be repaid over a period of 53 years, and that the taxpayers in each of those years would repay a proportion of the principal, and the interest, instead of bearing in one year the whole cost of capital works. In very brief outline that is the case that I put. T have developed it on more than one occasion, and I very briefly run through it now to lay the foundation for my commentary on what the Minister had to say The Minister, in my view, elected to deal with part only of the case that I presented. He completely ignored another part of the case, as I shall show. T would say thai he fought an evasive action by expending very great energy in attacking Aunt Sallies of his own creation and not of mine. Proposition after proposition, as I hope to show, that he attacked with great gusto as emanating from me, in fact had not emanated from me. I shall refer now to the report of Senator Paltridge’s speech at page 1116 of “Hansard”. Referring to me he said -

He said that the States’ debt had stood at £900,000,000 in 1945 and £1,000,000,000 in 1949, but was now almost £2,400,000. The public debt of the Commonwealth, he added, was virtually the same as it was in 1945, and some £168,000,000 less than it was in 1949. On that premise the Leader of the Opposition proceeded to develop an argument which, I felt, was designed to create the impression that the Commonwealth Government had deliberately pursued a course with the object of making a profit at the expense of the States.

Now, there are two things wrong with that statement by the Minister of my position. First, I defy him to show me where I referred to 1945 at all. At no time did I deal with figures back to 1945, as he said I had done. At no time did I mention the figure of £900,000,000. I dealt with a cleancut ten-year period from 1949 to 1959. Secondly, at no time during the whole of that speech did I postulate the proposition that he attributed to me that the Commonwealth had pursued a course with the object of making a profit at the expense of the States. If he will look through the report of my speech he will find that on at least a dozen occasions I made the same lament, the Same complaint - that what was being done was unfair from beginning to end. I certainly did not put on the figures the construction that the Minister attributes to me. Of course, the reason why the Minister went back to 1945 was to enable him to go back further still, and he went back, in fact, to 1 939. I quote again from the “ Hansard “ report of his speech as it appears on the same page and in the same column as the previous quotation. The Minister said -

In other words, the Commonwealth’s indebtedness for capital works is three and three-quarter times greater than it was twenty years ago. The total States’ debt over the same period has risen from £891,000,000 to £2,391,000,000. The States’ debt is less than three times what it was in 1939.

My answer is that it is completely devoid of reality to deal with the period from the pre-war days of 1939 up to now without taking into account the vast expansion of Commonwealth activity in field after field that has occurred during that time.

Senator Paltridge:

– I thought I made it clear in my speech that I had included the war debt in the total of £1,649,000,000, which is the Commonwealth’s debt to-day.

Senator McKENNA:

– The honorable senator, in the figures that he quoted, completely ignored the war debt. He has taken the figure for works and other purposes not including war debt. Unfortunately for the argument he is putting now, he did not take the war debt into calculation in the figures he quoted.

Senator Paltridge:

– I took the total out, classified it, and compared the capital works figure for the two periods.

Senator McKENNA:

– Let me take exactly the same figures that the Minister took, and show how unreal it is to attempt to apply the figures in the way that the Minister did. I turn to page 93 of the Budget. This is the source from which the Minister took his figures. On the table on that page in the column headed “ Works and Other Purposes “, the Commonwealth’s debt for works and other purposes in 1939 is shown at £131,312,660. The debt on account of the States for the same year is shown as £897,772,041. In other words, it was just on seven times the size of the Commonwealth debt, not taking the war debt into consideration. Now let us have a look at the corresponding figures for 1959. The Commonwealth debt in 1959 in relation to works and other purposes was £502,695,251; the debt on account of the States in 1959 was shown as £2,391,620,399. or four and four-fifths times that of the Commonwealth. One could logically conclude from that, that whereas the State debt in 1939 was seven times that of the Commonwealth it is now only four and four-fifth times that of the Commonwealth. One might just as logically conclude that the States have been starved of finance for their developmental works. That would be as legitimate and as logical a conclusion as the one the Minister drew.

Senator Vincent:

– May I interrupt you once more and take you back to your complaint that the Minister had drawn the wrong conclusion from your speech on the treatment of the States. You went on to say that all you had said in the speech was that the action of the Federal Government was unfair.

Senator McKENNA:

– That is correct.

Senator Vincent:

– Would you explain unfair to whom?

Senator McKENNA:

– I indicated a while ago that in the first place it was unfair to the concept of federation, the partnership between Commonwealth and States, and unfair to the States in particular; and that in the second place, it was especially unfair to the taxpayers of this generation. I think that Senator Vincent was not in Australia when I made the first speech. It took me one hour to make it, and the honorable senator will realize that I cannot make it all again now. I have to confine myself at this stage to dealing with the Minister’s reply to my speech.

Senator Mattner:

– Included in the figure of £2,391,000,000 of State debt that you mentioned is £576,000,000 advanced by the Commonwealth to the States. Was it on that figure that you based your statement that the Commonwealth was profiting at the expense of the States?

Senator McKENNA:

– It is included as part of the debt of the States. They have the obligation to repay that as they would have to repay a loan raised on the market. I discard the Minister’s argument about that altogether, and I think it completely unreal for him to go back to 1939, when a vast development of Commonwealth activity in all kinds of fields, and a complete change of activities of the Commonwealth and the States, have taken place in the interim.

I refer again to page 1116 of the Minister’s speech. The Minister said -

But let us have a look at the movement over the last ten years to which he referred and find out why it is occurring. It has occurred by virtue of the fact that during the last ten years nonreproductive war loans have been falling due, and they have been discharged whenever possible. I suggest there is nothing wrong with that. The honorable senator himself, in his speech last night, advanced the proposition that non-reproductive debts should be retired at the first opportunity.

I have searched my mind as to whether I have ever had that thought, and I have searched the record of my speech. I confess that I cannot find that I have ever entertained or expressed such a thought. I think it would be a completely silly proposition to discharge one loan, merely because its proceeds - even if they could be identified - had been applied to non-reproductive works, rather than to discharge a loan the proceeds of which had been applied to reproductive works. Surely a national debt commission, or any person charged with responsibility for debt, would first ascertain when the respective debts fell due and then elect to discharge the one that had the more onerous conditions. The question whether the proceeds had been applied to reproductive or non-reproductive works would have nothing to do with the matter. I merely indicate, with considerable strength, that the argument attributed to me by the Minister never emanated from me. If the Minister can point to anything in the record of my speech that would even hint at such an argument by me I shall be amazed.

Let me refer again to a comment by the Minister on page 1117. He said -

Senator McKenna appears to suggest that by reducing the Commonwealth debt whilst that of the States increases, the Commonwealth has deliberately set out to enrich itself at the expense of the States.

I have already dealt with that suggestion.

The fact is that the Commonwealth, as is well known, has been adopting the politically and financially more difficult course of financing its capital works programme and its services from revenue.

Let us deal with the suggested financial difficulty. I say that the Government has taken the easy way. It has not had regard to the burdens on the taxpayers of this year. It has brought about, by its own conduct, the failure of the loan market, thus necessitating this kind of approach. It has chosen the easy task of imposing compulsory taxation on the people - in effect a compulsory levy - rather than endeavouring to woo the loan market successfully. When I spoke on the first reading of the bill 1 claimed that the Government’s great failure, apart from its ineptitude in handling inflation in Australia, was in the fact that it had brought about the collapse of the loan market. That has been the cause of half the financial troubles of the Commonwealth.

So I say that the Government chose what is financially an easy course. It has levied taxes and applied the revenue to capital works, without any obligation to pay interest. What easier financial course could it have taken? It is certainly not a financially difficult course. If the people understood what was being done it would be much more difficult politically to do it. But

I am putting it to the Senate that the people do not understand what is being done. They do not understand that they are being taxed to the tune of £150,000,000 a year for ten years to provide capital works which will endure for generations; that they have to pay interest on their own moneys contributed by way of taxes, and that they are taxed again to enable the Commonwealth to raise money to help the States to pay the interest bill brought about by the Commonwealth’s own actions. Let me say that I disagree entirely with the Minister when he says it is a financially difficult course to follow. When he says that it is difficult politically, all I can say is that it certainly would be if the people understood what was happening, but, I repeat, they do not understand.

Senator Vincent:

– Would you not say that such a policy is deflationary, when the economy is being subjected to inflationary pressures?

Senator McKENNA:

– It is, of course, deflationary to draw money off and to expend it on reproductive works in particular. It is, in a way, deflationary.

Senator Vincent:

– Would you not agree that during the past years it has been a very desirable practice in the circumstances?

Senator McKENNA:

– No, I do not agree. I would not agree at a time when there is an adequate supply of labour and materials. It is justified at a time when there is a shortage of either of those things, but that has not been the case in Australia for a good number of years. Now, when the Government claims that we have reached a prosperous stage, instead of lightening the burden it is increasing it. It is providing £142,000,000 in the current budget out of revenue for its own capital works.

Senator Vincent:

– With great respect, 1 think the honorable senator’s speeches on inflation during the last ten years, to my knowledge, have been in violent disagreement with the propositions he is putting now.

Senator McKENNA:

– My remarks today do not affect my earlier propositions in the slightest degree. What I am putting to the Senate at the moment is the position vis-a-vis the Commonwealth and the States, that has been unfairly created by the Commonwealth, and I propose to pursue that line with the Minister for a moment. On page 1117 he is reported to have said -

It is quite fantastic to put forward a proposition that if loan funds had been available, then this federal Government - or a federal government of any other colour, for that matter - would have financed to the extent it has from revenue the programme which I have referred to and kept taxation at a necessarily higher level. That is a fantastic proposition, and one that could not be borne out by a moment’s investigation.

I agree entirely with him. I merely ask this question: Will he please tell me how he attributes that statement to me? Where did he find any record of it? I certainly never advanced that proposition. This is one more of the Aunt Sallys that the Minister erected to knock over with great vigour. The only trouble is that this is not a proposition that I have ever advanced.

Then the Minister comes to the attack that I made on the practice of raising revenue to help the State works programmes - taking money from the taxpayers of the year, to lend it, principally to the States, at interest, and with the obligation to repay. The Minister said, again, on page 1117 -

First, it is desirable that there should be a proper lender-borrower relationship. If this is not so, the States could lose their present and historically untrammelled right to use their loan funds in a manner which they themselves determine. The Commonwealth has, of course, made specific grants to States, but where those grants have been made they have been made for specific and predetermined purposes such as roads, universities, hospitals and the like.

