Senate
12 May 1960

23rd Parliament · 2nd Session

  1. Senate
  2. 23rd Parliament
  3. 1960

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid) took the chair at 1 1 a.m. and read prayers.

page 915

QUESTION

WATER CONSERVATION AND IRRIGATION

Senator BROWN:
QUEENSLAND

– I ask the Minister for National Development a question without notice. Have any plans been submitted recently by the Graziers Federal Council of Australia for a vast inland development scheme in Queensland embodying, among other means, the diversion of North Queensland eastward-flowing rivers towards the inland? Apart from those plans, have others over the years been submitted to the Government? If so, are any of the plans considered practical for the purpose indicated - to overcome the scarcity of water in the inland areas of Queensland?

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

– I hesitate to reply to Senator Brown beyond saying that I have no recollection of any recent proposals being advanced to me for the diversion of Queensland waters to the inland.

page 915

QUESTION

AUSTRALIAN TARIFF SYSTEM

Senator LAUGHT:
SOUTH AUSTRALIA

– I direct my question to the Leader of the Government. As it is now 31 years since the Brigden committee presented a report on the operation of the Australian tariff system, can the Minister say whether the Government has before it a proposal to appoint a high level committee of inquiry into the Australian tariff system generally? If so, will the Minister say when such a committee may be called into service?

Senator SPOONER:
LP

– From time to time the Government has given consideration to such a proposal but has had reservations about the efficacy of setting up a committee for this purpose. I noticed in the press that recently representations on the subject were made to the Prime Minister - I think just before he went abroad - and the report that I read in the press indicated that the Prime Minister contemplates bringing the matter before Cabinet on his return to Australia. Whether that press report is accurate I am not able to say. I would think that it may well be accurate, because we are certainly living in a changing world, not only as a result of the elimination of import licensing but also because of the tremendous development that is taking place in Australia. Therefore, I would not be surprised if the Prime Minister had decided that this was an opportune time to see whether we should undertake a review of the basic tariff principles.

page 915

QUESTION

INDUSTRIAL ARBITRATION

Senator McMANUS:
VICTORIA

– My question, which 1 direct to the Minister representing the Minister for Labour and National Service, refers to fines imposed on trade unions under the Conciliation and Arbitration Act between 1950 and 1960. Will the Minister state in what cases, if any, the fines have been, first, not paid, and secondly, remitted?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– As in a former case when detailed information was requested by the honorable senator, I shall have a table drawn up and presented to him by the Minister.

page 915

QUESTION

STEEL

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– I preface a question to the Minister for Customs and Excise by saying that there is a shortage of steel products in Western Australia at the present time, and that it does not appear to be likely that the shortage will be overcome for some months. Could steel products from overseas sources be admitted into Australia under by-law, duty free, so that the backlag of orders for these products could be overtaken much sooner?

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

– There is a shortage in Australia of some types of steel from Australian manufacturing sources. Senator Drake-Brockman is always to the fore when representations are made concerning shortages in Western Australia. The department has already made arrangements for the types of steel that are in short supply to be admitted duty free. The applications that were received from Western Australia have been dealt with, and this steel will be admitted1 duty free on arrival.

Senator SCOTT:
WESTERN AUSTRALIA

– I ask the Minister for Customs and Excise a supplementary question. What is the duty charged on steel products entering Australia? Is there one rate of duty, or do the rates vary with the different types of steel?

Senator HENTY:

– I do not carry the details of the tariff in my head. If the honorable senator will place his question on the notice-paper I will get the tariff schedule for him.

page 916

QUESTION

SUPERANNUATION

Senator HENDRICKSON:
VICTORIA

– My question is directed to the Minister representing the Treasurer. When will the 1959 annual report of the Superannuation Board be tabled in the Parliament? Will a statement be prepared showing the number of former contributors to the superannuation fund who are enjoying their pension rights, but who, while employed in a part-time capacity by a Commonwealth instrumentality, are paid on a “ fee “ basis so that their pension payments are not reduced because of such employment? Will a statement be prepared showing how this privilege is enjoyed by some former contributors?

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

-I shall have inquiries made to find out when the annual report of the Superannuation Board will be tabled in the Parliament. I am not sure whether the information to which the honorable senator has referred in the last part of his question is usually published in the reports of the board. I shall refer that aspect of the question to the Treasurer and get his advice on it.

Senator HENDRICKSON:

– I address a supplementary question to the Minister. Some men receiving small payments from the superannuation fund are prohibited from being employed in the Commonwealth service, but others are so employed and are paid a fee which does not affect their superannuation payments. Will the Minister comment on that aspect as well?

Senator PALTRIDGE:

– I thought I had made myself quite clear. I said that I would refer to the Treasurer the part of the question which dealt with matters other than the tabling of the annual report. Senator Henty does not carry the details of the customs tariff in his head. I do not carry details of this kind in my head.

page 916

QUESTION

AUTOMOTIVE SPARE PARTS

Senator LILLICO:
TASMANIA

– I direct a question to the Minister for Customs and Excise. Has the Minister seen a statement in the Tasmanian press to the effect that at a meeting of the National Farmers Union it was claimed that a farmer was charged £464 for differential parts for a three- year-old tractor, and £3 19s. 6d. for an adjusting bolt1½ inches long? Because such excessive prices for spare parts for farm machinery are general throughout Australia, and because of the need to reduce costs of production so that Australia can compete with its exports on world markets, will an investigation be made by some body such as the Tariff Board of the cost of spare parts and the cost of farm machinery generally? What is the protective tariff for farm machinery in Australia?

Senator HENTY:
LP

– The honorable senator’s question is a most important one. I have read the press statement to which he refers, but I cannot say whether it is correct or otherwise. The position regarding the price of spare parts and their distribution throughout Australia has been brought to my notice. I agree that, for a farmer, there is nothing worse than for a part of a machine to break and for him to find that the agent for that part in his area has no spare available to permit the farmer to effect the repair and begin work again soon afterwards. There is no constitutional power to enable the Federal Government to fix retail prices.I do not know whether or not the prices charged for spare parts are excessive. If the honorable senator places his question on the noticepaper I shall have prepared for him a copy of the customs tariff schedule relating to spare parts for farm machinery. I understand that the matter of such spare parts has been before the Tariff Board, and I think a schedule has been drawn up.

Senator KENDALL:
QUEENSLAND

– I direct a supplementary question to the Minister. It concerns information that I have received regarding the sale of Holden motor cars at a price of £1,170 or £1,180. Is it correct to say that if a Holden car costing that amount was taken to pieces and the components sold separately as spare parts, they could bring in more than £4,000?

Senator HENTY:

– I am sorry to say that I have not the slightest knowledge of that matter.

page 916

QUESTION

EUROPEAN COMMON MARKET

Senator HENDRICKSON:

– I direct a question to the Minister representing the Minister for Trade. In view of my many warnings about the threat posed by the which was asked by Senator Laught. In the “ Advertiser “ of 10th May, a delegate of the National Farmers Union was reported to have said, at a conference held in Sydney recently, that the dairying industry was facing a direct threat from imports because tariff controls had been lifted as from the end of last month. It was reported, further, that he claimed that on present world values New Zealand could export butter for sale here at 7d. per lb. cheaper than Australian butter, and that this could undermine the economy of the local dairying industry. Has the Minister seen the report to which I refer? If the statements in it are true, will the Minister, as requested by the conference, cause a review to be made of outmoded tariffs, particularly those which bear upon our primary industries, in order to rectify the position?

Senator SPOONER:
LP

– I was asked a similar question a few days ago. I said then that I did not know the facts of the matter, and my recollection is that I asked that the question be put on the noticepaper. 1 ask that the honorable senator place his question on the notice-paper. As 1 said, it is in similar terms to the earlier question, but it may be seeking information that was not requested in the earlier question.

page 918

QUESTION

HONOURS AND AWARDS

Senator HENDRICKSON:

– As a general rule questions which I submit to the Minister for National Development without notice are very difficult to answer. On this occasion, I am taking compassion on him and asking a very simple question. I have been reading with great interest the financial statements attached to the 8th, 9th and 10th annual reports of the Snowy Mountains Hydro-electric Authority. These reports are signed by the chairman, to whose signature have been attached the letters K.B.E. Can the Minister tell me whether those letters indicate an academic qualification, or whether they refer to the chairman’s knighthood? If they refer to his knighthood, is their use in this connexion in accordance with protocol?

Senator SPOONER:
LP

– Let us take compassion on Senator Hendrickson, hold his hand, help him along the road and do what we can to please him. The letters are a recognition that Sir William Hudson is a Knight of the British Empire. They establish his title, and as such he uses them with the pride with which I think we all would expect him to use them.

page 918

QUESTION

HOUSING

Senator SCOTT:

– I ask the Minister for National Development whether it is a fact that Australia in now experiencing a home construction boom. If it is a fact, can the Minister advise me when he expects the lag in home-building to be overtaken? Can he advise me whether we are reducing the arrears? Can he also tell me what the present position is with relation to the building of homes for the people in my home State, Western Australia.

Senator SPOONER:
LP

– The Commonwealth Statistician published some figures either yesterday or to-day concerning the housing position. I have not studied them in sufficient detail to be able to recall them at the moment. The general impression I gained from them was that there is a continuance of the high level of home building, and that the record figures achieved last year are being exceeded this year. I speak subject to correction on that point, but whether I am right or wrong I can say that home building is being maintained at a very satisfactory level. A bird’s eye view of the situation shows that there is little doubt that the housing shortage has been overcome in all States except Victoria and New South Wales.

Senator Poke:

– And Tasmania.

Senator SPOONER:

– That is the kind of statement that is sometimes made although it is incorrect. There is doubt in my mind whether the shortage has not also been overcome in Victoria. In my own view, all the possibilities are that there is now a housing shortage in only one State, New South Wales.

Senator DITTMER:
QUEENSLAND

– The Minister for National Development has suggested that the housing shortage has been overcome in Queensland. Can he tell the Senate ho” .’ many hundreds or thousands of people r . seeking homes through the Housing O mission in that State?

Senator SPOONER:

– I do not carr me figures in my mind. There will always be lists of people applying for home We must remember that the population is growing and that people change their places of residence from time to time. One of the biggest mistakes that can be made, in trying to appraise the housing situation, is to take the numbers of people whose names are on waiting lists and add them together. There is a waiting list for war service homes. There are waiting lists in the various building societies. The State housing commissions have waiting lists.

Senator Dittmer:

– How many names are on the waiting list for war service homes?

Senator SPOONER:

– The figures are published from time to time. There will always be a waiting list for war service homes, because the War Service Homes Division offers the most favorable financial terms that can be obtained in the housing field - and that is as it should be. A great number of persons apply for war service homes only because they wish to take advantage of those favorable terms. You get the situation out of perspective if you base your appraisal of the situation on statistics showing the numbers of persons on waiting lists. We know from experience that quite a substantial number of people have their names on three or four different waiting lists for housing.

page 919

QUESTION

SALES TAX

Senator AYLETT:
TASMANIA

– I wish to direct a question to the Minister representing the Treasurer, and I preface it by saying that sales tax at rates of from 1 2-4- per cent, to 20 per cent, is imposed on hundreds of items, including foodstuffs and household requirements, that it is essential for family men to buy for everyday use in their homes. Will the Minister ask his colleague whether it would be possible for him to prepare, for presentation to the Senate, lists showing the amount of sales tax collected in relation to these items over a period of twelve months? It is obvious that a larger total amount of sales tax is paid by family men than by any other section of the community. I inform . the Minister that particulars of the rate of sales tax imposed on many household items are contained in the “ Grocery Journal “.

Senator PALTRIDGE:
LP

– I shall ask the Treasurer to have a look at the question asked by the honorable senator. I do not know how much departmental work would be entailed in complying with his request. It may take a considerable amount of time and considerable effort to extract the figures.

Senator Aylett:

– It would, because there is a considerable amount involved.

Senator PALTRIDGE:

– I know that the purpose of the honorable senator’s question no doubt is to point some criticism at the Commonwealth Government in respect of sales tax or any other tax. My answer is that the policy in respect of sales tax has been applied by the Government with continuing sympathy and, year by year, whenever it has been possible, sales tax on items has been reduced or removed. As a matter of fact, Mr. Deputy President, as the honorable senator was asking his question, I was asking myself whether or not, stung by the excessive prices that apply on the Gold Coast, he may have got those prices mixed up with the sales tax rates he mentioned.

Senator DITTMER:

– When the Minister representing the Treasurer is making representations to his colleague with regard to sales tax, will he ask him to give serious consideration, when the next sales tax schedule is being prepared, to removing sales tax of 25 per cent, from baby powder and placing it on dog flea powder which is not now subject to sales tax?

Senator PALTRIDGE:

– A similar question was asked some little time ago - I think by Senator Tangney. If I remember the answer correctly, it was to the effect that baby powder, so-called, was an item whose use was not restricted to babies - that baby powder was used by adults as well - and for that reason it was regarded as a toiler item rather than an item whose use was confined to children. Flea powder for dogs was exempted from sales tax for the reason that it was classified - correctly classified - as an insecticide for veterinary purposes and the use of this item went far beyond its application to dogs.

page 919

QUESTION

ALUMINIUM

Senator WRIGHT:
TASMANIA

– My question is addressed to the Minister for National Development. I refer to the recent brief statement that he made about the possibility of establishing an aluminium production undertaking in northern Queensland f>t the instance of an organization with a coined name that I did not understand. Can the Minister tell the Senate who are the people behind the proposed undertaking? What is his latest information as to the progress that has been made with regard to this proposal?

Senator SPOONER:
LP

– The company concerned is called Comalco, the name being made up of the initial syllables of the Commonwealth Aluminium Company. The shareholders of Comalco are Consolidated Zinc Proprietary Limited and the British Aluminium Company Limited. I do not know what stage has been reached in the investigations. The company is the holder of the great bauxite deposits at Weipa and also those at Gove. As I understand the position, the investigations, apart from the negotiations that are taking place in respect of Bell Bay, are aimed at establishing the cheapest sources of power available in Australia, and resolving the contest between the claims of various localities. Those claims must be measured by the information that is available on the cost of hydro-electric power in New Guinea and New Zealand. The press reports that I have seen indicated that high hopes were held that a smelter would be erected in Queensland, based on Queensland’s coal deposits. I think that the erection of such a smelter will be one of the consequences that will follow these investigations. I hold the view that the bauxite deposits at Weipa on the Gulf of Carpentaria will be developed to the extent of producing alumina and that that alumina will be used at more than one smelter in Australia. The smelter at Bell Bay will be increased in size quite appreciably. It is likely that, concurrently with the expansion of Bell Bay, the second smelter will be erected in Queensland, but that, naturally, is a matter for the company to decide.

Senator DITTMER:

– I desire to ask the Minister a supplementary question. Does the Minister know that Comalco, once it establishes its new smelter, whether in Queensland in co-operation with the Queensland Government or in New Guinea, proposes to close down the Bell Bay aluminium project in order to reduce costs and achieve greater efficiency?

Senator SPOONER:

– I would think that that report is completely and utterly inaccurate. I am quite certain that if - I emphasize the word “ if “ - the negotiations with Comalco come to fruition there will be no question of closing down the Bell Bay plant. In my opinion, the Bell Bay plant will be substantially increased in size.

Senator CANT:
WESTERN AUSTRALIA

– I, too, ask the Minister for National Development a supplementary question. In view of the large deposits of bauxite that are held in Western Australia and Queensland, will the Minister say why it is necessary to import bauxite from Indonesia and Malaya?

Senator SPOONER:

– The reason is that at present there is no commercial production of bauxite in Australia. Our bauxite deposits have not yet been developed to the extent of producing bauxite in commercial quantities. So far as Western Australia is concerned, a trial shipment has been sent to Bell Bay. My recollection is that press reports have indicated that a further three trial shipments of bauxite have been sent from Western Australia to Japan. We must remember that, figuratively speaking, it was only yesterday that we found that Australia had these deposits of bauxite. Large sums of money must be spent and a great deal of work must be done to develop the fields. Millions of pounds of capital expenditure is involved in developing a large-scale bauxite field, and we have just not had enough time to do all that is needed.

page 920

QUESTION

TRANS-AUSTRALIA AIRLINES

Senator ARMSTRONG:
NEW SOUTH WALES

– My question could be of interest to two Ministers, but I ask it of the Minister directly concerned - the Minister for Civil Aviation. Is the Minister aware that Commonwealth security officers have been used by Trans-Australia Airlines to force people to pay debts owing to the airline? If the Minister is not aware of this fact, will he consult with the Minister representing the Attorney-General to see whether such a practice is in fact being followed?

Senator PALTRIDGE:
LP

– I have no knowledge at all of the matter referred to by the honorable senator.

Senator Armstrong:

– I will supply the Minister with names.

Senator PALTRIDGE:

– If the honorable senator will do that I will look into the matter.

page 921

QUESTION

SNOWY MOUNTAINS SCHEME

Senator WRIGHT:

– My question, which is directed to the Minister for National Development, refers to the Snowy Mountains scheme. I should like to know whether the agreements between the Snowy Mountains Hydro-electric Authority and New South Wales and Victoria, regarding the supply of electricity, have actually been signed. If so, have they been published? If they have not been published, are they available to members of the Senate for perusal?

Senator SPOONER:
LP

– I am pretty clear in my mind on this matter, but I speak subject to correction. The terms and conditions under which electricity is supplied by the Snowy Mountains Hydro-electric Authority to New South Wales and Victoria are defined and set out in the Snowy Mountains Agreement, which has been approved by Parliament and is embodied in legislation. Those terms and conditions are, therefore, available.

page 921

QUESTION

CIVIL AVIATION

Senator HENDRICKSON:
VICTORIA · ALP

– On behalf of Senator Kennelly I ask the Minister for Civil Aviation whether he is yet in a position to release the full report made to him by Mr. Warren McDonald, former chairman of the Australian National Airlines Commission. I remind the Minister that he promised to make the report available to the Senate some time ago. If he is not yet in a position to release the report, how often must the Opposition ask him about this matter before he will carry out his undertaking?

Senator PALTRIDGE:
LP

– I have nothing to add to the answer I gave to Senator Kennelly personally last week.

page 921

QUESTION

SALES TAX

Senator AYLETT:

– I ask a question of the Minister representing the Treasurer. Does the Minister consider that coverings used by primary producers to protect their hay and other produce from rain and snow should be classed as luxuries? Will the Government consider reducing sales tax on tarpaulins, which are used extensively by primary producers and which now carry sales tax at the rate of 20 per cent.?

Senator PALTRIDGE:
LP

– I am not aware that tarpaulins purchased for use on farms in the manner mentioned by the honorable senator are in fact subject to sales tax.

Senator Aylett:

– They carry sales tax of 20 per cent.

Senator PALTRIDGE:

– I think they may be exempt from sales tax when used in connexion with primary production. I will be pleased to refer the question to the Treasurer.

page 921

QUESTION

ARMY TANKS

Senator WRIGHT:

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

  1. How many Centurion tanks has the Army?
  2. When were they purchased and at what price?
  3. What is the total maintenance cost in respect of them to date?
Senator HENTY:
LP

– The Minister for the Army has supplied the following answers: - 1 and 2. It is not considered to be in the public interest to disclose precise information as to Army holdings of weapons and equipment or their vintage. The figure stated by the Minister for Defence on 10th September, 1958 - Hansard page 1077 - was approximate. The total capital cost was slightly in excess of £6,000,000 but the tanks were purchased in separate orders over a period of some years so individual prices varied.

  1. The total maintenance cost could not be assessed without a considerable amount of detailed research. Separate statistics would have to be compiled for labour, petrol and lubricants used, &c., as well as for spare parts - all of which are not peculiar to the Centurion tank. It is regretted, therefore, that this information cannot be made available.

page 921

QUESTION

TELEPHONE SERVICES

Senator O’BYRNE:
TASMANIA

asked the Minister representing the Postmaster-General, upon notice -

  1. Is there any substance in the Tasmanian press report that the Postmaster-General’s Department will make a full charge for re-installing telephones that were damaged or destroyed in the recent disastrous floods in the Derwent Valley?
  2. If the report is correct, will the PostmasterGeneral investigate this matter with a view to replacing the services at no extra charge?
Senator SPOONER:
LP

– The PostmasterGeneral has furnished the following reply: -

  1. No.
  2. See 1 above.

page 921

ASSENT TO BILLS

Assent to the following bills reported: -

Cattle and Beef Research Bill 1960.

Cattle Slaughter Levy Bill 1960.

Cattle Slaughter Levy Collection Bill 1960.

Meat Export Control Bill 1960.

page 922

MINISTERIAL ARRANGEMENTS

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

– by leave -I desire to inform the Senate that the Minister for Repatriation (Senator Sir Walter Cooper) will leave Australia on Saturday next, 14th May, for an overseas visit lasting about two months. He will study at first hand overseas developments in repatriation services, particularly for the limbless and severely disabled. During the Minister’s absence the Minister for Health (Dr. Donald Cameron) will administer the Repatriation portfolio, and Senator Henty will represent him in the Senate.

I desire to inform the Senate also that the Minister for Labour and National Service (Mr. McMahon) will attend the 1960 annual conference of the International Labour Organization in Geneva. The Minister will leave Australia on 28th May and will be absent for approximately five weeks. During that time the Minister for Civil Aviation (Senator Paltridge) will administer the Labour and National Service portfolio.

page 922

NEW BUSINESS AFTER 10.30 P.M

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

.- I move-

That Standing Order No. 68 be suspended up to and including 26th May, 1960, to enable new business to be commenced after 10.30 p.m.

I point out to the Senate that this is the normal procedure in the closing days of a sessional period. It is a procedure that is necessary so that the Government can keep control of the order of the introduction of legislation. It permits new business to be brought into the Senate after 10.30 p.m. It may not be necessary to use this provision. I hope that if it is used, it will be used sparingly and with the consent or the co-operation of the Opposition. I cannot give an undertaking that the Government will use it only with the consent of the Opposition, because we have been known to have differences of opinion in the past.

This procedure is necessary so that we may expeditiously, and, I think, methodically, conduct the business of the Senate. I hope therefore, that the motion will have the support of both sides of the Senate.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I cannot give the Leader of the Government (Senator Spooner) any ground for the hope that he just expressed. When I saw the frost on the ground yesterday - the first I had seen in Canberra this year - I rather expected a motion of this type. Both events foreshadow the end of a sessional period at this time of the year. It is usual for the Government to move a motion of this type, and it is usual for the Opposition to oppose it, for the well-founded reasons that we give on each occasion.

The necessity for the motion arises from the faulty arrangement of parliamentary business. Perhaps the fault lies more at the door of another House than at the door of the Senate. There is invariably a rush of business at the end of a sessional period. I thought we might have escaped this motion, because I do not recall in all my parliamentary experience a session more barren of important legislation than this one. From what I can see of the business pending elsewhere, the matters to come before us are relatively formal.

Even when conflict between the Opposition and the Government has been at its height, the Government has never been embarrassed at the end of a sessional period in disposing of relatively routine or formal legislation. If the Leader of the Government will cast his mind back to the end of the last session, he will recall that the Opposition co-operated willingly with the Government in expediting the passage of formal measures. On this occasion, I see less reason than ever before for a motion of this type. We object to the motion for two reasons, first because the Opposition could be gravely disadvantaged by being forced to debate immediately a measure introduced late at night, and secondly, because the motion would permit of a process of legislation by exhaustion. We are not prepared to support the motion. We shall certainly divide on it, Mr. Deputy President.

Question put. The Senate divided. (The Deputy President - Senator the Hon. A. D. Reid.)

AYES: 30

NOES: 20

Majority . . 10

AYES

NOES

Question so resolved in the affirmative.

page 923

INTERNATIONAL DEVELOPMENT ASSOCIATION BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

.- I move -

That the bill be now read a second time.

The purpose of the present bill is to authorize the Government to take the action necessary to enable Australia to become a foundation member of the proposed International Development Association which is to be set up as a new affiliate of the International Bank for Reconstruction and Development. It is the current fashion to describe international agencies by the initial letters of the words used in their official titles; and this proposed new member of the family is already widely known as Ida.

It may perhaps be asked why, when we already have an International Monetary Fund an International Bank and an International Finance Corporation, yet another international financial institution should be thought to be necessary. The answer is that Ida will meet a need which cannot be met by any of the other three institutions, extremely useful though they have proved to be in the respective fields in which they operate. The International Monetary Fund is limited to providing short-term finance to its members to assist them in overcoming temporary balance of payments difficulties.

The charter of the International Bank enables it to extend long-term loans for economic development; but it can make such loans only if repayment and fulfilment of other terms and conditions are guaranteed by the government of the recipient country. Moreover, the bank’s continued operations depend on preserving the confidence of the private investors who, through their subscriptions to the bonds issued by the bank on the world’s capital markets, provide the bulk of the bank’s lendable funds. For that reason, the bank must itself charge interest on its loans at a rate sufficiently high not only to cover its own borrowing and administrative costs but also to build up adequate reserves. Because there has been a general upward trend in interest rates in the world’s capital markets in recent years, the bank has been obliged to raise its own charges. The current rate for International Bank loans is 6 per cent. Nevertheless, within the terms of its charter, the bank has been playing an increasingly important role in mobilizing capital resources in the older, industrial countries for the purpose of financing development in the less-developed areas of the free world. It is currently lending at an annual rate of rather more than 700,000,000 dollars.

The third of the existing international financial institutions - the International Finance Corporation- operates on a much more modest scale. Its total resources amount to only about 100,000,000 dollars and its function is to promote the growth of private productive enterprise in member countries, particularly in the less-developed areas. In association with private investors, the International Finance Corporation assists in financing the establishment improvement and expansion of private productive enterprises which would contribute to the development of member countries without guarantee of repayment by the member government concerned. Under its charter the corporation can invest its funds only in cases where sufficient private capital is not available on reasonable terms. The importance of the corporation is not so much in the amounts it provides from its own resources but in the part it plays in bringing together investment opportunities, domestic and foreign private capital, and experienced management. The corporation has been operating, as an affiliate of the International Bank, only since 1956, but it has made a promising start in its operations in the special field assigned to it.

From this outline of the scope of the three existing institutions, it will be plain that none of them is equipped to meet the Jong-term capital needs of those underdeveloped countries whose economic and financial situation is such that they are not able to pay the interest charges or undertake the repayment obligations of International Bank loans. This applies not only to countries which have never been able to obtain finance from the International Bank, but also to those countries which have borrowed extensively from the International Bank and other sources in the past and have reached a position where the burden of interest and capital repayments is already so heavy that they cannot safely assume new commitments.