In other words, he says that we should charge interest and put the matter on a complete loan basis, otherwise we will be tying the States up if we grant the money without interest and specify the particular capital works to which it shall be applied. He points to what is done with roads and universities. What he entirely ignores is that the Commonwealth has no hesitation in giving some £250,000,000 per annum to the States by way of income tax reimbursement, without earmarking a single penny of it, and the States have no hesitation in taking it. They are in no fear that any part of that money is going to be earmarked. Why advance to the Senate the proposition that you must charge the States interest if you give them monies for capital works? Why say that, otherwise, the Commonwealth would be dictating the projects to which the States should apply the money? I should like to see the Commonwealth try to dictate to the States the particular works that should be dealt with. The Commonwealth would have the toughest fight on its hands that it ever encountered if it tried to do so.

The argument that that must be done falls to the ground when we see that, in this current year, of £321,000,000, being the total payments to or for the States under various heads, £251,000,000 represents income tax reimbursement grants and special grants from the Commonwealth Grants Commission, or completely unconditional grants.

Senator Vincent:

– If, as I suggest the honorable senator implies, this money should not bear interest or have interest charged against it by the Commonwealth, I assume that he is arguing that it should be given to the States as a gift or as a free-of-interest loan.

Senator McKENNA:

– If the honorable senator will wait a little while I should like to discuss that aspect in relation to the Minister’s speech. I enjoy discussing the matter with honorable senators, but my prime purpose in speaking at this stage is to answer the Minister. I want to conclude in sufficient time to enable him to have a say, and as time is limited - the debate will finish in another three-quarters of an hour - I do not want to take the whole of the time. I still have a good way to go.

Senator Wright:

– But is there a guillotine for this stage?

Senator McKENNA:

– Yes. The guillotine will fall at 12.45 p.m.

Senator Wright:

– I have a rooted objection to listening to an argument without having an opportunity to answer it. I am not saying that the burden of my answer would not fall on the side of the Minister, but [ think it is futile to have only part of an argument.

Senator McKENNA:

– I agree. For that, of course, the honorable senator must blame the Government.

Senator Wright:

– Quite so - I do.

Senator McKENNA:

– I am curtailing my remarks and am asking honorable senators to refrain from interjecting solely be cause I want to finish with sufficient time to give the Minister an opportunity to say a few words. I want to be fair. If the Senate will let me proceed, I shall finish very much sooner than I would otherwise, and the Minister will have a much better opportunity to speak. If he considers it desirable to cut his time short, too, some other honorable senators may have an opportunity to say a few words. I do not want to detain the Senate any longer than I must, but I feel that 1 should speak for the Opposition, having put a case on its behalf, and answer the case put by the Minister.

I reject the Minister’s first point that if the States were given money for their capital works, without interest being charged, the Commonwealth would then have to determine what works they should undertake. That would be a political and a practical impossibility. The next point that the Minister makes is in the same paragraph. He says -

In the circumstances where interest-free money was made available to the States, I suggest that the States would not be motivated- that is, to help loan raisings - and would not feel the need to be so motivated. Indeed, should those circumstances arise at any time, it would not be surprising that the States could well continue an attachment to a form of support which was interest-free.

In the first place, that accuses the States of complete irresponsibility. I invite the Minister to say what justification he has for a comment that would lead one to believe that any State government had ever failed, or would ever fail, to support the loan market. The Commonwealth and the States are partners in the Australian Loan Council. I should say that the States have co-operated most marvellously with the Commonwealth. Secondly, if the inconceivable were to happen and the States were to withdraw their public support of the obligations to the loan market, it is entirely in the Commonwealth’s power to say to them, “ Then you will get no interestfree money “. The sanction is in the Commonwealth’s own hands. So why should the Minister attribute such irresponsibility to the States in the course of his argument and ignore the fact that the Commonwealth has in its own hands the power to correct such a situation if it arose?

The Minister goes on to point out very properly -

It should not be forgotten that the States do in any case obtain a return for their own Budget - this is a most important point - in interest and other forms of earnings, which flow from the creation of the assets which are established by the use of this money.

That is perfectly true, in relation to only some of the money. What financial return, in principal or interest, do the States get from the establishment of schools? There is a tremendous demand for that kind of thing all over the Commonwealth, with our rapidly increasing population, stimulated by migration and by other factors. One of the heaviest elements of capital expenditure is in relation to schools, but such expenditure does not immediately yield a return to the treasury of the State concerned, enabling it to meet interest payments.

The point is that a large part of the moneys that are provided go into nonreproductive works of that character, works that do not yield immediate principal and immediate interest, such as you get when you build houses and people pay rent, or instalments of principal and interest if they are buying the houses. If the States put their capital moneys into hydro-electric projects, or things of that kind, there is undoubtedly a return when the projects come to fruition. I have no contest with the Minister on that point. I merely indicate that that is true of only some of the moneys.

The Minister goes on to say -

Nor should it be forgotten that when the Commonwealth determines the level of its revenue grants to the States, the amount required by the States for satisfaction of their debt charges is taken into account in the fixation of that grant.

That is my very complaint. The Commonwealth imposes on the States an obligation to pay interest on nearly £600,000,000, which cost it no interest. That involves the States in paying, between them, £30,000,000 a year in interest. Then - the Minister calmly admits my impeachment - the Commonwealth taxes the people to get additional revenue to help the States to pay the £30,000,000. That drives home the very point I have put and am pressing.

The Minister states -

Further, it should not be forgotten that under the terms of the Financial Agreement Act the Commonwealth meets half the sinking fund charges on State works debt.

He says, in other words, that the Commonwealth already meets half the cost of repaying these special loans. Let us have a look at the generosity of that contribution. Under the Financial Agreement, the States are compelled, down a period of 53 years, to pay 10s. per £100 of the debt, that is, one-half of 1 per cent. The Commonwealth, under the Financial Agreement, contributes a half of the 10s., so that the States pay 5s. per £100 and the Commonwealth pays 5s. per £100. Therefore, on each £100,000,000, the magnificent contribution from the Commonwealth towards paying off the debt is £250,000 per annum.

I should say that the Minister was really scraping the bottom of the barrel for arguments when he threw in that one in support of his proposition. Then, he proceeds to justify the practice of paying for capital works out of revenue by a reference to the practice in the United Kingdom and America. But his own case, which he bases on that, falls to the ground when he says that the United Kingdom financed not the whole but a proportion of its work from revenue in the few years immediately after the war. I would not argue against the proposition that, in times of buoyancy, and perhaps in times of high inflation, it is desirable to do a proportion of capital works out of revenue; but I am afraid he cannot point to the practice in the United Kingdom to justify carrying on, over a period of ten years, increasing expenditure out of revenue for this purpose at a time when the Government claims it has achieved economic stability and has brought a halt to inflation.

The Minister also referred to the United States of America and indicated that the Americans finance a proportion of their capital works from revenue as a matter of course. The burden of my complaint, of course, is that the Commonwealth is financing the whole of the capital works programme - its own and some of those of the States - out of revenue.

The Minister also referred to what the Labour Government did in the immediate post-war years. His exact words were -

During the post-war years, the Labour Government consistently charged to Consolidated Revenue expenditure on capital works even though in some of those years loan moneys were available and were in fact used to retire treasury-bills. 1 took the trouble to examine the record of the Labour Government during the postvar years. I found that in 1945-46 the capital works programme of the Commonwealth amounted to £6,000,000. Lumping capital works and revenue items together, the Treasurer budgeted to fill a gap of £152,000,000 from loan moneys.

Senator Wright:

– What was that gap in?

Senator McKENNA:

– The gap was between the anticipated revenue from taxation sources and those two outgoings. The estimated gap was £152,000,000. When the year concluded, the actual gap was £153,000,000.

The point 1 make against the argument adduced by the Minister is that there was a debit of £6,000,000 in that year on account of capital works of the Commonwealth, but imported into the Budget was £152,000,000 in loan money. I think he will concede that that would more than actually cover the £6,000,000 spent on capital works. It is true that, from an accounting point of view, the £152,000,000, as I recall it, was debited against defence expenditure. I merely make the point to the Minister that the expenditure on works and services was £6,000,000, and that loan money to the tune of £152,000,000 was imported into the Budget. So that what he says of that year is not correct.

In the following year, the works and services of the Commonwealth amounted to £15,900,000. Let me call it £16,000,000. The Treasurer budgeted for a gap of £58,500,000. The actual gap was only £38,000,000. So, again, we have the position that whereas the Labour Government’s capital works amounted to £16,000,000, loan moneys to the tune of £38,000,000 were imported into the accounts. In 1947-48, capital works amounted to £24,000,000. A gap of £30,000,000 was budgeted for, but there was, in fact, no gap. It is correct that, in that year the whole of the capital works of the Commonwealth, amounting to £24,000,000, were paid for out of revenue. In the following year, the last full year of Labour’s administration, capital works ran to £40,000,000. For the first time, defence capital works were included in this particular item. A gap of £17,700,000, to be filled from the loan market, was budgeted for, but again no gap, in fact, occurred. So, in respect of two of the four post-war years, on the basis of the case that I present, the Minister is in error in his statement.

I come now to his great omission. What he did not answer at all, what he completely avoided, was the proposition that I put to him that, in a federation where there is a Commonwealth allegedly working in partnership with States, and running Australia, if the situation is that a limited amount of loan money is available to cover both Commonwealth and State capital works, and moneys have to be derived from revenue to fill the gap, then, in sheer fair treatment of the States, the Commonwealth should share the revenue with the States, and it should take part of the burden of the loan money raised. I say that should be done in proportion to the agreed works programmes of the Commonwealth and States. I argued that a contrary practice was completely unfair, that nobody could justify it. I asked the Minister to explain why that was not done. What was his answer to that proposition? To date, I have had no answer. I should’ like the Minister to give an answer.

I come now to the last matter I want to touch upon. I have suggested that the Government lacks imagination in dealing with the loan market. I put the loan market failure as the key to the great financial’ difficulties of the Commonwealth. The Minister invited me to make a suggestion that might help. I first repeat one that I made quite a long while ago in this Senate, namely, that there should be a very bold approach to stimulate public interest in a series of “ Develop Australia “ loans, to make sure that the country understands that we must develop Australia and that money must be found for that purpose. T said that the surest way to encourage the money was to write on each of the bonds, over the currency of perhaps a ten-year period when the Government might be raising loans of this type, an undertaking that if the rate of interest was raised in any subsequent loans it would also be raised on the first bonds. That is one point.

The second thought I leave with the Minister is this: When the Government goes on to the foreign markets, one of the conditions it writes into the bonds is that the yield of those bonds will be entirely free of Commonwealth taxation. I can understand why that is done in respect of those bonds issued abroad. Obviously no money would be available if a foreign lender were to be taxed on his income both in his own country and in the borrowing country. But this suggests another idea. The Government acknowledged the principle of wooing the loan market by making a tax rebate of 2s. in the £1 on Commonwealth bond interest. I invite the Minister to consider either giving to Australian prospective lenders the opportunity to have a higher rebate or, if the tempo of the times demands a quick inflow of local money, then,*in the interests of doing the fair thing by the taxpayers at large, giving a complete rebate with respect to the interest on Commonwealth bonds that are issued expressly for the purpose of developing this country.