There have been proposals in a good many quarters in recent years for some new institution which could fill this gap. The Ida proposal as it now stands may, however, be directly traced to a plan put forward by a United States Senator - Senator Monroney. This plan contemplated a new international agency which would make loans to underdeveloped countries which they could repay in their own local currencies; and it also envisaged that such an agency might have transferred to it for use in its lending operations some of the United States Government’s holdings of local currencies generated as counterpart funds from surplus commodity deals.

Senator Monroney’s proposals were subsequently adopted by the United States Administration in a somewhat modified form. After some preliminary canvassing by the United States of the attitudes of other friendly governments, a resolution was introduced at the 1959 annual meeting in Washington of the board of governors of the International Bank by the United States governor proposing the setting up of an International Department Association as an affiliate of the International Bank and calling on executive directors of the bank to formulate draft articles of agreement for submission to member governments of the bank.

The executive directors had a difficult task in drawing up a charter for the new organization which would have reasonable prospects of gaining the approval of most, if not all, the 68 member countries of the International Bank. The task was, however, completed in January last. The articles of agreement, as they have emerged, are given in the schedule to the bill and the report of the executive directors accompanying it has been printed and circulated separately. The articles of agreement are necessarily somewhat complicated and it may be of some assistance if I summarize the key provisions.

The initial resources proposed for Ida are one million dollars, which will be obtained if all members of the International Bank join and thereby accept the subscriptions assigned to them. Ida subscriptions are to be roughly proportionate to subscriptions to the bank. The United States would be the largest shareholder - 320,290,000 dollars - and the United Kingdom the second largest - 131,140,000 dollars. The subscription assigned to Australia is 20,180,000 dollars. A full schedule of assigned subscriptions is given in annex A to the articles of agreement in the schedule to the bill.

Members are divided into two groups for subscription purposes. Subscriptions will be payable over a five-year period and the countries in both groups will subscribe 10 per cent, of their initial subscriptions in gold or convertible currencies. “ Part I “ countries, that is, the “ more industrialized “ countries - Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Netherlands, Norway, Sweden, Union of South Africa, United Kingdom and United States - whose total subscriptions amount to 763,000,000 dollars, will pay the remaining 90 per cent, in five equal instalments in gold or convertible currencies. “ Part II “ countries - the 51 “ less-developed “ members^ - will pay their 90 per cent, in their national currencies, which Ida will not be free to convert into other currencies or to use to finance exports from the country concerned without its consent.

The draft articles limit membership to countries that are members of the International Bank. Bank membership now embraces most of the countries of the free world. The purposes of Ida are defined as being - “ to promote economic development, increase productivity and thus raise standards of living in the less developed areas of the world included within the association’s membership, in particular by providing finance to meet their important developmental requirements on terms which are more flexible and bear less heavily on the balance of payments than those of conventional loans, thereby furthering the developmental objectives of the International Bank …. and supplementing its activities”.

The expression “ less-developed areas of the world included within the association’s membership “ is designed to cover not only the “ less-developed “ member countries but also dependent and associated territories of the “ more industrialized “ members.

Financing extended by Ida is to be for purposes which - “ . . . are of developmental priority in the light of the needs of the area or areas concerned and, except in special circumstances . . . for specific projects.”

Projects which are not in themselves revenue-producing or directly productive, such as water supply and sanitation, would be eligible, although it is expected that most projects financed by Ida would be similar in type to those financed by the International Bank. Ida will not provide financing if it is available from private sources on reasonable terms, or could be provided by loans of the type made by the bank. Countries which have reached the limits of borrowing in terms of their capacity to repay interest and capital on conventional loans will, however, be able to look to Ida for assistance.

Ida will not be able to make outright grants, at least from the initial resources subscribed to it. Assistance must be given in the form of loans, but the form and terms of such loans may be such as Ida “ may deem appropriate “. This leaves the way open for the provision of finance in any of a number of ways, for example, by providing for lenient terms of repayment, such as loans repayable in foreign exchange, with long maturities or long periods of grace before repayment begins, or both, or loans repayable wholly or partly in local currency, by lending free of interest or at a low rate of interest, or by some combination of the foregoing.

Ida may provide finance to a member government, to the government of a territory included within Ida’s membership, to a political sub-division, to a public or private entity in the territories of a member, or to a public international or regional organization. It may lend with or without government guarantees. It is, however, precluded from providing finance for any project if the member in whose territories the project is located objects.

A provision has been included requiring Ida in its operations to pay “ due attention to considerations of economy, efficiency and competitive international trade “. This is designed to ensure that any use of inconvertible local currencies does not have the effect of distorting normal trade patterns. Voting rights in Ida will be roughly proportionate to subscriptions. It is laid down that the 90 per cent, component of the initial subscriptions of all “ Part I.” countries, that is, the “ more industrialized “ countries, is to be used by Ida, over reasonable periods of time, on an approximately pro rata basis.

Ida may enter into arrangements to receive from any member, in addition to its own subscription, supplementary resources in the currency of another country provided that the member whose currency is involved does not object. This provision is designed to preserve the original conception in the Senator Monroney plan for transferring to an international institution part of the local currency funds arising from United States surplus commodity deals.

Because Ida will be making loans on noncommercial terms and will not itself be able to raise loans on the world’s capital markets in the manner of the International Bank, it is envisaged that its funds will require periodic replenishment. In formulating the provisions dealing with the procedures for replenishment, the bank’s executive directors considered that, as in the case of initial subscriptions, any general increases in subscriptions should normally be designed to provide Ida with funds for a five-year period. In any such replenishment exercise, Ida is required to give each member an opportunity to subscribe an amount enabling it to maintain its relative voting power. This provision permits Ida either to give each member an option to subscribe all or part of the amount authorized for it or nothing at all.

Ida is to have a board of governors, executive directors, and a president, all of whom will be the holders of those positions in the International Bank, serving ex-officio in Ida. Officers and staff of the bank are to be appointed, to the extent practicable, to serve as such in Ida, which accordingly will have no separate officers or staff, at least initially. The provisions dealing with status, privilege and immunities of Ida follow exactly the corresponding provisions in the articles of agreement of the International Bank. The Ida agreement is to enter into force at any time on or after 15th September, 1960, when it has been signed on behalf of governments whose subscriptions aggregate at least 650,000,000 dollars.

There is every indication that the draft articles of agreement, which inevitably represent in many respects a compromise between divergent views held by member governments of the International Bank, will receive sufficiently widespread acceptance to ensure the successful foundation of the new institution. Legislation authorizing membership has already been introduced in the United States Congress and the United Kingdom Parliament.

The Australian Government has expressed its sympathy with, and support for, the objectives of the Ida proposal from its inception. There are, however, some features of the charter of the new organization which we would have wished to have seen otherwise and we made our position on these points clear while the proposals were still in the formative stage.

For example, when the proposal was under discussion at the annual meeting of the board of governors of the International Bank last year, the Treasurer, speaking as Australian governor, pointed out that there was a need to recognize in the Ida charter the special position of countries like Australia which stand in an intermediate position between the maturer industrialized countries which are the traditional exporters of capital and capital goods and the underdeveloped countries which will be the beneficiaries of Ida assistance. He also drew attention to the undesirability, in a world which has recently made such gratify ing progress towards full convertibility of currencies, of including in the Ida articles provisions which could lead to new accumulations of inconvertible local currencies.

Despite the efforts of the Australian executive director in the subsequent discussions, the draft Ida articles of agreement as they have emerged do not make provision for intermediate countries. The Ida charter also retains provisions under which Ida will in all probability tend to build up inconvertible local currency holdings. Here, at least, our efforts and those of others holding similar views, did lead to the writing in of safeguards designed to prevent the use of such currencies in ways that could distort normal trade patterns.

The Australian Government would have preferred to see the local currency provisions dropped altogether. If an underdeveloped country is in such a position that it cannot afford to repay loans in convertible currencies, however low the interest rate, or however long the period of repayment, it would, in our view, be far more appropriate for Ida to make aid available in the form of outright grants. This proposal was not, however acceptable to the United States; and we have to recognize that the United States will be the largest contributor to Ida.

In any event, the articles of agreement as they now stand are no longer open to further amendment, and the decision the Government had to make was whether any objections it might feel to particular aspects of the charter of Ida were such as to warrant Australia standing aloof from the new organization.

Faced with this alternative, the conclusion” of the Government was that Australia should support Ida and become a foundation member. Whatever imperfections the Ida charter may contain, it represents an important new international initiative directed towards helping to solve what is perhaps the most important and most challenging issue of our time, namely, that of finding the means to finance the development of the underdeveloped countries.

Obviously, with the limited resources likely to he available to it. it cannot in itself provide the answer to that problem. Even if all the 68 members of the International Bank join Ida, its capital will amount to only 1,000,000,000 dollars of which only about 785,000,000 dollars would be in readily usable currencies. Spread over five years this would provide an annual average lending rate of about 150,000,000 dollars. This may be compared with the current annual lending rate of the International Bank of about 700,000,000 dollars.

Nevertheless,Ida will provide a useful supplement to the aid already being given by other international agencies and under schemes such as the Colombo Plan. Australia is, in relation to its resources and its own pressing developmental needs, already making a substantial contribution to the economic development of the under-developed countries as well as to the development of its own dependent territories. But, as one of the principal recipients ourselves of development capital from the International Bank, we should, in the view of the Government, be falling below the level of our responsibilities in the world if we were, because of dissatisfaction with particular aspects of the articles, to decline to join this new and important affiliate of the bank.

In conclusion, I should like to deal briefly with the clauses of the bill. Clauses 1, 2, 3 and 4 are self-explanatory. Clauses 5 and 6 provide authority to make the payments Australia will be required to make to the Ida to make its membership effective. As I have already said, Australia’s assigned subscription is 20,180,000 dollars. Ten per cent. of that amount is payable in gold or convertible currencies. Half of that 10 per cent. - about 1,000,000 dollars or £450,000 will be payable within 30 days of the commencement of Ida’s operations. The other half of the 10 per cent. will be payable in equal annual instalments of1¼ per cent. each over the next four years. The remaining 90 per cent. of Australia’s subscription is payable, also in gold or convertible currencies, in five equal annual instalments of 18 per cent. each, the first instalment falling due within 30 days of commencement of Ida’s operations. These annual instalments will amount to 3,600,000 dollars or about £1,600,000 a year. In the case of these so-called 90 per cent. subscriptions, however, it is open to members to meet their obligations initially, and until such time as the funds are required by Ida for use in its lending operations, by lodgement of a non-interest bearing non-nego tiable demand note. Power to issue such notes is contained in clause 6 of the bill. Taking the 10 per cent. portion and the 90 per cent. portion together, Australia’s commitment will be about £2,000,000 in the first year and about £1,700,000 in each of the succeeding four years.

Clause 7 of the bill empowers the Governor-General to make regulations for the carrying out of Article VIII. of the agreement relating to the status, privileges and immunities of Ida. The provisions of that article follow exactly the corresponding provisions of the articles of agreement of the International Bank. This is appropriate, particularly since the officers of Ida will, initially at least, all be also officers of the International Bank.

The Government welcomes this new addition to the international institutions concerned with financing economic development in the less-developed areas of the world. Through its representation on the board of governors and the executive board it will continue to follow closely, and to play its part in, the administration of Ida when it becomes operative. It sincerely trusts that this new institution will fulfill the high hopes entertained for it.

I commend the bill to the Senate.

Debate (on motion by SenatorO’Flaherty) adjourned.

page 927

CUSTOMS TARIFF BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the bill be now read a second time.

The bill now before honorable senators amends various items in the schedule to the Customs Tariff 1933-1959. Most of the tariff changes being made are based on recommendations made by the Tariff Board and the relevant Tariff Board reports have already been tabled in this chamber.

The Tariff Board’s finding in respect of woollen piece goods was that the general level of tariff protection should be maintained, but that two existing tariff items should be combined to remove administrative difficulties. This recommendation has been implemented by the deletion of item 105 (f) (2) from the customs tariff and by making an appropriate adjustment to item 105 (f)(1).

In its report on cotton canvas and duck, the Tariff Board recommended additional protection in the form of a deferred duty. The Government had decided, however, to operate the recommended duties forthwith and to refer the matter back to the board for further inquiry and report. In a separate report on waterproofed canvas and duck, the Tariff Board found that the same rates of duty should apply to waterproofed as to unwaterproofed canvas and duck. The Government has accepted this approach.

On antimonial and lead compounds, no change has been recommended by the Tariff Board apart from the incorporation of the primage duties in the rates applying under the customs tariff. The net result is that the duties payable are unchanged.

Precision and analytical balances with a sensitivity of + gram are to be admitted at the rates of free British preferential tariff and 121 per cent, ad valorem otherwise. This amendment extends the concessional rates on such balances from £ milligram to i gram. No change is proposed in respect of other weighing machines and appliances.

On cloth-cutting machines, increased duties are proposed for portable electric types, the rates being 22i per cent, ad valorem under the British preferential tariff and 30 per cent, ad valorem otherwise. Bench and other types of clothcutting machines remain admissible at nonprotective rates of duty.

Protection is being imposed for the first time on vibratory type electrically operated hair-clipping machines. Duties of 321 per cent. British preferential tariff and 50 per cent, most-favoured-nation tariff, are proposed. The British rate exceeds that recommended by the Tariff Board but rs the lowest rate possible consistent with Australia’s overseas commitments. Rates of duty on other types of hair clipping machines, for example, shavers and motorized hair clippers, remain unchanged at free under the British preferential tariff and 12i per cent, ad valorem otherwise.