Senator Wright:

– When did the rebate of 2s. in the £1 commence?

Senator McKENNA:

– I think it has been running for a very long period.

Senator Wright:

– I thought you implied that it was of recent origin.

Senator McKENNA:

– No; it is acknowledged as a means of attracting investors into the loan market. The question I ask is, “ Why not extend it, why not run it the full course if the need is great enough? “ The argument in favour of that proposition is that whilst the Government would lose something in taxation on an issue of, say, £100,000,000 worth of bonds - the interest would be approximately £5,000,000, and the Government would lose less than £2,500,000- the £100,000,000 coming in by way of loan would relieve the taxpayers of taxes to the order of £97,500,000. The burden would be spread down the 53 years contemplated under the Financial Agreement.

The Minister challenged me to make a suggestion. I invite him to consider them both. I hope that at least they will stimulate some thought in relation to the matter. The great tragedy is that our loan market has failed. I regret that it has.

I am obliged to the Senate for its patience with me in this rather, I suppose, remote type of argument, but it is a very important matter. It is unusual for me to speak on the motion for the third reading of a bill, but I felt that I would like to pay the Minister the compliment of traversing his speech and I thought, too, that I owed it to the Opposition to do so.

Senator VINCENT:
Western Australia

– I shall add only a brief word to this argument because I realize that there is a guillotine on the debate. I have not had the advantage of listening to the whole of the debate, but I have listened with great interest to a portion of it and I think I have understood the attack by the Leader of the Opposition (Senator McKenna). I merely rise to put a question to the honorable senator. I may be wrong but I understand that the ground of his argument is this: He is postulating that the moneys raised by way of revenue by the Federal Government and loaned to the States at attractive interest rates should have been given to the States as a gift or as interest-free loans. I put that to him and I think that he concurred.

Surely the whole fatal weakness of that argument is this: We have a joint Federal and State authority, the Australian Loan Council, whose responsibility it is to raise loans. If the States were at all times aware that they could obtain gifts or interest-free loans to the extent that the Loan Council failed to raise loans, how much money would that council be seeking to raise by way of loan from year to year? I think I make that point clear.

Senator McKenna:

– It is a simple arithmetical question.

Senator VINCENT:

– The States are only human. I think it is quite elementary to arrive at the conclusion that none of the States would be very anxious to ask for loan funds if they knew that, ultimately, they would get money from the Commonwealth, free of interest or by gift. Surely that is the situation as the States would see it. Surely that is the situation as the Loan Council would see it. Surely that would completely wreck the whole structure of the Loan Council. I put that to the Leader of the Opposition because I believe, from the little I heard of this argument, that that reveals the fatal weakness of his proposition. Where does the Loan Council fit in with his argument? Surely it would cease to exist as a body. No loan funds would be raised at all.

Senator McKenna has argued that one of the grievous sins of this Government has been a disinclination to attract money by way of loan. If we were to adopt Senator McKenna’s proposal I suggest that no money would be raised at all by loan. It would all have to be raised by revenue and would have to be given to the States as a gift or as interest-free loans. I put that to the Senate because I feel that there lies the fatal weakness in the arguments raised this morning by the Leader of the Opposition.

Senator WRIGHT:
Tasmania

.- I do not wish to take much of the twenty minutes that is left for this debate under the inexpressibly contemptuous guillotine procedure. I rise only to note that an argument of great thoughtfulness has been put by the Leader of the Opposition (Senator McKenna) and that the time limit will exclude honorable senators from discussing if adequately. The fact that, as I have said, only twenty minutes remain for this debate and in that time the Minister, presumably, will reply, is sufficient commentary on the application of the guillotine procedure in a sensible and purposeful assembly such as this.

I have taken note of what the Minister for National Development (Senator Spooner) has said this morning. So far as I have been able to check the statistics that he cited, I am not satisfied that they are even accurate. Viewed independently of other debate in the chamber in relation to cognate matters, they are misleading. Finally, if the Minister, who is also Leader of the Government in the Senate, believes that the Senate agrees that the guillotine is a proper procedure to use in dealing with the estimates in this chamber, I can assure him that the Government will find itself lacking in support.

Senator MATTNER:
South Australia

– I was particularly interested in what the Leader of the Opposition (Senator McKenna) had to say on this question of financial relationships between the States and the Commonwealth. I think it is fair to say that we are dealing with practical politics and I think that Senator McKenna’s comments were divorced from practical politics. His argument was that the Commonwealth, over the past few years, had. offended against a financial ideal.

Getting back to practical politics and practical results, we are one people inAustralia. We have our State and Commonwealth Parliaments and whatever laws are passed by those Parliaments have tobe obeyed by all the people. I am delighted, to think that the Commonwealth has been able to raise this money for public works. I am pleased that the Commonwealth doesnot pay interest on the money, and I am pleased that we have charged the Statesinterest on their £576,000,000.

Senator O’Byrne:

– You are easily pleased. ^

Senator MATTNER:

– I am. The Opposition always charges us with being inflationists, but Senator McKenna admitted to-day that what we have done in this respect has been deflationary.

Senator Wright:

– In one passage he did say that.

Senator MATTNER:

– He said it has been deflationary. So, while on one hand the Opposition says that the Government’s policy is inflationary, on the other, it claims that it is deflationary.

Let us get down to hard facts and deal with Senator McKenna’s figures. He said that Commonwealth public works had absorbed £1,084,000,000. He called it a capital levy. I do not care what he calls it. I do not call it the same thing. He also said that we had contributed £576,000,000 to the States. We are one people. We are only following the practical idea of paying about 33 per cent, as a deposit and leaving 66 per cent, for posterity to pay. That is adopting an Australia-wide outlook. We are all one people.

Senator Wright:

– But it is because of that that Sir Thomas Playford argues that it is inequitable.

Senator MATTNER:

– I am not worrying about what Sir Thomas Playford argues. I am entitled to my opinion, and I say that this practice is equitable. I do not suggest that my opinions carry as much weight as do those of Senator Wright and perhaps Sir Thomas Playford, but my views do carry weight with the ordinary people with whom I associate - the taxpayers who provide this money.

We have to realize that, if it is good for the taxpayer to pay for some of his capital works out of revenue, it is good for this Government to do so. I do not agree with this idea of putting everything on to posterity. Over the last ten years, under the administration of this Government, we have had abounding prosperity, and if we cannot pay for some of our capital works out of revenue when we are prosperous, how are we going to pay for them when we fall on hard times and do not have nearly as much revenue as we have had in recent years? After all is said and done, I take it that the States have some capital investment. I suppose that they have some assets that they can show for the expenditure of this money.

Senator McKenna compared the relative positions of the States and the Commonwealth in 1939 with their relative positions at the present time. In 1939, the public debt of the Commonwealth, apart from war debt, totalled approximately £131,000,000. and the public debt of the States was about £897,000,000. At 30th June, 1959. the Commonwealth’s public debt was some £502,000,000 and the public debt of the States totalled approximately £2.391,000,000, which included £576,000,000 that the Commonwealth had advanced to the States. If we add the £1,084,000,000 that the Commonwealth has spent out of revenue, according to Senator McKenna’s figures the Commonwealth’s public debt totals about £1,586,000,000, compared with the figure of about £2,391,000,000 which I have given for the States. In other words, Senator McKenna says that it is wrong for us to save interest by spending £1,084,000,000 out of revenue and that we should nay interest on every penny that is expended on capital works. He growls about us saving £50,000.000 or £60.000.000 in interest by spending £1.084,000.000 out of revenue.

Senator O’BYRNE:
TASMANIA · ALP

– But the Government does not pay it to the taxpayers.

Senator MATTNER:

– Let us get this right. Does the Australian Labour Party want to borrow all the money needed for capital works and is it prepared to pay interest on the lot? Apparently, that is its attitude, because Opposition senators say it is wrong for us to save the country at least £50,000,000 or £60,000,000 in the way which 1 have indicated. I think these methods are right. I wholeheartedly support this Government’s policy of paying for capital works out of revenue. However, I do not want to attempt to delude the people by suggesting that we are paying for all the capital works in Australia out of revenue. We are paying interest on at least 66 per cent, of the funds expended on capital works, and we still owe the principal.

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

– Mr. President, the speech made by Senator McKenna a little earlier was really a reply to a speech that I made some days ago at an earlier stage of the consideration of this bill, and was, in fact, a close analysis, in many respects, of figures to which both he and I had referred at that earlier stage. I point out to the Senate that in the period since I spoke Senator McKenna obviously has had an opportunity to look at those figures again. For my part, I would not have him think for a moment that I wish to evade any of the issues raised by him, but I think he will agree that I, too, would want some little time to look at the figures in order to answer effectively some of the points that he has raised. I can assure Senator McKenna that I shall examine these figures and that I shall advert to them again at some appropriate time. Therefore, I shall at this stage refer to only one or two of the general issues with which he dealt.

I am sorry if the fact that I went back to a period earlier than that to which Senator McKenna referred gave him any offence. I certainly did not do it in order to mislead him or the Senate. As I said at the time, I did it merely in order to throw into a more correct perspective the figures of loan raisings and the like over a period. I said at the time that the distortion caused by raisings of war loans would have to be taken into account if any sort of a comparable analysis was to be made, I then proceeded to make such an analysis, and I went back for a period of ten years prior to the Second World War in order to obtain figures to support the argument which I then presented to the Senate. I repeat that, as I made quite clear at the time, this action was not designed to mislead or to do anything except throw greater light on a problem which cannot properly be looked at over a short term of years, particularly when, in that short term of years, distortion has been caused by the difficulties of war finance.

Senator McKenna dealt also with my reference to the financial methods adopted by the Chifley Government in respect of the retirement of treasury-bills. He referred to capital works over a period of four years and indicated the proportion of those works which had been paid for out of loans in two years. He then stated that this situation had not obtained in the other two years. Senator McKenna did not refer to the treasury-note movements in those years, to which my remarks were particularly directed.

Senator Vincent, I think, repeated an argument which I had advanced last week, but he used more force than I had used. He dealt with the situation with which the State Premiers would be confronted when they saw what they could regard as a legitimate opportunity to get money interest free instead of paying interest. I particularly want to refer again to the situation in respect of the loan market, which lies at the very root of the problem with which we are dealing. Senator McKenna never misses an opportunity to criticize this Government’s policy in respect of loan raisings. This morning, he accused the Government, among other things, of a lack of boldness. I hope to have time to deal with that accusation in a few minutes. For the moment, I want to indicate to the Senate that, if one wishes to examine the variations which have occurred in the loan market, one has to take not merely the period during which this Government has been in office. One must go back further than that. Before this Government came into office, the Labour administration, for policy purposes of its own - possibly it was due partly to miscalculation, but in the main it was for policy purposes - restricted investment and restricted the interest rates at which government securities were issued. This brought about a position that when restrictions were subsequently gradually lifted the face value of bonds was destroyed because they had been issued at such a low rate of interest.