In regard to fuel injection equipment for compression ignition internal combustion engines, there is no actual change in the basic protective rates of duty. However, amendments to customs by-laws as recommended by the Tariff Board have resulted in a wider range of the equipment being dutiable at protective rates of 27i per cent, ad valorem British preferential tariff and 45 per cent, ad valorem most favoured nation tariff.

The Tariff Board has recommended that outdoor circuit breakers in the 15,000 to 38,500 volt class will be entitled to concessional rates of duty only if their rated breaking capacity is 2,500 megavolt amperes, instead of 1,500 megavolt amperes as was previously the case. This means that outdoor circuit breakers in this voltage range exceeding 1,500 M.V.A. but less than 2,500 M.V.A. become dutiable under the proposed increased protective rates of 32i per cent. British preferential tariff and 50 per cent, otherwise, which rates are also recommended by the board for application to outdoor circuit breakers not specifically mentioned by voltage rating and breaking capacity.

The Tariff Board recommended no change in the rates of duty applying to carpenters’ woodworking planes of metal, but recommended that tariff provision be made for other types of planes, for example, wooden jack planes, at rates of free British preferential tariff and 71 per cent, ad valorem otherwise. These recommendations are incorporated in Tariff Item 219 (c) (4).

Plain clear sheet glass now become* dutiable at protective rates of 17 i per cent, ad valorem less ls. 6d. per 100 square feet under the British preferential tariff and 17 i per cent, ad valorem under the intermediate and general tariffs.

In regard to gelatine and animal glue, the Tariff Board has found that the existing ad valorem duties are adequate to protect local industry. However, the board recommended that the fixed rate duties which have been in operation since 1933 be increased to a level more consistent with present-day values.

Following inquiries on abrasives, the Tariff Board has recommended that a protective tariff at rates of 17i per cent, under the British preferential tariff and 30 per cent, otherwise be imposed on abrasive cloth and abrasive paper. However, concessional tariff treatment is being given to large-size rolls of certain abrasive papers and cloths which are further processed by Australian manufacturers of abrasive products.

Mosquito spirals and coils are at present covered by protective duties and these are proposed to be removed. In this case the Tariff Board found that there has been a change in consumer demand from combustible mosquito repellents to the new spray-type insecticides. The board also found that very high rates of duty would be required to give effective protection to the local product and that this could not be justified on economic grounds. The rates of duty now become free under British preferential tariff and 7£ per cent, ad valorem Otherwise.

The high protective duties on parts for “ I “ beam axle assemblies are being reduced. In implementing the Tariff Board’s findings, it has been possible to simplify administrative procedures by deleting item 359 (g) previously applying to “ I “ beam axle assemblies and allowing these goods to be catered for by the provisions in items 359 (d) and 359 (f) relating to motor vehicle parts generally.

Protective rates of 5 per cent. British preferential tariff and 22£ per cent, otherwise are now imposed on slide viewers and slide projectors and also on single-flash bulb type photographic flash lights.

On drafting machines protective duties of 10 per cent, under the British preferential tariff and 17i per cent, under the intermediate and general tariffs are being imposed. Previously, these goods have been admitted at non-protective rates of duty.

The new rates of duty on air-turbine operated dental engines are 10 per cent British preferential tariff and 2H per cent, otherwise. This represents a reduction in duty on the operating hand-piece and the air supply controller, but an increase in duty on the air-turbine. The air-turbine was previously admitted under customs by-law.

Changes are also proposed affecting the shipbuilding industry. The existing customs and primage duties on vessels not exceeding 500 tons gross register are being amalgamated, and some drafting changes are being made, but there is no variation in the level of tariff assistance given to the Australian shipbuilding industry. Following consideration of recommendations made by the Tariff Board in its report on this industry, the Government has decided to continue the existing measures of assistance to the Australian shipbuilding industry. As honorable senators are aware, these measures include the payment of a subsidy of up to 33i per cent, of the cost on trading vessels of over 500 tons gross built in Australia for employment on the Australian coast. The existing subsidy will be continued until the end of 1964, and the shipbuilding industry will be again reviewed by the Tariff Board before that date.

Increased protection from 40 per cent, ad valorem to 45 per cent, ad valorem is imposed on marking and stamping devices when entered under the mostfavourednation tariff, but as primage duty on 5 per cent, is now removed the net result is that there is no change in the amount of duty payable on importation. There is no change proposed for the British preferential tariff rate which remains at 17i per cent, ad valorem.

There are several amendments of an administrative nature providing by-law items for certain drugs imported in small packages and for sugar substitutes used for medicinal purposes. The relevant items are item 281 (q) (2), 281 (u) (2) and 281 (v) (2), which are complementary to amendments to items 281 (l) (2) and 281 (p) (2) enacted in 1958, and item 280 (d) relating to sugar substitutes which is complementary to an excise tariff amendment designed to assist the production in Australia of sugar substitutes for medicinal purposes.

Honorable senators will, I feel sure, be gratified to see the continued erosion of primage duty in successive years. This must undoubtedly simplify the entry of goods by importers and at the same time speed up the checking of documents by my officers.

I note the absence from the chamber, because of sickness, of Senator Courtice, who was at one time a Minister for Trade and Customs. I will miss him in this debate, as he has always taken the lead for the Opposition in debates on customs tariff matters. I am sure we all hope he will soon return to good health.

I commend the bill to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 930

CUSTOMS TARIFF (CANADIAN PREFERENCE) BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the bill be now read a second time.

This bill amends the Customs Tariff (Canadian Preference) Bill 1934-1959 by omitting from the item relating to motor vehicle parts the reference to “ I “ beam axle assemblies. The alteration is complementary to that being made to tariff item 359(d) in the Customs Tariff Bill 1960. I commend the measure to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 930

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the bill be now read a second time.

The provisions in this bill are complementary to those in the Customs Tariff Bill 1960, which honorable senators have already been asked to consider. The principal amendment is that relating to gelatine and animal glue. The special rates applying under the New Zealand Preference Tariff are being deleted, and the goods, when the manufacture of New Zealand, become entitled to entry at British Preferential Tariff rates. The remaining two alterations are drafting changes which are consequent on changes made in the schedule to customs tariff 1933-1959. I commend the bill to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 930

CUSTOMS TARIFF (FEDERATION OF RHODESIA AND NYASALAND PREFERENCE) BILL 1960

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 bill now before honorable senators provides for changes in the preferential duties applying to goods the produce or the manufacture of the Federation of Rhodesia and Nyasaland. Under an agreement made with the Federation late last year, Australia has undertaken to accord as from 20th November, 1959, British preferential tariff treatment to the following Federation goods: -

Non-spirituous essential oils of geranium, jasmine, lemon grass and peppermint

Unsweetened lime juice

Passionfruit pulp

Graphite and plumbago

Blocks ingots and pigs of copper, and

Nicotine sulphate spraying preparations.

These goods at present are subject to mostfavourednation treatment and, except in the case of the copper products and the nicotine sulphate sprays, this means a reduction in the duties payable on the goods. There are also some drafting changes included in the bill, but these do not involve any variation in the rates of duty on the goods concerned. The bill is commended to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 931

EXCISE TARIFF BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

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

Mr. Deputy President, the excise tariff is being amended to facilitate the establishment of a new industry in Australia, the manufacture of sodium cyclamate, which is a sugar substitute, and to permit its delivery free from excise duty when it is to be used for medicinal purposes. A complementary amendment is made to the customs tariff. I take this opportunity to assure honorable senators that the proposal involves no reduction in the duties applying to the sugar substitutes when used for other than medicinal purposes. I commend the bill to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 931

AIR NAVIGATION BILL 1960

In committee: Consideration resumed from 11th May (vide page 914). Clause 5 -

Section five of the Principal Act is repealed and the following sections are inserted in its stead: -

– (I.) Where it appears to the Minister. (7.) A notice under this section may be served personally or by post.

– (I.) A person who contravenes or fails to comply with a provision of this Act is guilty of an offence. (7.) Nothwithstanding the preceding provisions of the section, the regulations may make provision for or in relation to other consequences (in addition to punishment for an offence) of contravention of, or failure to comply with, a provision of this Act or the regulations or to ensure compliance with a provision of this Act or the regulations.

– (1.) The Governor-General may make regulations, not inconsistent with this Act. (2.) Without limiting the generality of the preceding provisions of this section, the regulations that may be made under the powers conferred by those provisions include regulations for or in relation to -

the provision of compensation to a person who suffers loss or damage or incurs expense in or as a direct result of the removal or marking of a structure or obstacle under regulations referred to in the last preceding paragraph;

Any provisions of the regulations may be expressed to apply to and in relation to Australian aircraft, persons on board Australian aircraft, and members of the crews of Australian aircraft, outside Australian territory.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Sir, I briefly remind the committee that, at the time we adjourned last night, we were discussing an amendment which had been proposed by Senator Wright. The first purpose of that amendment was to delete proposed new section 22 (7.).

The primary purpose of proposed new section 22 as I explained, I think, last night is to make a person who fails to comply with a provision of the act guilty of an offence and to be subject to punishment by a fine or imprisonment. It could be argued that, the Parliament having provided for a specific consequence of a contravention of the act or regulations, as a presumption or necessary implication this would be the only consequence.

The purpose of proposed new section 22 (7.) is solely to negative this presumption or implication. This is very necessary because in certain cases in addition to punishment it may be considered appropriate to provide for other consequences considered to be necessary to secure and ensure public safety. I mentioned one or two of those things last night, such as the suspension or cancellation of a licence as a result of a conviction under the act and the imposition of a fine. I was reminded after the Senate adjourned last night that that is not dissimilar to the case where a motor driver, subsequent to conviction, has his licence suspended.

Sitting suspended from 12.45 to 2.15 p.m.

Senator PALTRIDGE:

– Prior to the suspension of the sitting I was dealing with the amendment proposed by Senator Wright. 1 had partly explained the reason why the Government could not accept the amendment. As I said last night, proposed subsection (7.) is necessary because the State acts have application to the regulations and not the principal statute. To that I would simply add that the matter having come to the Parliament in the form that it has, the Regulations and Ordinances Committee, being interested in this matter, apart altogether from honorable senators and members of another place, who have the right to move for the disallowance of a regulation, is alerted, if that be necessary, to the type of regulation which may be promulgated. This bill having been placed before the Parliament with the stated desire of reducing the regulation power to the minimum, I suggest to honorable senators that proposed sub-section (7.) contains nothing that needs be feared. This is regarded as a very necessary provision and there is no intention that it will be used nor, with the oversight of the Senate committee, could it be used in any objectionable way.

The second part of Senator Wright’s amendment proposes that in lieu of proposed sub-section (7.) the following subsection be inserted: - “ (7.) If a person obtains a declaration from a court that the installation does not cause interference as mentioned in sub-section (1.) of section 21, the Minister’s direction shall be of no effect.”.

Honorable senators will recall that we discussed this matter earlier in the debate. I regret to say that Senator Wright’s amendment is not acceptable, mainly for the reasons 1 explained earlier. His amendment appears to have the effect of suspending the Minister’s right to take corrective action until the matter has been reviewed by a court and the need for such action has been upheld. Even the quickest court proceedings could involve delay which, in some circumstances, could be disastrous. The delay may be increased while appeals, if any, are pending. As I explained earlier, the primary purpose of the section is to ensure the safety of aircraft and in so doing the time element is important. For that reason I regret that I cannot accept the amendment.

Senator WRIGHT (Tasmania) 12.201. - I wish to make one or two comments. First I address myself to the second part of my amendment which seeks to permit a court to intervene as a further recourse that an individual may have against a Minister’s direction. It is odd to find every authority or official who claims increased power, thinking that that power is the most important little power under the Constitution. To argue that court delays would frustrate the substantial purposes of the legislation does not reveal a proper understanding of the procedures of courts. If any real urgency could be demonstrated by the Minister indicating that delay should be prevented, the courts would always find it possible, by orders for speedy hearings and by abbreviating hearing times, to see that mere delay did not frustrate urgent action that may be necessary.

The Minister has based his refusal to accept my amendment solely on the ground of court delay. Not a word was said about the absolutely unqualified power that the Minister wishes to have. Whether the Minister’s information be based on an inspection, a test or otherwise, however flimsy the matters upon which he has based his decision may be, the ipse dixit of the Minister must prevail. That is a principle in public administration that I will contest as long as I have the authority from the electors to represent them in this place. I think that executive action shows itself at its best when it defers to the traditional safeguard that individuals are given against an abuse of that action by recourse to the courts. I say that because I find that in this place it is necessary to state a simple principle of justice many times over lest it be utterly lost as a right. The court must be protected against possible abuse by executive action of an arbitrary character, which prevails notwithstanding any declaration the court may make after taking full evidence and being satisfied that the Minister’s decree was based on a wholly mistaken premise.