The government which came into office at the end of the Labour regime pursued a policy of gradually lifting, together with other controls, the rate of interest on government bonds. It was confronted with a difficulty caused by the fact that private investment was more attractive than government bonds even with the increased interest rates. Possibly the rate had not been increased fast enough to meet the occasion with the result that the face value of the bonds suffered. The root cause of this trouble was the controls that were exercised by Labour in the years in which it was in power. The present Government lifted controls on a market that wanted money for its own private expansion. The market had been denied that money for its private expansion because of the war and also because of the restrictive policy followed by the Labour government. The net result was that every penny available for investment found a happier home than was offered by the government securities of the day.

This underlines again and again the point that restrictive controls of finance, and of interest particularly, must inevitably disrupt the market and cause the type of situation which Senator McKenna described as a failure of the loan market, but which, in effect, is not a failure at all but a situation caused by a legitimate and very real absence of money necessary to finance the activities that an expanding economy such as Australia required in the post-war years, particularly in the years after this Government began to lift financial controls.

Senator McKenna spoke of a bold policy of loan raising. There has been no absence of a bold policy of seeking capital in Australia. Private enterprise, freed from control, has pursued a bolder policy than was ever pursued before in the history of Australia. We have seen the result of that policy reflected in the remarkable advances that have been made by the investment of private capital.

The PRESIDENT:

– Order! The time allotted for the consideration of the remaining stages of the bill has expired.

Question resolved in the affirmative. - Bill read a third time.

Sitting suspended from 12.45 to 2.15 P.m,

page 1507

NATIONAL HEALTH BILL 1959

Bill received from the House of Representatives.

Standing Orders suspended.

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

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

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

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

This bill provides for increases in some 140 items in the schedules of medical benefits. The largest increases are for major operations, where the Commonwealth benefit will in some cases be increased from £11 5s. to £22 10s. The benefit for many of the less serious operations will likewise be appropriately increased.

Whilst the increases in Commonwealth medical benefits will thus be implemented by this legislation, the increases in fund benefits will be effected in different ways, according to the particular circumstances of each organization. The largest medical benefits organizations in New South Wales and Victoria have agreed with my colleague, the Minister for Health, that they will soon introduce new tables providing fund benefits related to the new schedules of Commonwealth medical benefits, and contributors will be invited to transfer their insurance coverage to these new tables. Many of the other organizations will implement the new arrangement simply by making an increase in the rate of contributions payable by their contributors.

The amount of the increase in the rate of contribution will depend on the amount of the increase in fund benefits provided by each organization. This will vary from organization to organization. In many cases the organization will increase its fund benefit by the same amount as the Commonwealth benefit is being increased and, in these cases, the rate of contribution will rise by about 66. per week for a family and 3d. a week for a single person. In other cases the organization may increase fund benefits by amounts considerably in excess of the increase in Commonwealth benefits and where this is done the rate of contribution will, of course, have to be increased by a greater amount. Before the plan comes into operation on 1st January next, every contributor will be able to get exact information from his own organization regarding the cost of insuring for the new benefits.

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

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

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

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

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

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

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

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

The difficulty that has arisen in this matter is to establish a proper line of demarcation between hospitals and institutions of the type I have described. Because of the need to supervise these institutions, State health legislation requires them to be registered and varying classifications are applied from State to State. Even if these classifications were uniform, the fact of being required to register under State legislation does not mean that any one of these institutions is a hospital providing full hospital treatment.

Therefore it is necessary for the Commonwealth to apply its own criteria in deciding which institutions do, in fact, provide facilities and treatment on a basis comparable with that provided in public hospitals. In the act that was passed last year, this difficulty of definition was dealt with by excluding from entitlement to special account benefits, patients in the various types of institutions I have mentioned and also in “ institutions that provide accommodation principally for permanent patients “. This expression, whilst adequately defining the types of institution intended to be excluded, has been found to be too restrictive. The Government has accordingly decided to redefine this class of institution, and the new definition, which is included in this bill, will not include the expression “ an institution that provides accommodation principally for permanent patients “. The new definition will exclude benevolent homes, convalescent homes, homes for aged persons, rest homes and other institutions of this nature.

The effect of the new definition will be that special account benefit will, after 1st January next, be payable to patients in institutions which conform more closely to the conception of true hospitals. The new definition will, in addition, provide that individual patients in homes which are not eligible for recognition will be entitled to payment of special account fund benefit, when they can establish, first, that they were suffering from an illness or injury requiring treatment of the kind provided in public hospitals; and secondly, that the treatment provided was of a standard substantially equivalent to that which they have received in a recognized public hospital.

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

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

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

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

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

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

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

Under the general scheme, the position has been that there has been a limited list of drugs which the public generally has been entitled to receive free of charge. When medicines or drugs not included in this list have been prescribed by doctors, they have been supplied by chemists at the expense of the patient concerned - this expense varying from a few shillings in the case of the cheaper drugs to considerable amounts in the case of more expensive drugs. What the Government now proposes is, first, that this general list will be very substantially widened so that it will cover practically the same comprehensive range as the pensioner list, and secondly that a charge of 5s. will be made to persons other than pensioners for drugs prescribed by doctors from this general list.

Considerable advantages will flow from this arrangement. For instance instead of his present uncertainty, and sometimes anxiety, as to what it will cost him to obtain a drug or medicine prescribed for him by his doctor, every patient will now know what the cost will be. It will be 5s. or, in the case of cheaper drugs, the price the chemist charges.

I, of course, do not want to be understood to be promising that every prescription written for every patient will come within this new arrangement. In any scheme conducted by any government there would necessarily have to be some limitation of the range of drugs falling within it.

This new arrangement, however, will apply to a very great majority of the drugs prescribed in the ordinary course of their work by doctors for patients. Broadly speaking, the range of drugs will be the same as that covered in the British Pharmacopoeia - the generally accepted official publication - with such additions as are recommended by the expert committee of doctors and chemists, which is known as the Pharmaceutical Benefits Advisory Committee. There will be some exceptions, but for the most part these will be in relation to drugs which, in the opinion of this expert committee, are not appropriate for use, other than for the treatment of a restricted list of diseases.

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

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

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

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

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

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

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

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

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

Debate (on motion by Senator Dittmer) adjourned.

page 1512

THERAPEUTIC SUBSTANCES BILL 1959

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henty) 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 purpose of this bill is to make a machinery amendment to the Therapeutic Substances Act consequential on a similar amendment included in the National Health Bill, which I have just introduced.

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

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

Debate (on motion by Senator Dittmer) adjourned.

page 1513

APPROPRIATION (WORKS AND SERVICES) BELL 1959-60

Second Reading

Debate resumed from 20th October (vide page 1036), on motion by Senator Paltridge-

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The bill is one to appropriate £141,896,000 for the purpose of carrying out the capital works and services of the Commonwealth. That very large sum covers the whole of the works, with one exception. There is already a special appropriation of £45,000 to cover the cost of the conversion to standard gauge of the railway line between the Leigh Creek coal-field and Maree.

The Senate will recall that some months ago it concurred in passing a bill to appropriate £55,723,000 for capital works for the first five months of this financial year. It is not necessary to appropriate that amount again, but clause 4 of the bill purports to pick up the amount, together with another £86,173,000, and proposes that the two amounts, which give a total of £141,896,000 shall be appropriated and be deemed to be appropriated from the Consolidated Revenue Fund from 1st July last. So the bill before us picks up and re-affirms the other bill that we passed a few months ago.

The Second Schedule to the bill refers to what I shall call ordinary departments and services, to business undertakings and to Territories of the Commonwealth. It gives in broad outline the details of the appropriation under each head. For ordinary departments and services, the appropriation sought is £80,209,000; for business undertakings, £44,306,000; and for Territories of the Commonwealth, £17,381,000.

There has been circulated - and I compliment those responsible for its preparation - a document entitled, “ Civil Works Programme “, in which relatively minute details of these capital works are given. I do not propose to address myself more than very broadly to the details. The Opposition recognizes the need for works of this type, having regard to our expanding economy, our expanding population, the needs of our existing people and the need to provide in advance for the development of the country.

page 1513

QUESTION

F.9418/59.- £.-[«]

The Opposition has never opposed a measure of this kind, although from time to time questions have been asked regarding particular projects. It may be that some honorable senators will care to address themselves to those. At this stage, I shall merely direct attention to some of the largest items in the schedules.

For ordinary departments and services, the two outstanding items are approximately £6,000,000 for the Department of Civil Aviation - we applaud the work of that department and the progress it is making in opening up Australia - and approximately £60,000,000 for the Department of National Development The £60,000,000 for the Department of National Development is made up of two items only - £35,000,000 for war service homes, and £25,600,000 for the Snowy Mountains hydro-electric power project. The Opposition, of course, has no quarrel with the provision of adequate sums for both those purposes.

Turning now to business undertakings, we find that the huge appropriation of £39,406,000 is sought for the PostmasterGeneral’s Department. The bulk of that amount, £25,000,000, is to be expended on telephone exchange services. I think everybody in Australia will applaud the provision of adequate telephone facilities. Telephone facilities are being modernized and extended, but, despite the very best efforts of the Postmaster-General’s Department, the provision of telephones still lags behind the need. It is comforting to know that this very large amount of money is to be devoted primarily to the purposes of telephone exchanges. The appropriation sought for trunk line services is £8,000,000, and for broadcasting and television services, £3,678,000.

Turning to Territories of the Commonwealth, we find that £12,381,000 is to be expended on the Australian Capital Territory in this year. Of that amount, £11,000,000 will be made available to the National Capital Development Commission. A great part of that £11,000,000 will go for the building of homes, particularly for defence personnel who have been transferred to Canberra in recent times. To supplement our consideration in relation to that particular amount, there is available to the Senate the latest report of the -National Capital Development Commission, for the year ended on 30th June last.

The Opposition does not oppose the measure.’ This appropriation of more than £140,000,000 from Consolidated Revenue raises again the question I have raised many times in this place, that is, the burden that is being placed upon the taxpayers by requiring them to find for permanent capital works such a huge sum in one year. I addressed myself to that matter from this place when the Appropriation Bill 1959-60, that we passed this morning, was being considered, and again on the motion for the third reading of that bill. On many other occasions, also, I have adverted to that theme. I feel that I should be trespassing on the patience of the Senate if I resurrected it in any detail. So, I ask anybody who wishes to pursue anything I said on the other bills to deem me as incorporating my remarks on this subject, during the debates on those bills, in my present remarks on the same subject.

I have no doubt that honorable senators will display interest in this measure at the committee stage, when detailed projects are under consideration, so I content myself at this stage with indicating that we on this side offer no opposition to the passage of the measure.

Senator WRIGHT:
Tasmania

– This being a measure that seeks the appropriation of moneys for capital works and services, and not one to finance the administrative services of the Government, it is amendable by this chamber as well as, of course, being subject to rejection. It demands, therefore, I think, consideration in respect of the particular items in the schedule, and also of where we are getting to in this matter of the vote for capital works.

This morning I submitted more readily to the distorted and ill-directed debate, on another measure which was subjected to the ill-advised parliamentary procedure of the guillotine, because I knew that in the debate on a measure of this sort the principles that were earlier discussed by Senator McKenna, whose speech was briefly replied to by the Minister, could be referred to. I am not going to follow Senator McKenna’s figures through all their maze, because I believe that when you approach the question of assessing the public debt, whether State or Federal, individual or aggregate, you find that it is an almost imponderable subject and that figures can confuse, as they can defy elucidation. However, I shall take one particular aspect of the figures that Senator McKenna used in his argument.

He said that in the fifteen-year period since 1944 the public debt of the Commonwealth had remained fairly static, and that since 1949 it had diminished to a degree, whereas the public debts of the States had risen in the same period to a very high aggregate amount on which interest had to be paid, and these interest payments constituted a very heavy burden on the States. It is only fair, when considering that trend, to take account of the fact that the Commonwealth, between 1939 and 1945, had the responsibility, peculiar to it, of carrying on the war. In that period the Commonwealth Government’s debt increased, according to my recollection, something like four-fold. That figure may be wrong, but at least it increased terrifically. It may be said, therefore, that if in war time the Commonwealth has to bear the responsibility for great capital expenditure, and its public debt thereby increases, that is simply one of the hazards of a war period. On the other hand, it may be said that if in peace time the States, retaining their prime responsibility for development, find it necessary, in accordance with their policies - the wisdom of which they are the sole judges and for which they are politically responsible - to increase their public debts, that is a proper political responsibility for State governments to carry. Surely we are not advocating that, while the State governments claim the right to exist as State governments, we should disburse money to them from the Commonwealth Treasury with complete irresponsibility.

The public debt of a State is something that the government of that State has contracted for on behalf of the State. Indeed, the State governments have been fortunate in finding such generosity as they have found in the Commonwealth Treasury in the post-war years, when the loan market has not been strong enough to supply all that is demanded of it. In view of the condition pf the loan market the .Commonwealth has been willing to supply, out of Consolidated

Revenue, the deficiencies in State loans. Just because the States have had a fairy godmother in Canberra who. is willing to make funds available to them, what argument is there for the States not properly servicing their public debt and repaying it on the basis of proper sinking fund arrangements, taking into account the payment of interest? I would be sorry to see anybody yield to the argument that as between the lender - -the Commonwealth - and the borrowers - -the States - there was substance in the plea that the States should get loans without interest or should receive the money, instead of by way of loan, by way of reimbursement grants or something of that sort.

I put forward that argument, Mr. President because I want to remind the Senate that on not one occasion, only, but on several, I have asked for consideration by the Government of the whole position, lt would certainly not be premature to give such consideration now, and I would say that it reveals a drifting disregard of the obvious tendency towards irresponsibility in public finance that it should not have been given urgent consideration before 1959.

The Commonwealth Government has seen inflation developing rapidly. That means that there has been sufficient money in the economy - in figures - to be whipped up to balance budgets without regard to proper principles of responsibility as between borrower and lender. If that is going to continue, and if we are not going to establish responsibility as between borrower and lender, there is no answer to the argument advanced by Senator McKenna - an argument which I stoutly contest. The establishment of a basis of responsibility as between borrower and lender is the only answer. If we are to continue to ask this Parliament to appropriate out of Consolidated Revenue moneys derived from taxation that we exact from the people, in order to enable the States to finance their capital works programmes, and if that is to be the settled policy pf the Government, it is, in my opinion, fatuity inexpressible to hold that the Commonwealth has no title to that money that could justify it in charging interest. The Commonwealth raises the money as revenue from the very same taxpayers as those to whom the States which borrow the money must look for the payment of interest on it. What an endless cycle of irrationality! It is like a do;> chasing its tail. The taxpayers, as residents of the States, are to be taxed to raise the interest that the Commonwealth is demanding to be paid to it. On what? On money derived from taxes that it has already exacted from the same taxpayers.

We have submitted to this heavy and growing load of taxation with comparatively little groaning, and it is apparently going on without very much sense of direction just as an indefinite policy of drifting. The Government has adopted the easiest course. A reference to page 7 of the statements attached to the Treasurer’s Budget speech shows that in the period from 1951-52 to 1958-59 we have provided out of revenue, for State capital works programmes, an amount of £674,000,000. During the same period £797,000,000 has been raised by way of loans. A comparison of those two figures is most interesting. In the rough and ready way in which I make use of these figures, it is about 50-50. There is not much difference. A little more than half the total is the product of loans; a little less than half the product of taxation.

In addition, we must remember that the settled policy of the Commonwealth Government since 1949 has been to finance capital works out of revenue. Taking this into account, we find that the Commonwealth has drawn from Consolidated Revenue Fund in that way, during the period in question, an amount of, I think, £1,080,000,000. That which has been made available for State capital works and that which has been used for Commonwealth capital works has been the product of Commonwealth taxation. In the days of Pym and Hampden we would have used the term “ forced loans “ in referring to this kind of practice. It is not, in its nature, different to-day because it is covered by an act as complex as the Income Tax and Social Services Contribution Assessment Act. The taxes are taken from the people out of what is called their incomes, but by reason of the wide scope of the taxation legislation, capital manoeuvres, capital transactions, are, as we know, in many cases taxable under that act just as income is. But in any case this amount of money, raised by taxation, has been used for capital works.

I thought that the only defensible principle in this field of public finance involved the idea that in order to prevent excessive demands on the economy of a particular period, you forecast the producing life of the projected public asset, and then, having added interest to the capital over that period, worked out a programme of payments, using a sinking fund, so that the whole amount would be repaid at the end of the period. By this means, the expenditure could be distributed among the people who enjoyed the benefit of the capital work. This obviously has sound common sense to recommend it, and a departure from it I have not yet heard justified, except on this basis, “ We are in the swim with everybody else in post-war inflationary Australia, and as the money is good and we can keep an inordinately high rate of taxation in operation, let us get the money in this way, and not bother about spreading it over the proper amortization period “. But if we are to accept responsibility for the economy of the country, and if we have a fair sense of equality and equity in the imposition of taxation, then I submit that if people cannot be persuaded voluntarily by the ordinary attraction of Government loans, to provide the necessary money, and if we have to resort to our compulsive power of taxation, then people should be credited, as part of their individual savings, with so much of the taxes paid as are required to construct the particular asset.

I am amazed, Mr. President, that people of purposeful ideas in politics can be so blind to the opportunity of establishing this principle, particularly when they hear advocacy of it - although, perhaps, not going the whole way - from the Leader of the Opposition (Senator McKenna). We cannot defend a policy of transferring to public ownership in a period of eight or ten years £1,500,000,000, that amount being over and above the revenue requirements of the Government, and using it for State and Commonwealth capital works, while denying ourselves the opportunity of establishing credits for the individual contributors. These are the people for whose liberty and enterprise and independence we stand, while opposing the development of the monster state, in which bureaucrats, with the terrific power that the control of public property gives them, can confront us and add to their political power while controlling and directing the ordinary citizens in the community.

This morning Senator McKenna stated that the Government’s policy is inflationary, but when challenged by my colleague, Senator Vincent, he claimed, at a later stage of his speech, that it was deflationary. I may not be doing his expressions of viewpoint complete justice; I just want to recall the passage of the debate that evoked my interest. All I want to say is this: I want, to be shown, in the simplest language and in the humblest of terms, how a policy of this sort can be deflationary. We earn in a year, Mr. President, a certain amount of money over and above that which people desire to save or invest. The Government, with a certain measure of responsibility, says that it will commit the country to an expenditure of, say, £100,000,000 for Commonwealth public works. It then increases the amount of income tax taken from the people by £100,000,000, not to be frozen in a Government account but to be spent by the Government. It seems to me to beggar expression to say that such a process is deflationary, because in those circumstances if I were a retail draper and I knew I would have to pay more income tax next year, I would put up the price of my calico by say Id. a yard, and embroidery by, perhaps, 3id. a yard. So the members of the public would have their costs increased. The greengrocer next door would add another 3d. on the price of cabbages. People who wanted Holden motor cars would have to pay another £10 for them. So there is the constant competition in costs. One of the most savage elements of the Australian cost structure is the taxation element. How it can be deflationary, I am at a loss to understand.

I was particularly interested, Mr. President, in Senator McKenna’s suggestion this morning that we might avoid the necessity to meet the responsibility to underwrite State loans in the future if we made Commonwealth loans more attractive by increasing the income tax rebate. My mind went to a proposal, which, I think, was current in Germany after the war, to allow as a deduction from taxable income amounts invested in housing. Of course, Senator McKenna’s proposal is only an extension of the principle - let me say that I am not convinced as to the wisdom in its inception - that has been current for many years, of giving a taxation rebate of 2s. in the £1 on interest derived from amounts invested in Commonwealth loans. That is not very helpful to the man who has only £500 to invest, but it is fairly attractive to the person who, out of the current year’s income, has £10,000 or £20,000 to put away. A special premium is put on large investtments in that way. But as Senator McKenna pointed out, although you lose in income tax, insofar as you reduce loans you relieve the Budget of the necessity to meet the deficiency in funds for State capital works.

I am not adopting the principle, but I do not think we should instinctively turn a deaf ear to it. All through this inflationary period, when certain arguments were being put up for the improvement of the loan market and people said, “ We ought to follow the actual demand of the money market by maintaining the value of our bonds at par “, the answer was: “ Oh, no.

We have issued them on such-and-such terms. They have to take their chance in the ruck of the market. If they are deflated to-day to £80 or £90 per £100, that is just too bad “. Am I wrong in seeing the adoption of that very principle in regard to special bonds? Is there not a guarantee that after a certain date a subscriber will be paid, on request, the par value, and so relieved of the fear, that he would usually have, of a capital loss if he had to realize on his investment before it matured?

I want to add one or two other matters, Mr. President, in the unrestricted freedom that I enjoy in the absence of a guillotine over my head. An inordinate proportion of post-war budgets, both State and Commonwealth, has been represented by capital costs in connexion with housing programmes. Immediately after the war, it was recognized that housing was a great public problem, largely as a product of the war. A tragic factor contributing to the insufficiency of the loan market is that governments, as a matter of political policy, persist in thinking that their first responsibility is to build houses for the people, on the same basis that it was thought, in the time of Nero, to be good politics to distribute bread to and stage games for the populace. To do that starves a government of money that should be available for schools, roads, hospitals and other undoubted public responsibilities.