With regard to the other part of the Minister’s statement, I remind him that in the realm of naval defence the Regulations and Ordinances Committee had occasion to direct attention to the arbitrary character of a similar naval defence regulation some four or five years ago, and that the regulation was promptly disallowed, or withdrawn by the appropriate Minister. It would be possible, by means of the regulations, issued under this legislation to provide for the punishment of a person who had caused interference by a heavy fine or by imprisonment, and it would also be possible to provide for compensatory payments to be made by the person who had caused the interference. I view with dismay the amplitude of the power sought to be given by regulation, lt goes beyond what a court of justice may think is appropriate punishment in the circumstances. I cannot satisfy my mind that, in the wide general terms in which it is phrased here, even in the peculiar circumstance that the regulations and the regulations alone direct the State authority, it is justified.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I should like to say something on the proposed amendment and on what has been said in the debate to-day. I do not think I would be prepared to support the view that this is a question of the say-so of the Minister being absolute and arbitrary. I think that, in the situation contemplated in proposed new section 21, the dominant consideration is safety in the air. One can imagine an interruption to aeronautical aids when there is, say, fog over an aerodrome. An interruption could occur suddenly, through some defect in an installation in the neighbourhood of the aerodrome, when aircraft were stacked over the aerodrome, waiting an opportunity to come in to land. They could be waiting to be guided in by instruments which were affected by some plant in the vicinity. A mobile plant might be brought to the vicinity of an aerodrome and, through some defect, might upset the very delicate machinery that is used by the Department of Civil Aviation to guide aircraft which are in difficulties.

What is called for in such a situation is immediate rectification. As I understand the position, the civil aviation authorities have very efficient apparatus for detecting quickly sources of interference In the not unusual case of fog obscuring an aerodrome and aircraft being in difficulties, there must be immediate rectification of any interference. As one who travels a good deal by air, I should like to think that power was vested in somebody to take immediate action. This is not a matter of arbitrary power being vested in an individual. This is not a matter of executive authority interfering with liberty. This is more a matter of somebody having authority, in an emergency, to take immediate steps to ensure the safety of aircraft and of the people in them. That is the dominant consideration, to my mind.

I had an opportunity to confer with an officer of the department to-day. 1 learned from him that most of the faults requiring rectification are minor faults, as, for instance, defective wiring. The adjustment can be done on the spot very quickly, and normally the cost of the operation is in the vicinity of £3. I understand that the greatest expenditure involved so far is about £100. I submit to the committee that large expenditure will not be involved, judging from what has occurred hitherto. The procedure has been quite satisfactory so lar. It has been used in cases of emergency to correct a situation which needed immediate correction.

It seems to me to be inappropriate to ask that a court be permitted to adjudicate in cases involving such small sums.

Senator Wright:

– I am not thinking of matters so small as that.

Senator McKENNA:

– I should imagine that to be the case, but I am saying to the committee that I am informed that the sums involved are very small. If what 1 have been told is correct, then, having regard to the purpose of the provision, it would seem to me that to accept this amendment would be to introduce an element that would detract from safety. If we were to project a court into situations such as I have mentioned, and even if the court were to dispose of matters summarily and without further delay, the proceedings would still take time. Circumstances could arise almost in a minute that demanded immediate rectification. I should say that it would be unwise and impracticable to project a court hearing into such a situation. I appreciate that Senator Wright’s amendment was not directed at situations where the rectification work required would involve an expenditure of only £3, but the information I have gathered from the department, which has influenced me in the comments I am now making, is that that is the kind of expenditure involved. I think it proper that emphasis should be placed on the safety aspect.

I pass to the second leg of the proposed amendment which relates to sub-section (7.) of proposed new section 22. Any contravention of the act is, by that proposed new section, an offence punishable on indictment with a fine not exceeding £500 and imprisonment for up to two years. That is a very heavy penalty. There seems to me to be real strength in the argument of the Minister that the legislature, in imposing a specific penalty, might be deemed to have dealt with all phases of the situations that might cause a prosecution. In other words, it might be assumed that as the legislature has said that for that offence a certain penalty is provided, that is the beginning and the end of the matter. I think the committee will agree that that is a normal concept in law. But there are many circumstances that could arise which would require further action. I refer to circumstances such as the grounding of an aircraft, or refusal to allow it to take off. The detention of an aircraft might be necessary if it were not airworthy.

Senator Paltridge:

– Even movement on the ground comes into it.

Senator McKENNA:

– It might involve even the movement of aircraft on the ground to a position of danger to other aircraft. I can conceive of many such matters. I can conceive the situation that the pilot of an aircraft has been prosecuted for failing to comply with the act. Having regard to the nature of the offence, it may be necessary to go further and suspend the pilot’s licence, or perhaps to cancel it. The pilot has his remedy, under this bill, of an appeal to a board of review or a court, but the safety factor demands that the imposition of a fine or a sentence of imprisonment should not conclude the matter.

There are in the regulations that have been operating up to this time many regulations dealing with the detention of aircraft, with the grounding of aircraft under certain circumstances, and, above all, with the suspension of certificates. Regulation 266 provides -

Where the Director-General -

has reason to believe that the holder of a licence or certificate issued under these Regulations has contravened or failed to comply with a provision of these Regulations; or

is of the opinion that it is necessary, in the interests of public safety, that a licence or certificate issued under these regulations should be suspended or cancelled, the Director-General may, by notice in writing served on the holder of the licence or certificate, call upon the holder to show cause why the licence or certificate should not be suspended or cancelled.

That has been a very necessary provision. I think that by inserting sub-section (7.) in proposed new section 22 the department is wisely negativing a presumption that might flow from the incorporation of a penalty in the act itself. There was a presumption that that might conclude the matter and that no further punitive action would be taken. It seems to me that the Minister has addressed to the committee a very powerful argument, and I indicate that it is one I accept.

Amendment negatived.

Senator WRIGHT:
Tasmania

.- The consideration of clause 5 is a very long task and involves reference to many provisions of the proposed act. Unless any honorable senator wishes to address himself to provisions that come before paragraphs (g) and (h) of proposed new section 26 (2.), I shall proceed to move amendments in respect of those paragraphs. Before doing so, however, I wish to make an observation regarding the width of the regulationmaking power that still prevails under proposed new section 26. I referred to this matter last night during the second-reading debate.

Proposed new section 26(1.) states -

The Governor-General may make regulations, not inconsistent with this act -

prescribing all matters which by this act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act;

for the purpose of carrying out and giving effect to the Chicago Convention, as amended by the Protocols referred to in sub-section (2.) of section three a of this act, any annex to the Convention relating to international standards and recommended practices (being an annex adopted in accordance with the Convention) and the Air Transit Agreement;

in relation to air navigation within a territory of the Commonwealth or to or from a territory of the Commonwealth;

in relation to air navigation, being regulations with respect to trade and commerce with other countries and among the States; and

in relation to air navigation, being regulations with respect to any other matter with respect to which the Parliament has power to make laws.

So that there is, in the widest possible terms, power to make regulations in regard to any matter pertaining to air navigation that is within the competence of the legislative power of the Federal Parliament.

I mention that matter simply to indicate that it has not escaped notice. I said last night that I did not object to the provisions in the peculiar circumstances of a case in which it is necessary for the legislation to take the form of regulations so that there may be added, as an adjunct to our legislative competence within the federal sphere, matters that have been referred to by the various Parliaments of the States. If honorable senators turn to paragraphs (g) and (h) of proposed new section 26 (2.), they will notice that paragraph (g) refers to the prohibition of the construction of buildings and the restriction of dimensions of buildings, and the removal, in whole or in part, or the marking of buildings, trees or other natural obstacles that may constitute a hazard to aircraft flying in the vicinity. Paragraph (h) makes provision for compensation - of a degree that is not specified - to a person who suffers loss or damage or incurs expense as a direct result of the removal or marking of a structural obstacle under the regulations referred to in paragraph (h).

This matter has been the subject of some discussion between the Minister, his officers and me. My purpose in directing the committee’s attention to it is to indicate that as the provision is printed, the Minister is to be given power to prohibit the construction of buildings or to order the removal of buildings, while the provisions of paragraph (h) need not apply. As I see the matter, if the Minister is to be given power to prohibit the construction of buildings or to order the removal of buildings, it is necessary to require that the regulations should provide for proper compensation. I therefore move -

Leave out paragraph (h) of sub-section (2.) of proposed section 26.

After sub-section (2.) of proposed section 26 insert the following sub-section: - “(2a.) Where the regulations make provision for the removal or marking of structures or obstacles referred to in paragraph (g) of the last preceding sub-section, the regulations shall also include provision for the payment of compensation to any person who suffers loss or damage or incurs expense in or as a direct result of the removal or marking.”.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I readily accept the amendments, and I thank Senator Wright for bringing them forward. I hold the view that they will place beyond any shadow of doubt what we were in effect trying to do but what the provision, as originally drafted, did not make completely certain would be done in all cases. For that reason, I am pleased to accept the amendments.

Amendments agreed to.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The committee will no doubt recall that last night Senator Hannan raised a question regarding the service of notices either by post or by personal delivery. He referred to proposed new section 21 (7.), which reads -

A notice under this section may be served personally or by post.

The honorable senator brought forward an interesting point in regard to what might happen in certain circumstances, such as the case of an addressee not being at his usual address. I have since had an opportunity to give further thought to this matter and to discuss it with my officers. I think it would be wise to specify in the bill the address at which a notice to be served by post is to be sent. I understand that Senator Hannan has an amendment which is acceptable, and I shall be pleased to accept it if he moves it.

Senator HANNAN:
Victoria

.- I move -

Leave out sub-section (7.) of proposed section 21, insert the following sub-section: - “ (7.) A notice under this section may be served personally or may be served by post at the last known place of abode or last known place of business of the person on whom it is served or at the address at which the installation concerned is installed.”.

I do not propose to recapitulate the reasons in support of the amendment, because I think they were dealt with fairly thoroughly last night. I thank the Minister for his courtesy in accepting the amendment. In my opinion, it places beyond doubt the possibility of a person suffering iinjustice because of the failure of the Minister to serve a notice.

Amendment agreed to.

Senator TANGNEY:
Western Australia

– I am seeking information from the Minister with regard to proposed new section 7, which provides for the establishment and conduct of an Aeronautical Information Service. 1 ask the Minister whether this is to be a completely new service or whether a new name is being given to a service that is already in existence. If it is to be a new service, are there some means by which these facilities are given to companies at the present time? Will the Aeronautical Information Service provide information only to airlines engaged on international operations or also to those engaged in internal services?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– This service has been in existence for years. Provision is made for it in the regulations. This is one of the many provisions which are being lifted from the regulations and put into the act. This service is extremely well known and is an essential part of the operation of civil aviation services. It is provided for in the convention to which Australia is a party and is in force in every convention country. All that is proposed now is the inclusion of the provision in the act rather than in the regulations.

Before we pass from clause 5, I want to move for the inclusion of an additional proposed new section. As I indicated in my second-reading speech, all the State air navigation acts provide that where a power or function is vested in a Commonwealth authority under the Commonwealth regulations, like powers and functions are vested in the same authority for the purposes of the administration of the regulations as adopted by the State acts - that is to say, in relation to intra-state aviation There is no indication in the bill that the Parliament contemplates that a Commonwealth authority will be authorized to exercise the powers and1 functions conferred under the State acts. I therefore propose the insertion of a provision which will have this effect. 1 move -

After proposed section 29, insert the following section: - “29a. lt is hereby declared to be the intention of the Parliament that an officer, authority or person having powers or functions under this act or the regulations may also have, exercise and perform similar powers or functions conferred by the law of a State relating to air navigation.”.

Amendment agreed to.

Senator TANGNEY:
Western Australia

– Proposed new section 14 provides, in sub-sections (6.) and (7.) - (6.) For the purposes of this section, an aircraft arriving in Australian territory from a place outside Australian territory shall be deemed to discharge passengers, cargo or mail if it lands at any place in Australian territory while carrying passengers, cargo or mail destined for that place or another place in Australian territory. (7.) Notwithstanding anything in the preceding provisions of this section, where it appears to the Director-General that an aircraft that possesses the nationality of a Contracting State is intended, in the course of a non-scheduled flight over Australian territory, to proceed over regions that are inaccessible or without adequate air navigation facilities, the Director-General may, if he considers it necessary in the interests of safety, direct that the aircraft follow an established air route or that the flight shall be conducted in accordance with such conditions as he specifies, and the aircraft shall comply with that direction.

If, because of climatic conditions or for other reasons, a direction were given to an aircraft engaged on a non-scheduled flight to land in a country in which it was not scheduled to land, and not to continue, would it be regarded as being in breach of any agreement?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– No. Where reasonable cause existed for effecting the landing, no offence would be committed. That provision is included in the convention.

Senator O’BYRNE:
Tasmania

.- Some time ago there was some difficulty regarding charter flights from Australia to the United States of America, and for a period they were suspended. Do the proposed provisions relating to non-scehduled flights cover charter flights made by parties of tourists or pilgrims?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Yes, that sort of flight is covered. In my secondreading speech I made particular mention of the new provisions relating to charter flights, and I referred to the fact that they were provisions that we were proposing to lift from the regulations and include in the act. The convention itself makes provision for the control of charter flights and sanctions the power of the various convention countries to impose certain conditions on such non-scheduled flights. In this bill we stipulated the sort of regulation that we will make to control these flights. Broadly, the answer to the honorable senator’s question is that charter flights made by migrants, pilgrims and others are to be covered by the proposed sections.

Clause, as amended, agreed to.

Clause 6 (Saving and continuance of regulations).

Senator WRIGHT:
Tasmania

– I ask the Minister whether, to his knowledge, this is merely a continuing clause or whether it is in any known respect a validating clause. One has only to glance at the booklet containing the air navigation regulations that operate under the 1957 act to know that this is a tremendously detailed code, containing many drastic provisions, and provisions of great import. I look upon a continuance provision as a matter of form, but I look upon a provision that validates known invalidity as something requiring specific consideration. I ask the Minister whether or not there are in existence, and in respect of which an attempt at a cure is being made by this provision, known or suspected invalidities under the existing regulations. The committee will see that the clause provides that -

The Air Navigation Regulations of 1947 . . purporting to be in force, immediately before the commencement of this Act are as valid and effectual as if they had been made under the Principal Act, as amended by this Act. and shall, subject to any regulations . . . continue in force.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

.- This clause has no retrospective application. It is a validating clause, but it validates only regulations which can be made under the legislation which we are now discussing.