I am not suggesting that, after a war such as that in which we were involved, and after the development of an immigration programme that is vital for the creation of strength and population in this country, the Government should cease to have any interest in pursuing such a policy. But if emphasis could be placed on the need to reduce expenditure on housing year by year, automatically and correspondingly money would be released for other items of expenditure which are unquestionably public responsibilities.

My next comment, Mr. President, is a passing one. I merely want to say that my interest in the parliamentary control of this kind of vote is still persisting. I ask honorable senators to scrutinize the schedule to this bill. If they do, they will see the number of projects that come within the new principles to be embodied in the Government’s decision in regard to the Public Works Committee Act. It is interesting, I think, to notice the number of schools and other projects that are to cost £50,000, £150,000, or £200,000, and how few are to exceed £250,000. I mention here that it is expected that provision will be made that any work costing more than £250,000 will be referred to the Public Works Committee. I had noted the Post Office for special reference, but no doubt it will be possible to refer to that matter when we are dealing with the schedule at the committee stage.

The fifth matter to which I wish to refer is the proposed vote for the National Capital Development Commission. As I understand the position, the works under the control of the commission, included in the list of civil works that the Minister has been good enough to circulate, are the subject of appropriation in this bill. I seek information from the Minister on that point. The last thing I want to say, by way of addendum to my speech, concerns the proposed Government Printing Office in Canberra. I have not been able to find in the bill any item dealing with that matter. Having regard to the answer given to me by the Minister yesterday, to the effect that a contract would not be let, nor would tenders be accepted, until parliamentary approval was given; I now ask the Minister to correct me if I am wrong in assuming that there is nothing in connexion with that work in this bill.

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

– There is only one matter, of the five . that Senator Wright referred to, to which I want to address myself. 1 think it will bear some examination. It is nothing new for the Honorable senator to advocate in this chamber that amounts spent on Commonwealth capital works from receipts from taxation should be provided by means of special interest-bearing bonds. I had the temerity to ask him one night whether the bond should bear interest. He was not in as placid a mood as he is to-day, and he shouted in reply, “ Of course it is to bear interest! “. I shivered, but I accepted the information.

I think that our present system is based on a very sound principle. I completely disagree with the honorable senator’s approach to this problem. Let us examine the first stage of it. Let us deal with the £112,000,000 of tax money which we propose to use for capital works. That is the amount by which we are short and which it is suggested we should raise by way of loan. The alternative to not providing it in the way we propose is not to undertake the proposed works. Failure by the Commonwealth to spend £112,000,000 in the year on necessary capital works would, of course, mean an increase in unemployment. But that is not the point. I merely mention this to illustrate why we adopt the policy we have applied.

Let us examine the proposal to convert this £112,000,000 into interest-bearing bonds. I do not agree with the claim that every generation should pay for the facilitie it creates. Why, our grandfathers and great-grandfathers created facilities which we are quite happy to use to-day, and they paid for them long ago. We, in turn, are creating facilities which our children and grand-children will be using. As the world advances and progresses, they, in their turn, will be , creating and paying for facilities which their children will use. I do not accept the proposal that we should spread over 50 or 60 years the payment for facilities which we are creating.

All the institutions with which I have been associated during the whole of my public life have followed the principle we propose to follow here. The capital charges for all the works carried out by the local authority of which I was a member for many years were paid out of revenue. By following that policy, that council’s rate of payment of interest out of its revenue was the lowest of any local authority in Tasmania, and we were very proud of the fact. It is a sound principle.

Senator Sheehan:

– What was your property rate?

Senator HENTY:

– It is ten years since I served on that council. I cannot remember the rate, but that is really of no consequence at the moment.

We propose, to appropriate, out of Consolidated Revenue £112,000,000 for Commonwealth capital works, and the honorable senator has suggested that this £112.000,000 should be put into interestbearing bonds. If we adopt his suggestion how do we locate the appropriate taxpayer? Is this money to come out of income tax? Does npt the man who has a glass of beer - bless his heart! - pay taxes into, the pool of revenue, from which the £112,000,000 is to come? Of course he does! Does not the man or woman who buys goods and pays sales tax on them also pay into the pool?

Senator Benn:

– My oath they do!

Senator HENTY:

– Of course they do, and they pay it irrespective of whether a Labour or Liberal government be in office. It would not be possible to identify the taxpayer in order to give him a bond. When a man buys a glass of beer, is it proposed that we shall hand him a 3d. bond over the bar counter? When a man buys a motor car, is he to be given a £20 bond? When we examine the proposal we see at once that it is financially absurd.

Our system of paying for capital works out of revenue is a cost-reducing system. Senator Wright says he cannot understand how it can be deflationary. It is costreducing because we pay no interest on the amount of money we spend.

Senator Cooke:

– The public pays the £1 12.000.000.

Senator HENTY:

– We are both aware that the taxpayers pay this £112,000,000.

Senator Cooke:

– That is right.

Senator HENTY:

– If the honorable senator will allow me to put my case he will have every opportunity of rising and putting his case. The £112,000,000 is taken from the people and used to finance public works. Thereafter, liability for the amount disappears. We are not faced year after year with both redemption and interest payments.

Senator Vincent:

– That is the deflationary element of the system.

Senator HENTY:

– Of course. If the cost were spread over. 25 years, the public would be faced with the repayment of both the original cost and the payment of interest.

Senator Cant:

– You have taken a long time to find that out.

Senator HENTY:

– We have been in government since 1949, and we have been doing this since 1949, so it has not taken us a long time to find it out. I admit that this was not done by any previous Government, but we have been following this policy ever since we came into office in 1949. I think it is a perfectly sound principle of finance. It has my full support and has had it for years. I see nothing wrong, nothing un-Liberal, as it has been called, in it. ButI do say that Senator Wright’s suggestion is a completely unsound proposition for the simple reason that it would be impossible to identify the taxpayer. Even if the taxpayer could be identified, what would it mean? It would mean that the large taxpayer would get a very nice interest-bearing bond and the small taxpayer would get a bunch of rhubarb! That is what it would amount to. The honorable senator is arguing that we should provide for the large taxpayer and not for the small taxpayer.

Let me take the matter a step further to show how financially ridiculous this proposal is. If the £112.000,000 were converted into interest-bearing bonds, the interest bill would be approximately £6.000,000 for the first year. In two years, the extra cost would be £12,000,000, and in five years it would be £30,000,000. All of this would have to be added to the original £112.000.000. Where would we get this extra money? We would have to get it from the taxpayers. So, in effect, under the honorable senator’s proposal, we would say to the taxpayer - if we could identify him - “Here is an interest-bearing bond, but we are going to take money out of your pocket so that you will be paying interest to yourself”. Surely honorable senators can see how completely financially unsound the proposal is. It would be completely inflationary to increase Government expenditure in that way.

Senator Armstrong:

– Interest is inflationary.

Senator HENTY:

– You do not like interest; you do not like profit. I understand your mentality. It is not very high. I am building a case on facts. I rest my case on these two points: The proposal is ridiculous because it would be impossible to identify the taxpayer. If he could be identified, then the proposal would mean an increase of £6,000,000 a year in the Commonwealth’s expenditure and in the long run we would have to take from the taxpayer the money required to repay the taxpayer. At the same time, we would be charging him income tax on the extra revenue he earned by way of interest on the bond, and it is probable that, when the taxpayer died, this extra income would put his estate into a higher bracket for probate purposes and we would take additional money in probate duty. I am sorry, but I cannot have a bar of the honorable senator’s proposal.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator SHEEHAN:
Victoria

.- Division No. 955, “ Postrnaster-General’s Department”, makes provision for four items of expenditure. During his secondreading speech the Leader of the Opposition (Senator McKenna) referred to one of them, “ Telephone Exchange Services “, for which £25,000,000 is provided. I agree that it is very satisfactory that this amount should’ be provided. The other items in Division No. 955 are “Trunk line services “, “ Telegraph equipment “. and “ Miscellaneous plant and equipment “. I would like to know whether it is proposed to extend or to improve the telephone exchange services. I know that in the cities the main telephone exchanges, and the subsidiary ones in outlying suburbs, are mostly automatic. I hope that,’ included in this amount is provision for the extension of automatic exchanges to country centres. In my own State of Victoria, the Postmaster-General’s Department has recently installed an automatic exchange in the City of Bendigo, and I understand that the installation of another in the City of Ballarat is to be undertaken in the very near future. I am wondering whether any amount has been included for the provision of such exchanges in large provincial towns or burroughs. For instance, I would like to see an automatic telephone exchange installed in my own town of Castlemaine, because the telephone service there is growing, and we would appreciate very much an automatic service. There are other towns of equal importance in Victoria, and I wonder whether provision has been made this year for the installation of automatic telephone services in those places. Possibly the Minister representing the Postmaster-General could let us know exactly what is happening in that respect.

The sum of £550,000 is provided for telegraph equipment, but I can find no provision for new telephone installations. Possibly, this is included in some other bill, but in view of the lag in the installation of telephones I should like to be assured that the department is doing everything possible to rectify this deficiency.

Each year an amount of money is placed on these Estimates for broadcasting and television services. In this bill, £480,000 is provided for engineering equipment and services for sound broadcasting, and £750,000 for television transmitting equipment. Television studio equipment is apparently provided for under the vote for the Australian Broadcasting Commission. Who reaps the benefit of this money which is paid out by the community for the development of television and broadcasting? What returns does the Government or the Postal Department receive other than the licence-fees which are paid by the listeners? Do any of the commercial broadcasting stations, out of their advertising revenue, contribute towards the development of broadcasting or of television or is the whole cost of improving and developing broadcasting and television borne by the community through taxation? These are matters on which I would like the Minister to inform me, if he can.

Senator McMANUS:
Victoria

.- The Commonwealth Serum Laboratories are referred to under Division No. 881. Honorable senators who have attended the Civil Defence School have been told that leading officers of the defence medical services have recommended that the Commonwealth Serum Laboratories be decentralized. The Government has taken exactly the opposite view. When, recently, it was decided that facilities should be increased, the Government increased them in the one place in which the laboratories are to be found at present - at Royal Park in Melbourne. I remember hearing one of the top medical officers of our defence forces telling us that it would not take an atomic bomb but only an ordinary bomb - one piece of sabotage - to destroy the Royal Park laboratories and that Australia, in a crisis, could be left almost entirely without such services. He said, in dealing with civil defence as well as other forms of defence, that medical officers associated with the defence forces had asked that the facilities of the serum laboratories be divided up so that one ordinary bomb - one piece of sabotage - could not leave Australia without these facilities. With regret he told us that, apparently, the recommendation had been ignored. Here we have evidence that that is so. The sum of £257,000 - over a quarter of a million pounds - will be spent on the purchase of equipment and its installation at Royal Park.