Clause agreed to.

Clause 7 agreed to.

Schedules agreed to.

Title agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.

Third Reading

Motion (by Senator Paltridge) proposed -

That the bill be now read a third time.

Senator TANGNEY:
Western Australia

– I should like to pay tribute, not only to the Minister for Civil Aviation (Senator Paltridge) and the officers of his department for the way in which they have prepared and handled this measure, but also to all the employees of the Department of Civil Aviation for the wonderful contribution they make to the safety of the people who travel by air in Australia. . 1 do so particularly because I come from a State which is very airminded and which depends a great deal upon air travel for its development. It is always pleasing to me, when visiting remote areas, to see how officers of the Department of Civil Aviation carry out their duties. Many of them are working in isolated spots and in geographical positions where conditions are very severe. Some of them are on remote islands and in other places that do not have the usual amenities. I take this opportunity to pay tribute to all officials of the Department of Civil Aviation, from the most important down to the most humble person engaged in that very important part of our transport system, for the very good work they do.

Question, resolved in the affirmative.

Bill read a third time.

page 937

STATE GRANT (SPECIAL ASSISTANCE TO SOUTH AUSTRALIA) BILL 1960

Second Reading

Debate resumed from 10th May (vide page 864), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Certain of my colleagues from South Australia who propose to address themselves to this measure will be in the chamber in a few moments. In the meantime, I shall offer some comments on behalf of the Opposition. Any legislation in this chamber which is based upon a report of the Commonwealth Grants Commission always attracts my attention. I have had the opportunity to peruse the report and consider the measure.

I notice that the Commonwealth Grants Commission addressed itself, with its usual great care, to the problem it had before it. lt is interesting to note that South Australia has gone out of the field of claimant States, but there were two carryovers with respect to which the State had claims. They related to the years 1957-58 and 1958-59. As the Senate knows, in recent years grants have been made on the basis of two payments - one a lump sum payment in the actual year of the accounts and the other two years later, after the accounts have been audited. The Commonwealth Grants Commission has always adopted the attitude that it would not concern itself with accounts that had not been settled and audited. So South Australia was entitled to grants with respect to the years 1957-58 and 1958-59. It has already been paid one of those grants. Speaking from memory, I think it was of the order of £397,000. If my memory serves me aright, the State is now an applicant for £1,027,000.

Senator Scott:

– Is that the last one to which South Australia will be entitled?

Senator McKENNA:

– It is the last one. It is merely an adjusting amount. It is not a payment with respect to the present financial year, it is a payment made this year with respect to an obligation of the Commonwealth to the State for the last financial year.

Normally, this adjustment would not be made until next year, but it is thought undesirable to have a State that is no longer a claimant State figuring in a grant, on the recommendation of the Commonwealth Grants Commission, with the two claimant States in the one year. Accordingly, the amount is being adjusted now to put South Australia clearly in the position of a nonclaimant State.

I congratulate South Australia upon the new status it has achieved in that direction. It is good to see any element of dependence of any State upon Commonwealth bounty being dispensed with. T am sure South Australia will be appreciative of the readiness of this Parliament to allow it the grant year after year, in common with Western Australia and Tasmania. The fact that South Australia is no longer a claimant State will make it rather easier for the Commonwealth Grants Commission to determine the Australian standard. The basis for this determination in future will be four States instead of three, and the commission will be concerned with the problems of only two States.

In the existing circumstances, I do not propose to extend my remarks further to indicate, as my colleagues will indicate in greater detail, that the Opposition very cordially supports the measure and congratulates South Australia upon the attainment of its new dignity.

Senator PEARSON:
South Australia

– As a South Australian, naturally I heartily commend the bill now before the Senate. I am sorry that Senator Ridley is not here to precede me, but I assure Senator McKenna that, in the short speech he made, he did a very good job in deputizing for him. I accept the wishes that Senator McKenna extends to South Australia on the new status it enjoys.

As the Minister has pointed out, at the Premiers Conference held in lune, 1959, the South Australian Premier agreed that henceforth South Australia would not be a claimant State but would emerge as a completely financially independent State and would no longer make claims upon the Commonwealth through the Commonwealth Grants Commission unless exceptional circumstances made such a step necessary. South Australia has now emerged from her former role of claimant State and has accepted the obligation of becoming a financially independent State, willing to make every effort to fulfil the obligations that rest upon it as such. South Australia has been a claimant State for years, and I am very pleased that it has accepted the obligations which naturally rest with non-claimant States.

In the short speech he made, Senator McKenna stated accurately that for years the Commonwealth Grants Commission has followed the practice of making a final review of grants two years after the initial payment is made. In other words, the commission reviews the grant two years after the official accounts of the State have actually closed. He has pointed out that because of this procedure, South Australia is due to receive an adjustment of grants made originally in 1957 and 1958. But the adjustment for 1957-58, as he pointed out, was dealt with by the States Grants (Special Assistance) Act 1959, which I think was passed by this Senate late in 1959. The bill now before the Senate authorizes a payment of £1,027,000 to South Australia, representing the final adjustment for the financial year 1958-59. Let me say that the prompt action taken by the commission is thoroughly appreciated by the South Australian Treasurer and other South Australian officials. Likewise-, the fact that the submissions made to the commission by the South Australian Treasurer on behalf of his Government were accepted in full is also much appreciated by the South Australian people. Further, South Australia is very gratified that this Parliament has agreed to the recommendations made to it by the Commonwealth Grants Commission and that it has brought forward this legislation some months earlier than would normally have been the case.

The measure before us is particularly welcomed at this time because of the very trying period, from a financial point of view, from which South Australia has just emerged. This has been caused by the serious drought that South Australia has experienced. It was an exceedingly severe drought of exceptionally long duration, and the people of South Australia are therefore particularly appreciative of the financial adjustment that is being made by this legislation. We had last year undoubtedly the driest period in South Australia’s history, and of course, the financial accounts of the State suffered as a consequence, for instance by reason of reduced receipts for freight carried on the railways, and also because of the heavy commitments which the Government found it necessary to undertake in arranging for water to be pumped from the river Murray region to the metropolitan area. 1 think the pumping programme costs about £50,000 a week. Whatever may be the cost of it, however, I believe the South Australian Government is to be highly commended for its foresight in harnessing the river Murray for the purpose of supplying water to the metropolitan area and to country districts en route, thus avoiding the possibility of a complete breakdown in the supply of water, which would undoubtedly have occurred if the Government had not taken this action.

I might remind honorable senators that the city of Adelaide has been completely free of water restrictions throughout the summer, despite the fact that South Australia experienced this very severe drought. This is a fact that I think should be brought to the notice of the Senate, and particularly of the South Australian people at large. The South Australian Government has sought to make some arrangements over the years to guard against the possibility of serious water shortages, and it is typical of that Government’s efficiency and foresight that it has now succeeded in doing so.

South Australia has, over the years, made great efforts to supply water, mostly from the river Murray, to various centres in the State. It has devised means of taking this water to places as far afield as Whyalla, which is a great distance from Morgan, where the water is initially pumped from the river Murray. This is a remarkable achievement in itself. The Playford Government deserves commendation for its efforts in supplying the people of South Australia with water. Its achievements make a remarkable story, and one which I think is not fully appreciated.

I believe every person in South Australia was thrilled by the broadcast made recently by the Premier, in which he outlined proposals to proceed with the construction of a dam which will be the biggest in Australia, and which will cost some £9,000,000. I hope the Commonwealth Government will take some practical interest in this tremendous project. The Premier has said that in the short space of ten years from now South Australia will be unable to proceed further with its programme of expansion because of shortage of water. To my mind - and I think every South Australian will agree with me - it is unthinkable that we should be faced with what seems almost a desperate position. I do not think the Premier has made this statement idly. I believe he has had advice from his departmental officials, and we must accept this statement on its face value. It is unthinkable that our progress should be halted within ten years, particularly when the Premier has told us that the proposed dam will provide an ample source of water from which South Australia can draw adequate supplies to provide what is necessary for the development of the State for many years to come. 1 repeat that I hope the Commonwealth Government will come to the party in some way and help South Australia financially to go ahead with this project.

Senator Hannaford:

– Has not the Commonwealth Government stated that it will help?

Senator PEARSON:

– Unfortunately it has not done so as yet, but I hope that it will, and that South Australia will eventually receive some sort of assistance from the Commonwealth Government.

The story of Sir Thomas Playford’s foresight and energy is part of the story of what 1 might call the Playford era in South Australia. I use this term to refer to the period of more than twenty years during which the present Premier has presided1 over the State. For about half that period I sat behind Sir Thomas in the House of Assembly, and I can speak with some authority on these matters. I know him to be a fearless protagonist of what he believes to be in the best interests of South Australia. During the time in which he has been the Leader of the South Australian Government, he has initiated legislation which I think we can all agree has been presented without fear or favour, has not been coloured by class distinction, and has been what the Premier has believed to be right for the citizens of the State. The era has been one of unparalleled expansion. The few remarks I have made this afternoon regarding the provision of water in South Australia are only part of the story. The Playford era, as it will undoubtedly be known in South Australia’s history, has been a great one. The Premier has his critics. There are persons who hold different views from his on matters of principle and detail, but those persons cannot deny that over a long period he has proved himself to be at least a great South Australian. He richly deserved, I may say, the high honour that was bestowed on him by Her Majesty the Queen some two or three years ago.

In this period of twenty years or more, South Australia has come from behind - in racing parlance - and has now reached the front in many respects. Its record in the employment field is, I think, the envy of the other States with the possible exception of Victoria. South Australia’s unemployment figure has been consistently at the rate of 1 per cent, to 1.1 per cent, over many months now. I think that that record is rivalled only by Victoria’s record in excellence.

Savings banks deposits, which, I think, reflect the true cash savings of the people, are higher in South Australia than in any other State, and South Australia’s population increase has been higher, pro rata, than that of any other State. Likewise, South Australia’s intake of immigrants has been the highest pro rata.

South Australia has come from being essentially a primary producing State, as it was until a few years ago, to a fairly important industrial State. There have been consequential benefits to its people and to the economy generally. That has been proved during the recent bad agricultural seasons through which South Australia has passed. The people of that State felt, on the whole, only a ripple on the surface compared with the economic consequences that they might have suffered from such a drought. That is not to say, Mr. Deputy President, that South Australia’s agricultural industry has suffered in any way. The State’s most efficient Department of Agriculture ensures that the primary industries of South Australia will not suffer as a result of this industrialization.

The fact is that South Australia has emerged from being a primary producing State, as I have said, and has become an important industrial State. South Australia has now emerged, as a result of this little bit of history we have seen taking place in the last few months, from being classified as a claimant State to a condition of independence of Commonwealth grants based on the recommendations of the Commonwealth Grants Commission.

Reference was recently made by some honorable members in another place, who should have known better, to many aspects of South Australia’s economy. Those honorable members implied that South Australia was dragging its feet - that it was behind the other States. One honorable member referred to the roads in South Australia.

Let me say that the condition of our country roads in particular, in my opinion, has improved immensely. After having been in a bad state they are now the best roads 1 know of in any State with the possible exception of Victoria. There is no doubt that South Australia’s country roads, the arterial roads - they are the Government’s responsibility; the others are a local government responsibility - are in a good state, to say the least. The only possible exception may be the Eyre Highway, as it is called, and I understand that work to repair that road has already begun.

In the field of education, South Australia has nothing to be ashamed of either. In order to cope with the rapid increase in child population, the vote in South Australia last year, covering all phases of education, was above the average in the Australian States. 1 have been reliably informed - and 1 noticed a reference to this matter in the Adelaide press yesterday - that the figure is above £12 per head of population, excluding land and buildings. If land and buildings were taken into account, according to the press the total expenditure on education in South Australia would be £17 or more.

I shall compare South Australia with the other States in this respect. Tasmania spends more on education per head of population than any other State. Exclusive of land and buildings, that State spends £12 19s. 6d. per head on education. Western Australia spends £12 18s. lOd. per head. The figures I am quoting are for the year 1958. In that year, New South Wales spent £11 19s. 6d. per head, but Victoria, I am sorry to say, was spending, on the same basis - that is, excluding land and buildings - only £10 6s. per head, and Queensland was spending £9 lis. Id. per head.

Senator Ridley:

– Do those figures relate to the same year?

Senator PEARSON:

– The “Advertiser” quoted later figures than I have which, as I mentioned, refer to 1958; the “Advertiser” quoted figures for 1959.

Senator Ridley:

– I thought that they differed from the figures that were mentioned in the report of the Commonwealth Grants Commission.

Senator PEARSON:

– The figures I have quoted were supplied to me by the Treasury. I do not know the figures to which Senator Ridley is referring.

Senator Ridley:

– I am suggesting that the figures you have quoted refer to the year 1958-59.

Senator PEARSON:

– Yes, the figures for the other States refer to 1958, whereas the “ Advertiser “ figures were for 1959. They were therefore more up to date than the figures I have quoted. I should say, Si., that the figures 1 have quoted were supplied to me by the Under-Treasurer of South Australia.