We have had a lot of complaints about the failure of Australian governments –to do anything about civil defence and some people have said that it is useless to try to do anything about it because it would not be possible to raise the money needed to do anything effective. Others have said there is no danger of our ever suffering an atomic attack. But as we saw in the last war, there is every danger of some kind of attack and I cannot, for the life of me, understand why, when high defence officers in the medical service say to the Government, “ Please, from the point of view of civil defence, set up serum laboratory facilities in some other part of the Commonwealth so that they cannot all be knocked out at one blow “, the Government ignores that and adds to the existing facilities in Melbourne. I hope that next year we will find the Government has grappled with this problem and taken the action which is obviously needed in the interests of civil defence.

Senator BRANSON:
Western Australia

– I wish to refer to Item 2, “Television transmitting equipment, ?750,000”, under Division No. 963. Yesterday I made a suggestion to the Minister for Repatriation (Senator Sir Walter Cooper) that a booster relay transmitter known as the “ Adler “ be installed experimentally at Mount Bakewell, York, in Western Australia. The Minister in his reply to me stated -

As honorable senators are aware, the third phase of television in this country - its extension to country centres - is now receiving attention. At the moment, the applications that have been received for television station licences are before the board, which is conducting a public hearing.

The point that I want to make, Mr. Temporary Chairman, is that my suggestion has no relation whatever to phases 1, 2, 3 or 4. I did not suggest that applications be called for this. My suggestion was that the Australian Broadcasting Control Board put one of these units on Mount Bakewell in order to try it out.

The same kind of confusion has arisen in letters that have been sent out by the board. As far back as 8th June, and again on 21st September, this suggestion was put to the board, which replied in a similar vein, stating -

As you are no doubt aware, a public inquiry into applications for the grant of licences for commercial television stations in a number of country areas will be commenced by the Board in the near future. The type of equipment which will be used by licensees of commercial stations in such areas is a matter for the individual licensees to determine, subject to compliance with technical standards determined by the Board, and the type of equipment which will be used will not be known until the public inquiries are completed.

The confusion appears there again. The board said nothing about phases 1, 2, 3 or 4.

The Minister stated -

The Australian Broadcasting Control Board, I understand, is considering the provision of a booster or other mechanical device for the purpose of improving reception.

Mr. J. 0’Kelly. who is the Secretary of the Australian Broadcasting Control Board, in a letter dated 22nd October, wrote - . . the Board is of the opinion that it would be premature at this time to consider the purchase of equipment as insufficient information is available to assess the characteristics of such equipment were it proposed for use in any location.

Surely, when there are some 200 of these units operating throughout the world - there are more than 100 in the United States of America - this information could be readily obtained, Sir.

I just ask the Minister: Will he assure me that he will ask the Postmaster-General (Mr. Davidson) to speed up any inquiries that the Australian Broadcasting Control Board may be making in respect of these units, so that country people who at present are being penalized, and who will be penalized until 1962 in Western Australia and in certain areas of South Australia, can obtain the benefit of this excellent medium of entertainment? I think that these people are far more entitled to television than are we who dwell in the cities. We have a variety of entertainments. I should say that, in the country, television could be one of the greatest forms of entertainment that we could give to the people. I ask the Minister: Will he pursue this subject with the Postmaster-General?

Senator Sir WALTER COOPER:
Minister for Repatriation · Queensland · CP

[3.49]. - Mr. Temporary Chairman, I want to answer several of the questions that Senator Sheehan asked relating to the Postmaster-General’s Department. He referred to Division No. 955, item 3, telegraph equipment. I am informed that, in previous years, this item included both telegraph equipment, and miscellaneous plant and equipment. For the financial year 1959-60, separate provision is made for these two classes of equipment. The provision of ?550,000 for telegraph equipment represents nearly ?1,500,000 less than the actual expenditure made in 1958-59. The difference, I understand is now shown in item 4, miscellaneous plant and equipment, this having now been separated from telegraph equipment, which is shown under item 3. That is the reason for the difference in the amount under item 3 this financial year.

Senator Sheehan also asked about the moneys received from licence-fees for television and radio broadcasting stations. I understand that a total of about ?10,000,000 was received, last financial year, in respect of licence-fees for television and radio broadcasting stations, and in respect of regional stations and Radio Australia, and that, as with other revenues of the Post

Office, these moneys are paid into general revenue. Expenditure ran to about £9,000,000.

Concerning the question asked about the expansion of facilities in country areas, I should like to point out that the PostmasterGeneral’s Department recently issued a very informative booklet entitled “ Progress - Policy - Plans”, which indicates the plans of the Post Office over a long period. In that publication, the department explains that one of its main objectives is the general expansion of facilities - especially telephone facilities - in country areas.

Senator Wright:

asked whether there was any provision, this financial year, for the proposed new Government Printing Office building in Canberra. I am informed that no amount has been included as it is not expected that any expenditure will be made this financial year.

I turn now to Senator Branson’s request in relation to a booster apparatus for television at Mount Bakewell, near York, in Western Australia. I shall be happy to bring to the notice of the PostmasterGeneral (Mr. Davidson) what the honorable senator has said this afternoon.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Mr. Temporary Chairman, I propose to take only a minute or two. An honorable senator who cannot be present in the’ Senate this afternoon has asked me to raise one matter for him.. I think it could most appropriately be raised in respect of the item relating to Commonwealth offices and other buildings outside the Australian Capital Territory, which appears under Division No. 85 and Division No. 860. The honorable senator concerned directed my attention to the fact that, in the plans for the new Commonwealth office building in Melbourne, no provision has been made for the parking of cars. Other large buildings are tq be constructed on the site that the Commonwealth has acquired, and the honorable senator has put the view that, in modern times, with much congestion in cities, the Commonwealth should look ahead and provide, i,n basement areas- of one, two or more floors, if necessary- space for the people working in the building to park their cars. When we look at the public offices in Canberra, we see that they, are surrounded by great numbers of cars belonging to the officers employed within. We are fortunate,’ here, that there is a good deal of open space available. I ask the Minister: Has the Government considered this” matter of parking space? If the site permits, will it make provision, in. future, projects’ for the housing pf Commonwealth officers in the major capital cities, for the parking of the innumerable cars that are certain to be attracted to the vicinity of these office buildings? it seem to me that it is a matter of common sense to make such provision.

Senator Sir WALTER COOPER (Queensland - Minister for Repatriation) [3.55]. - Naturally I cannot give the honorable senator any definite information at the moment, but I shall bring the suggestion, which I think is very appropriate to the notice of the Minister for Works (Mr. Freeth). He will be able to see whether that provision has been made if it has not been made already.

I inform Senator Wright that the items listed under the National Capital Development Commission are covered by the appropriations that we are considering.

Senator WRIGHT:
Tasmania

.- The first matter I wish to raise has reference to the Attorney-General’s Department and in particular to the erection of the Commonwealth Arbitration Court building in Melbourne involving an expenditure of £690,000. Anybody who has visited that building cannot but be gratified at the splendid type of courts that are being erected. The usual orthodox approach in regard to furnishings and fittings has not been adopted. 1 visited the building from time to time during the last basic wage hearing and I noted that a great step forward had been made in the construction of these law courts. This should assist the performance of the work for which they have been constructed. I should like to know whether the estimate of the cost of the building was exceeded. I express gratification at the quality of the building and the fact that at last it has been completed.

The other matter to which I wish to refer is the erection of Commonwealth offices in Victoria and Queensland. According to the “ Civil Works Programme 1959-60”, the balance at 30th June, 1959, to be expended on the Melbourne offices was £33,853 and that remaining to be expended on the Brisbane offices was £1.759,047. 1 should like to ascertain whether the Melbourne structure has enabled him to release other accommodation in Melbourne. Will he let honorable senators know, on a basis that does not forget the distinction between capital and interest, just how the saving affected by the withdrawal from rented premises is servicing the capital involved in this structure?

While the Minister is on his feet, will he also be good enough to say what is the trend in Hobart, a city with which I am very familiar. Will he say whether there has been any withdrawal at all from the scattered and sparsely inhabited offices for which the Commonwealth Government seems dedicated to pay rent? Will he also inform the committee whether the programme for withdrawal from these tenanted buildings that the previous Minister for Works, Mr. Fairhall, was carrying out has been pursued in Hobart, and with what effect?

Senator GORTON:
Minister for the Navy · Victoria · LP

– The matter referred to by Senator Wright in reference to the Attorney-General’s Department does not come within the scope of the bill with which we are dealing. Under the vote for the Attorney-General’s Department £179,000 is set aside for capital works. None of that amount is set aside for the particular work about which the honorable senator was making inquiries.

Senator Wright:

– Will the Minister tell the committee where the finance for that project comes from?

Senator GORTON:

– The building has been completed and presumably has been paid for. The information given to me is that the £179,000 is made up of a sum of £114,000 for works in progress - that is, works begun last year and not yet completed - and the rest is for a variety of projects. I could give the honorable senator the details if he wants them, but none of them appears to have any connexion with the Commonwealth Arbitration Court building iri Melbourne.

Senator WRIGHT:
Tasmania

.- I do not desire to be testy. T Wish to remain placid in this discussion. If the Minister representing the Attorney-General will bear with me, 1 shall point out that the reason for my inquiry is that 1 note that the “ Civil Works Programme 1959-60” that the Minister circulated shows under the heading of “ Attorney-General’s Department “, that in respect of the erection of the Arbitration Court building the balance remaining for further expenditure on 30th June, 1959, was £26,086. lt surprises me that twelve months after partial completion of the building, no part of the amount outstanding is to be paid out of appropriations this year. I am not querying what the Minister was good enough to say in reply to my previous inquiry. I am just explaining quietly that I do not see that the question is cause for any impatience. The Minister has referred to the amount of £26,086 that is outstanding. 1 expect that it is wrapped up in some vote in this bill for this year, and I should be pleased if the matter could be explained to me.

Senator SPOONER (New South WalesVicePresident of the Executive Council and Minister for National Development) [4.51. - If we take the document, “ Civil Works Programme 1 959-60 “ and look at the page dealing with the Attorney-General’s Department, we see that the estimated expenditure for 1959-60 is £179,000. That is the figure which is given in the bill, under Division No. 855. If we look at the tabulation in the civil works programme document, we see how the figure of £179,000 is arrived at. I agree that this is a little difficult to follow. The bill shows that £179,000 is to be appropriated for works required by the Attorney-General’s Department, and page 11 of the civil works programme documents shows how that figure is reached.

Senator Wright:

– But how do you reconcile the £179,000 at the top of the page with what is printed underneath? That seems to be the non sequitur.

Senator SPOONER:
LP

– The civil worksprogramme document shows that for the Attorney-General’s Department there is a programme involving an expenditure of £200,498, and that it is expected that £179,000 will be spent on the programme during the year.

Senator Wright:

– But does not that include the item shown below - £26.086 for the Commonwealth Arbitration building?

Senator SPOONER:

– That is included in the total of £114,168 for works in progress.

Senator Wright:

– That is what I thought.

Senator Sir WALTER COOPER (Queensland - Minister for Repatriation) [4.8]. - Senator Wright asked whether a reduction in rent payments was likely as a result of the erection of the new Commonwealth buildings in Victoria and Queensland, lt is very hard to assess, from any figures available to me at the moment, whether there will be any reduction in either of those two States, but the overall reduction shown in the Budget papers is the difference between about £1,000,000 and about £970,000. In Melbourne, although rent controls have been lifted, a big saving will be effected as a result of removals from rented offices to the new building. In that State, rent control has been abandoned in recent times.

Senator WRIGHT:
Tasmania

.- I trust that the subdued tone with which I have been called is not indicative of despair on the part of the Temporary Chairman, because I intend to trespass a little more on the committee’s patience. I wish to refer to Division No. 935 - item 01, “ For expenditure under the Snowy Mountains Hydroelectric Power Act, £25,600,000”, and to invite the Minister to justify that expenditure.

I have had the pleasure, during the year, of making two visits to that project. I should like to say how gladly I acknowledge the courtesies of Sir William Hudson and his staff, and how greatly one is encouraged and enthused when one comes into contact with that organization, imbued, as it is, with purpose, energy, and - so far as a visitor can tell - with immense skill. It is an exciting project, which encourages one immensely. Anything that I say is not to be regarded as being in the slightest degree critical. I am seeking information.

I wish to state, as I have on previous occasions, that, so far as hydro-electric development is concerned, in Tasmania we are simple-minded enough, whenever a new development is contemplated, to require that the commissioner shall submit to the Parliament, through his Minister, a request that the capital expenditure involved be approved. He is required to forecast the revenue that is likely to be derived from the development, to forecast the cost that will be involved in constructing and operating it, and in every way to justify the programme as a practical business proposition. That happens once every two or three years. In these days the cost of such units is £8,000,000 or £10,000,000. That was the experience on the most recent occasion. Previously, the cost was £3,000,000 or £4,000,000, but the projects were regarded as being of sufficient importance to justify specific consideration. That is an infinitely more satisfactory procedure than the procedure that is adopted here. Not a single member of this Senate would fail to derive real interest and excitement from the process of considering, in a responsible way, each new development that took place in this outstanding national project.

That is my excuse for asking the Minister to explain to us - as if we were businessmen, co-directors - which part of the development is to be financed by the vote of £25,600,000 and so on. He might also be good enough to tell us what progress has been reached in placing the scheme on a revenue-producing basis. There is already a connexion with New South Wales. Unless I have been misinformed, the connexion that was to have been made in Victoria in recent days could not, in fact, be made. I should be very interested to know to what units the expenditure of £25,000,000 is to be directed.

Senator SPOONER:
Wales-Vice-President of the Executive Council and Minister for National Development · New South · LP

– I shall do my best, as in previous years, to comply with the honorable senator’s request. It is no easy task to give the details of so large an amount. The total is broken up in this general way: Contracts for the construction of major works, £16,071,000; salaries, £2,536,000; wages, £1,953,000; plant and equipment and minor works contracts, less sales, £3,590,000; stores and materials, £1,373,000; purchase of properties, £291,000; and general expenses, £961,000 - a total at that stage of £26,775,000. Miscellaneous receipts on capital accounts of £900,000 reduce the total to £25,875,000, and recoveries of operation and maintenance charges for projects in operation of £275,000 bring the total down to £25,600,000.

I shall try to avoid giving too many figures. During the current year, it is contemplated that we will finish the contracts for the Eucumbene-Tumut tunnel, for the T.l power station and for the Eucumbene Dam. That will leave three major contracts - the Tooma-Tumut diversion, the T.2 power station and the MurrumbidgeeEucumbene diversion. That is a thumbnail sketch of the total contracts that I gave. There are three major contracts in operation and they will continue for the whole of the financial year. They are the Tooma-Tumut diversion, on which £5,000,000 will be spent during this year; the T.2 power station, on which £7,000,000 will be spent; and the MurrumbidgeeEucumbene diversion, on which £2,300,000 will be spent.

I repeat what I have said previously, that progress continues to be made by the contractors and by the staff in a way that I can only say excites admiration. I could almost say that it is somewhat embarrassing when finance for the scheme must be found. The records that were broken in tunnelling and other works on the contracts that have just been completed are being broken again on the new contracts. This from the engineering point of view is, of course, excellent; from the financial point of view, it is not so easy. The Government has never stinted the Snowy Mountains scheme; it has found all that has had to be found. At the opening of T.l I said in a public statement that on the load factor of, I think, 32 per cent., power can be produced at .9d. per kilowatthour. The great significance of this is that it establishes the economic and engineering success of the scheme as a whole. The great engineering works have been carried through to a satisfactory conclusion, from the technical point of view, and successfully, as evidenced by the final economic result.

I am glad to hear that Senator Wright has been down on the scheme twice during this year. Part of the policy of the authority is to make the work available for inspection by members of Parliament, so that they may see and may obtain a grasp of what is going on, and so that it will continue to attract the confidence of the Parliament as it has attracted confidence up to this stage.

The next big step forward, of course, is the completion of the T.2 power station.

The T.l power station will not work at full capacity until such time as the Eucumbene Dam is filled to an appropriate level. We must remember that we are not providing power only; we supply water for irrigation as well. There must be a certainty about water for irrigation, and a plan must be devised so that it can be made available year by year at a constant level. How long it will take to fill the Eucumbene Dam turns upon the rainfall and the weather. We may reach the level that will enable us to work T.l to full capacity in a year or eighteen months, or it may take four or five years, depending on the rainfall and the snow. When we get the Eucumbene Dam reasonably filled and T.l and T.2 operating, we will make a great difference to the financial position of the Commonwealth in relation to the scheme.

Whether we can bring T.l and T.2 into full operation turns upon the filling of Eucumbene Dam, and that is the big question of interest on the scheme at the moment. This depends on how our luck breaks, on how good the rainfall is. In answer to a question to-day, I said that the winter of last year was the driest winter that had been experienced on the scheme for fourteen years, and yet, after the dam had been completed, we had heavy rainfall which picked up a substantial portion of the leeway.

I find it very difficult to comply with Senator Wright’s request, because of the immense scope of the project. I add the further point that, as well as inviting visitors to the scheme, we have always consistently maintained a policy of issuing booklets, pamphlets and information detailing the ramifications of the scheme, the purpose of the scheme and the progress that has been achieved.

Senator WRIGHT:
Tasmania

.- I wish to acknowledge what the Minister for National Development (Senator Spooner) said with regard to the Snowy Mountains scheme. Of course, the annual report of the authority is available to us, but the last report available to date is for the year ended 30th June, 1958. I wish to add only that much greater detail was given for items in the Appropriation Bill than has been given for items in this bill.

If it is not practicable to furnish a statement of the type that I have invited, on the introduction of a bill such as this, I make the further suggestion that items for works and services amounting to £10,000,000 or £25,000,000 be shown in four or five subdivisions, giving information on contracts that have been financed and so on.

The only point I wish to add to the gratifying statement of the Minister as to records being broken is that, on the ToomaTumut tunnel, the world record was achieved about two months ago by Australian workmen under the direction of Australian contractors. That was a most pleasing feature. May I now direct attention to an entry at page 52 of the Civil Works Programme. 1 seek information as to its place in the bill.

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

– My document does not extend to page 52. I must ask you to refer to the item in the bill.

Senator WRIGHT:

– 1 ask for your cooperative assistance, Mr. Temporary Chairman, if I may do so with great respect.

The TEMPORARY CHAIRMAN.With great respect, Senator, you must consider all the other senators who, too, want to follow the debate.

Senator WRIGHT:

– If you will take note of the way in which I introduced the matter, you will see that my attention was first hooked by what I found on page 52 of the Civil Works Programme. I ask for the assistance of the Minister and those surrounding him, in identifying for me the relevant figure in the Appropriation (Works and Services) Bill. Having regard to the paucity of language used in the bill, and the fact that some items in the bill cover several items in the Civil Works Programme, I do not find it easy to identify the items. I therefore ask for the assistance of the Minister, his advisers, and other members of the committee. The item with which I am concerned appears at page 52 of the Civil Works Programme, under the heading, “ Group B. - Education “. The item reads -

Is the Minister seeking an appropriation for any part of any one of those items? If he were doing so, I should find myself unable to justify a vote for that purpose until a decision had been made as to the future of the Canberra University College, particularly in relation to the proposal that it be integrated with the Australian National University. Those three items together amount to over £800,000. If it is proposed to appropriate money for the Canberra University College for those purposes, we ought to know whether or not the college is to be on the same site, irrespective of the amalgamation proposal, and whether a decision has been made to maintain the college as a separate university institution and to go on building in this way. Would the Minister please help me?

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

– The relevant part of the bill is Division No. 985. It will be noted that the proposed appropriation is £11,000,000. I now refer to page 49 of the Civil Works Programme. At the top is shown a summary of expenditure totalling £18,763,556. The estimated expenditure for the current year is £11,000,000. Reverting to the particular items about which the honorable senator has asked, the expenditure for the current year on the three individual items will be that proportion of the total cost that £11,000,000 bears to £18,763,556. The expenditure will be pro rata.

Senator WRIGHT:
Tasmania

.- That establishes the fact that parts of those items are to be included in the appropriation for this year, but I should like the Minister to go on to tell us something about the Government’s decision with regard to the future of this college, in relation to the proposal discussed in the report of the Murray committee that the college be amalgamated with the Australian National University. Are we to be in the position of maintaining two universities in Canberra, one an institution devoted completely to research and the other maintained for under-graduates? I think that it is quite wrong for us to consider an appropriation for the construction of buildings such as these unless we know the position and have a sufficient degree of information to enable us to understand the reasons.

Senator PALTRIDGE (Western Australia - Minister for Shipping and Transport and Minister for Civil Aviation) [4.3 lj. - I am afraid that I cannot give a definite answer to the question asked. Quite recently, I believe, the Prime Minister (Mr. Menzies) made a statement to the effect that he hoped to be able shortly to say what was to be the position in respect of the universities in Canberra.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Senate adjourned at 4.32 p.m.

Cite as: Australia, Senate, Debates, 13 November 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19591113_senate_23_s16/>.

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