In conclusion, Mr. Deputy President, J just want to say that the step that the Premier of South Australia has taken on behalf of his Government in deciding to refrain from lodging claims in the future, and to stand on his own feet financially, is a courageous one. It is something of a gamble, may I say, on the part of the Premier of South Australia, and I am sure that all honorable senators commend his attitude and wish, both him and the State well. Senator McKenna very generously has done so. I feel that all honorable senators, whatever their political affiliations may be, will join me in wishing South Australia well in her new role. The fact that, so early in that new role she has suffered a crippling blow from a drought is unfortunate. However, I think that the South Australian Government will face the situation courageously, having as it has a capacity for wise and sound administration, which has brought it to the present stage, of which South Australia is so justly proud. I have very much pleasure in supporting the bill.

Senator RIDLEY:
South Australia

– As has been pointed out by the Minister for Civil Aviation (Senator Paltridge) and the two previous speakers in this debate, the bill authorizes the payment to South Australia in 1959-60 of a special grant of £1,027,000, representing a final adjustment of the special grant received by that State in 1958-59, consequent upon an undertaking given by the Premier of South Australia at the Premiers’ Conference in June, 1959, that, unless exceptional circumstances arose, his State would not apply for a special grant during the currency of the new revenue grant arrangements to cover a period of six years.

The Commonwealth Grants Commission, in a special report, has recommended the granting of this amount as a reasonable adjustment. That report also states that this amount is the amount claimed by the State at a conference in Adelaide in February of this year. The report also states that this claim was not opposed by the Commonwealth and that, per medium of the Treasury, the commission was advised that the Commonwealth Government desired the necessary legislation to enable the payment of this sum to be passed during this financial year. Therefore, there has been no controversy concerning the amount of the grant, and this is merely a machinery winding-up of the old procedure in accordance with an agreement that was reached at the Premiers’ Conference I have mentioned.

The result is that no longer will South Australia be a claimant State. The Labour Party does not oppose the bill; indeed, it would be purposeless for it to do so. But our support of the bill does not mean that many people, both within the Labour Party and outside, do not have grave doubts as to the wisdom of South Australia agreeing not to become a claimant State in the next six years. As Senator McKenna pointed out, at first blush it would be natural for any South Australian to feel some sense of gratification that his State was no longer to be a claimant, or mendicant. State, but it would take only a moment’s reflection to realize that such thoughts are shallow in the extreme. 1 do not believe that Western Australia and Tasmania need be ashamed of the fact that they are claimant States. Nor did 1 believe that South Australia had any need to feel ashamed of being a claimant State. If a new state were formed in the Northern Territory no reasonable person would suggest that that state should be held in contempt if it became a claimant state. I know that some honorable senators and some members in another place are irked when any attempt is made to debunk the Playford myth. I agree that Sir Thomas Playford is a good South Australian inasmuch as he fights for the rights of South Australia, but it is folly to suggest that

Sir Thomas Playford is in any way on his own in that regard. Some people are apologists for Sir Thomas Playford in any circumstances, and in respect of this matter there are indications of an attempt to place Sir Thomas Playford on a pedestal and hold him up as the person responsible for putting South Australia in the position of being no longer a claimant State. The report of the Commonwealth Grants Commission indicates that the proposal that South Australia be no longer a claimant State did not come from that State. The proposal was agreed to unanimously by the six States and involved a different method of payment to the States. In this connexion the report reads -

At a conference of Commonwealth and State Ministers in June, 1939, it was agreed unanimously to adopt for the next six years a new system of Commonwealth payments to the States. So far as South Australia was concerned the annual grant payable under the new system was intended to replace not only the tax reimbursement and supplementary grant hitherto paid to that State each year but also the special grant . . .

That would indicate that prior to attending that conference Sir Thomas Playford had no idea that South Australia would cease to be a claimant State. The report states that he had a claim to place before the conference for a special grant. If we consider the background against which that conference was held some light may be thrown on the way in which the new system of payments to the States was evolved. I recall that both Victoria and Queensland indicated that they were dissatisfied with the existing system of grants and that they intended to become claimant States. I remember speaking to Mr. Cahill in April of that year, prior to the June conference and following the return to office of the Labour Government in New South Wales. I was pointing out to Mr. Cahill how his Government was returned to power despite the efforts of the press, and I compared the position in New South Wales with that obtaining in South Australia, where the Playford Government had been returned to office, once more with the active assistance of the press, and, of course, supported by gerrymandering.

Senator Laught:

– What do you say about gerrymandering in New South Wales?

Senator RIDLEY:

– Two wrongs do not make a right, if gerrymandering does exist in New South Wales, which I do not concede for one moment.

Mr. Cahill pointed out to me at that time that the press of New South Wales would have difficulty in continuing to malign the New South Wales Labour administration when all the indications pointed to that State being the only nonclaimant State. The anti-Labour governments and anti-Labour parties would have been in a peculiar position if New South Wales, under a Labour government, had been the only non-claimant State. That may have been a factor influencing the adoption of the new system of grants whereby the payments to the States were raised sufficiently, not only to silence the claims coming from Victoria and Queensland, but also to hold out a bait to South Australia to become a non-claimant State. It is true that the inducement held out was not sufficiently high to offset the special disabilities mat existed in Western Australia and Tasmania. The new system of grants was evolved to induce South Australia to become a non-claimant State. Although South Australians may feel a sense of pride in the knowledge that their State is no longer a claimant State, they should bear in mind that South Australia ceased to be a claimant State not under the then existing system of grants but under a new system. It is a fallacy to suggest that South Australia became a non-claimant State because of the vast improvements made in that State. Any pride that we may have in that achievement should be tempered by realities and not by a false assessment of the position. The thought that goes through my mind in considering the matter is that if, under the new agreement, South Australia is financially better off, that supports everything that I have just said, and the action in becoming a non-claimant State had nothing to do with its relative financial position. If, on the other hand, South Australia did make a financial sacrifice to become a non-claimant State, that must have been done at somebody’s expense. The increases in hospital charges, and the broadening of the field of those paying for hospital treatment to include pensioners, indicates that South Australia is not now able to spend as much on its hospitals as it would have been able to do if it had remained a claimant State.

I quote now from the Commonwealth Grants Commission’s report. Paragraph 6 reads -

It should be explained that a net favourable adjustment is the amount judged by the Commission to be a measure of a claimant State’s special efforts to meet its own financial need. The judgment is based mainly on comparisons with the non-claimant States of the levels of State taxation, of charges for State services, of expenditures on social services, and of the impact on the budget of the financial results of State business undertakings. The procedure by the Commission in forming this judgment is more fully explained in the 26th Report (19S9).

I interpret that to mean that a claimant State could spend money on social services, hospitals, and other such things, at rates comparable with those of the non-claimant States. If, as 1 suggest, there are indications that the recent increases in hospital charges, and the broadening of the field of those required to pay so that it includes pensioners, have resulted from South Australia becoming a non-claimant State, then the decision made by Sir Thomas Playford was not only an unwise one, but possibly an evil one.

Senator Pearson:

– South Australia was not the only State to increase hospital charges.

Senator RIDLEY:

– That may be so, but it is not only hospitals that are involved. South Australia lags behind other States in the amount of money that it spends on social services. If that position is due to the fact that it was not possible for South Australia to obtain a special disability grant, then I say that the decision to become a non-claimant State was unwise. If those effects were foreseen, I would say that the decision was an evil one.

There are other factors in South Australia’s economy that should be taken into consideration. I intend to quote from the 26th report of the Commonwealth Grants Commission, which indicates that social service payments in South Australia lag very much behind those in the claimant and nonclaimant States. As I have indicated previously during the discussion of other matters in the Senate, I am somewhat sceptical of the value of quoting statistics to support an argument. I have learned from bitter experience that it is possible, by selecting favorable items in a report and conveniently forgetting unfavorable items, to produce a result that is completely contrary to the truth. In quoting from this report, I do not intend to select only one item, as Senator Pearson did when he mentioned education only. At pages 122 and 123 of the report a list of items is set out under the heading, “ State Expenditure on Certain Social Services from Consolidated Revenue and Special Funds “. The list includes education, health, hospitals and charities, public health, care of the sick, relief of the aged, institutions, child welfare, law, order and public safety, administration of justice and police. The per capita expenditure for those purposes by the States is shown in a table. In South Australia the expenditure is 378s. 6d., and the average for the six States is 409s. 7d. The figures for the various States are as follows: -

I suggest that the fact that those items appear in the report of the commission is evidence that these are the items upon which the commission makes its assessment when dealing with claims for special disability allowances. I suggest, therefore, that those figures must be germaine to this discussion.

During the period when South Australia was a claimant State, deputations from the trade union movement waited upon Sir Thomas Playford on various occasions. If a request was made for something that did not apply in one of the non-claimant States, the request was refused out of hand on the ground that it would be impossible for South Australia to grant concessions that exceeded those granted in non-claimant States. lt is a fact that expenditure in certain fields by the claimant States must be on the same basis as expenditure in the non-claimant States. I am wondering now what will be the position of Tasmania and Western Australia, which remain as claimant States. Are they to have used against them the rates of expenditure in South Australia? There will have to be some very severe pruning in Tasmania and Western Australia if the rates paid in South Australia are used as a measuring rod. By the same token, if the deterioration in social services in South Aus tralia is in any way due to South Australia becoming a non-claimant State, the decision to become a non-claimant State was very unwise. I should like the Minister or other speakers on the Government side during the course of this debate to try to convince me that the decision of South Australia to become a non-claimant State will not be prejudicial to Tasmania and Western Australia. I should like to be assured that my assessment of the position is wrong, and that the low figure for social service payments in South Australia will not be used as a barrier to any improvement of social service payments in those two States.

In conclusion, I would appreciate it if the Minister, in his reply to the debate, would give me information regarding three thoughts that were left in my mind by a study of this matter. First, will the new scheme of revenue grants be equitable to South Australia, compared with the old scheme, under which South Australia was a claimant State? Secondly, if that will be the result of the scheme, does not the Minister agree that it behoves the Government of South Australia to provide for social services expenditure at least at the level of the claimant States? Thirdly, will South Australia’s deplorably low per capita expenditure on social services prejudicially affect the claims for special grants of Western Australia and Tasmania?

Senator LAUGHT:
South Australia

– I support the bill and am pleased to know that it has received most enthusiatic and unqualified support from Senator McKenna. Senator Ridley also supported it, although somewhat less enthusiastically. Nevertheless, I am sure he would not prefer the shadow to the substance. I appreciate the remarks of my colleague, Senator Pearson, in his thoughtful address on this subject. This is an occasion for the tendering of congratulations to South Australia. It was a claimant State for 30 years and has now reached the stage at which it proposes to rely on the normal grants from the Commonwealth which are based on a formula that is appropriate to all the other non-claimant States, and no longer needs the grants that are recommended by the Commonwealth Grants Commission.

The bill that we are discussing to-day ls in the nature of a heel tap, or something that was left over from a previous occasion. It is nice to know that the figure of the grant has been approved by both the Commonwealth Government and the South Australian Government. I invite the attention ot the Senate to a qualification that Sir Thomas Playford made at the Premiers” Conference in June, 1959. He gave an undertaking that his State would not apply for special grants during the currency of the new revenue grant arrangements unless exceptional circumstances arose. It should not be forgotten that that qualification was clearly stated by Sir Thomas and that it has also been stated in the second-reading speech of the Minister for Civil Aviation (Senator Paltridge). The Opposition is assured that Sir Thomas Playford will not be backward in referring to the need to meet exceptional circumstances, should such circumstances arise. That qualification is a great safeguard. His attitude in stating frankly, at the conference table last June, that South Australia would continue without the assistance afforded by the special grant will be appreciated by Prime Ministers and State Premiers for years to come. If special circumstances arise, I am sure that Sir Thomas Playford’s frankness, and also his ability to handle difficult situations, will be acknowledged.

I do not predict that special circumstances will arise in South Australia in the immediate future. I travel about the State a good deal. As Senator Pearson has pointed out, it was a magnificent achievement for the State to come through the driest period in all its history without the necessity to impose water restrictions and without having its live-stock decimated. That was largely due to the excellent farming methods that are practised there. I think it is correct to say that the employment figures published in January last showed that unemployment in South Australia was at a lower level than in any other State. In the driest period the State has experienced, it was able to surmount its difficulties.

I pay tribute to the Premier of South Australia for having created, during the last twenty years, such an economic climate that the State was able to weather the tragic and devastating drought. Senator Ridley was mildly critical of the Playford Administration, but I say that it has done wonders for South Australia. For instance, it has attracted to the State vast industries over the last few years. Is it not significant that the Broken Hill Proprietary Company Limited has plans in hand to spend between £40,000,000 and £50,000,000 at Whyalla, in an area which has a rainfall of only 6 or 7 inches a year? When that money has been spent at Whyalla, the population may number 20,000. It already includes some of the finest technicians in Australia, engaged in shipbuilding and foundry work. The proposal of the Broken Hill Proprietary Company Limited is a tribute to the goodwill that the Playford Government ha& created, with its provision of proper and adequate social services, good housing and scope for saving.

Senator Ridley cited certain figures, but I think it is appropriate to remind the Senate of some features of South Australian life which reflect directly the ability of Sir Thomas Playford to handle State finances, industrial relations and housing matters. A significant indication of the economic health of the country is the savings bank deposits throughout Australia. The figures for the year which ended on 30th June last show that the average deposits were £139 a head. The figure of £130 for the wealthiest State - New South Wales - was below the Commonwealth average, while the Victorian, figure of £163 was above the average. When we come to the sunshine State - Queensland - where there is enormous potential, we see that the figure is down, to £116. In South Australia, the State least endowed with natural resources but very well endowed with people, particularly working people, of ability, the figure is- £171. In Western Australia it is £100 and: in Tasmania £123.

I have mentioned those figures to indicate that the Playford Government, over the years, has created an economic climate in which the people have been able to savea considerable amount of money. In fact, the South Australian savings bank depositsare the highest in Australia and well abovethe Australian average. 1 go so far as to suggest that the tempo of development, which is reflected in savings bank deposits, has been responsible for the progress of South Australia and made it possible for that State, for the first time in 30 years, to withdraw from the position of claimant

State. That should bc a matter for great pride to both Government senators and Opposition senators.

From the stand-point of loan money expended, one can get a good idea of what has been going on in the various States. In citing the amounts of loan moneys expended by the States on works and services, 1 shall compare the position in States in which there are Labour administrations with the position in States in which there are non-Labour administrations, because my friend, Senator Ridley, referred particularly to the late Mr. Joseph Cahill in the State of New South Wales. I accept his challenge and cite some comparative figures. In the year ended 30th June, 1958, New South Wales spent on its railways, oldfashioned tramways and bus services, 35 per cent, of its total net loan expenditure. In South Australia the percentage spent on railways was 18 per cent, and in Western Australia, which was then under a Labour administration, it was 27 per cent. So one can see that on a railway system that was allowed to run down, as was the New South Wales system, a much higher expenditure was incurred.

In South Australia piped water goes to about 90 per cent, of the population. New South Wales spent 15 per cent, of its loan funds on water supplies, and South Australia spent 26 per cent. In regard to housing, I cannot cite the amounts provided under the Commonwealth and States Housing Agreement, but it is possible for me to cite loan expenditure. South Australia expended 12 per cent, on housing, Western Australia 4 per cent., and New South Wales only 1 per cent. In New South Wales, railways are absorbing 35 per cent, of loan expenditure, whereas in South Australia, which has a far more efficient organization, the percentage is much lower, although that State has a railway system that is more difficult to control. South Australia spent far higher percentages than did New South Wales on water supply and housing.

It can be seen that there has been prudent saving by the people of South Australia. Their savings rate is the highest in the Commonwealth. This speaks volumes for the integrity of the State Government, the people’s ability to save, and their confidence in the State savings banks. Expenditure on the things that make people happy, such as water and housing, is higher in South Australia than in any other State. I do not think that I need cite any more statistics. Honorable senators will appreciate from those that I have cited that the manner in which South Australia has managed its affairs does not call for the condemnation that Senator Ridley expressed this afternoon.

The Broken Hill Proprietary Company Limited is expending large amounts of money at Whyalla. The refinery just south of Adelaide will cost about £20,000,000. General Motors-Holden’s Limited is establishing a large annexe at Elizabeth, seventeen or eighteen miles north of Adelaide. These developments clearly show that there is great confidence in South Australia because of the economic climate provided. That confidence attracts investment in South Australia of interstate and overseas capital. So I do not think that we need doubt the wisdom of the decision of Sir Thomas Playford. At the conference to which I have referred, he did quite well, I understand, in regard to the amount allocated for roads in South Australia and in the redistribution of finance among the various States.

I hardly think that it is necessary to refer in this debate to electoral boundaries in South Australia. There was a slight sneer from Senator Ridley, who used the word “gerrymander”. Great play was made of that allegation in the other place, but it should be remembered that when the Electoral Act of South Australia was last amended, Labour members of the House of Assembly did not require the House to divide. That was simply because it did not suit a lot of Labour members to do so. The Leader of the Opposition in the South Australian Parliament represents an electorate which has possibly the smallest number of electors, and the Labour Party holds quite a number of other small electorates, such as Wallaroo and Murray Bridge. Labour representatives talk about the electoral boundaries in South Australia, but when it came to a vote in the House of Assembly, the Labour members there did not stand up to be counted? The amendment to the State Electoral Act went through on the voices, without a division.

They talk with their tongues in their cheeks when they criticize the South Australian electoral system.

Senator Ridley said that the Playford Government had the assistance of the newspapers. He used the plural word. 1 hardly think that the Playford Government gets any assistance from at least one of the South Australian newspapers. The Labour Party is part-owner of a wireless station in South Australia, so it does very nicely when it comes to an election. The position is simply that Labour supporters are a bit disappointed, because they have not been in office in South Australia for 30 years. A person in South Australia would have to be over 50 years of age to be able to say that he had voted at an election which put a Labour government into office. Labour supporters have not had much experience in office, and they are a little disappointed.

We are very proud of having this measure before the Senate. I should like to conclude by mentioning one matter in relation to which South Australia has used its own funds out of all proportion to the extent to which other States have used their funds. I think it is as well to invite the attention of the Senate to this matter because at a later date the granting of special assistance to South Australia may become urgent. I refer to the eradication of the fruit fly. This is a tremendously serious matter in South Australia. I understand that over the last few years the State Government has spent, from its own funds, well over £2,000,000 on eradication measures. It has done so without any help from the Commonwealth Government and without the benefit of co-ordination of the activities of Federal and State authorities. It is well known that the fruit fly is prevalent everywhere round Sydney and Brisbane. I understand that it is to be found also in Western Australia. Fortunately, it has not as yet become a serious menace in South Australia, thanks to the expenditure by the State Government of tremendous sums on eradication and preventive steps.

Senator Scott:

– I think it is too dry for fruit fly to live there.

Senator LAUGHT:

– That could well be but I am sure all honorable senators appreciate the tremendous damage that could be done by the fruit fly if we failed to hold it in check there. I do ask the Minister representing the Treasurer to note that although South Australia is grateful fox assistance received in me past, it does urge the Commonwealth Government to give serious consideration to the co-ordination of. activities as between the States and the Commonwealth for the eradication of the fruit fly and for the employment of patrols to guard against its entering South Australia.

Having warned the Commonwealth that exceptional circumstances may arise, 1 conclude by saying mat if the Commonwealth Government will keep a watchful and sympathetic eye on some of the extraordinary expenditure incurred by South Australia on such matters as the eradication of the fruit fly, undoubtedly that State can look forward with confidence to meeting the years ahead without the necessity for having, recourse to grants from the Commonwealth Grants Commission.

Senator DRURY:
South Australia

– As has been mentioned by previous speakers the bill before the Senate authorizes the payment ito South Australia ot £1,027,000. This sum represents the final adjustment of the special grant to be received by that State for the year 1958-59, payment of which was recommended by the Commonwealth Grants Commission in a special report which has been tabled in the Senate. This represents the final payment by the Commonwealth on the recommendation of the Grants Commission to South Australia.

I should like now to answer some of the criticism that has been levelled at the Australian Labour Party by Senator Laught. 1 admit that South Australia has made remarkable progress over the years. I should not be true to that State if I did not recognize and were not pleased with that fact. I endeavour at all times to give credit where credit is due.

But let us look at the other side of the picture. Senator Laught said that the Labour Party supported the legislation providing for the last redistribution of electoral boundaries in South Australia. I should like to point out to him that at that time the Labour Party was in a spot, and that it had been placed in that spot by the LiberalCountry League Government of South Australia. We have stated for years that there is a gerrymander in the State. The people of Australia know that it has been going on there. The tact is that the State Government offered the Labour Party hall a loaf, as it were, if it might be called that. The Labour Party had no alternative but to accept the slight improvement that was offered because it realized that half a loaf was better than no bread at all. Had the Labour Party refused the offer, that refusal would have been used against it. Our opponents would have said that the party had been offered a redistribution of boundaries and had refused it. That is why the Australian Labour Party did not force a division in connexion with the legislation providing for the redistribution of boundaries in South Australia.

I remind the Senate also of the fact that at all times the Labour Party has enjoyed the votes of the majority of the people of South Australia and that the present government is governing on a minority vote. However, the time when that position will be reversed is fast approaching.

Senator Scott:

– You hope!

Senator DRURY:

– We will live in hope and certainly we shall nevere despair. I remind the Senate that one-third of the people of South Australia elected twothirds of the government of that State. That is not a position about which the government should be proud.

I should like now to refer to paragraph 4. appearing on page 3 of the report of the Commonwealth Grants Commission. It reads -

The Commission held public hearings in Adelaide on 3rd and 4th February, 1960. At those hearings, the State representatives submitted that the Commission should recommend payment of the full amount of the budget deficit in 1958-1959, viz. £1,027,000. In support of this claim, they raised a number of matters including -

the allowance of 6 per cent. made in respect of relative difficulties in providing social services;

the calculations of the severity of the State taxation, and particularly land tax;

the adjustments made in respect to the impacts of the State budget of the financial results of State undertakings;

the determination of the budget standard.

I agree that there has been a good deal of expansion in South Australia. Only last week, when speaking to the report of the River Murray Commission, I emphasized the point that a huge amount of water had been reticulated in South Australia and that that State was becoming more and more dependent upon the Murray River for its water supply. 1 admit all these things. I also admit that the Government started pumping water to Adelaide through the M annum-Adelaide pipe-line months before it had expected to do so and this was made necessary by the fact that the year had been dry. While admitting all these things, I direct the attention of the Senate to the present social services arrangements of South Australia. First, I refer to the charge of £3 a day for hospital treatment there. One of the worst features of that charge is that it is compulsory, irrespective of whether people can afford it. Further, it has now been decided that there will be a minimum charge of 10s. for public ward treatment at the Royal Adelaide Hospital. This 10s. minimum is levied upon agepensioners - people who have no income apart from their pension and who have no assets or property exceeding £200 in value. It is true that these pensioners can join a hospital benefits fund if they so desire, but why should they have to pay something each week into such a fund, out of the small amount they receive as pension, in order to cover charges that may be made for hospital treatment? I believe that such people are entitled to free hospital treatment. If they are not, then their pensions should be increased by the amount they may have to pay into a hospital benefits fund, so that they may be able to live in reasonably decent conditions. I believe, Mr. Acting Deputy President, that the hospital treatment of aged pensioners and of the infirm should be the responsibility of State governments, and that such pensioners should not be called upon to pay anything at all for hospital treatment. They receive little enough as it is, without having to pay a weekly amount to cover any hospital treatment they may require.

But let us look at the other side of the picture. If pensioners do join a hospital fund they are asked to pay, while receiving hospital treatment, not the minimum of 10s. a day but the full amount of £3 a day. These charges are far in excess of those levied in other States. Until recently the Commonwealth was paying the States 12s. a day for every pensioner receiving treatment in public wards of hospitals, and no charge was levied on the pensioners by the

States. A pensioner holding a medical card, indicating that he did not have an income greater than £2 a week or more than £200 in capital, was not charged for hospital treatment unless he was a contributor to a hospital fund. If he was such a contributor, the amount paid by the fund was credited to his account. That position prevailed until the end of January of this year. On 1st February the Premier of South Australia introduced legislation providing that every patient in a hospital, including pensioners with medical cards, would be charged £3 a day. I understand that when accounts were sent out they included a notation to the effect that if a patient was unable to pay an account he should take the matter up with the department, and that the department would then investigate his position and determine his capacity to pay. But it was provided that if any reduction was made, the amount should still be at the rate of at least 10s. a day. Such a minimum fee was to be charged only in the case of a pensioner with no other income and with no money in the bank.

Let us now give some consideration to the amounts of money spent on health and hospitals in South Australia and in the other States. Senator Ridley gave some figures concerning this matter, but I will cite some details appearing in the TwentySixth Report of the Commonwealth Grants Commission, which is the report for 1959. The amount spent per capita in South Australia on public health was 4s. 10d., and the amount spent on the care of the sick in hospitals was 78s. 7d. Comparable figures for an average of the six Australian States were 5s. 5d. and 87s. lOd. respectively. Another situation has arisen in South Australia to which I should direct attention. lt may also have arisen in other States. When the last Commonwealth Budget was brought down provision was made for an increase of 10s. a week in the amounts granted to widows and deserted wives. Some persons in this category had been receiving additional payments from the State Welfare Department in South Australia. These payments were reduced by 10s. a week when the Commonwealth increased its payment by this amount.

The facts I have given the Senate indicate the state of affairs that exists in South

Australia with regard to social services. Government senators have eulogized the achievements of the South Australian Government, but they look at only one side of the picture. 1 have tried to show both sides of the picture. Senator Pearson, for instance, has told us that the amount spent per capita on education in South Australia is less than that spent in any other State except Queensland. Let me then point out that the amount spent per capita on relief of the aged in institutions in South Australia in the year we have been considering was 8s. 8d., which is a good deal less than was spent, on the average, throughout Australia. There are not enough institutions in South Australia for the aged and infirm, and in many cases such persons are crowded into various other government institutions.

Senator Ridley:

– In some cases mental hospitals.

Senator DRURY:

– That is so; in some cases they are sent to mental hospitals.

I support the bill, although 1 am critical of the way in which South Australia has been spending the money available to it. I hope that it has done the right thing in ceasing to be a claimant State, but only the future will show whether or not it has made a wise move.

Senator SCOTT:
Western Australia

– I should like to congratulate Senator Drury on his decision to support this measure. It is most encouraging to know that South Australia will not in future approach the Commonwealth through the Commonwealth Grants Commission for assistance. I see no reason why that State should make any further requests for assistance.

At the conference between the various State Premiers and Mr. McEwen, who was the Acting Prime Minister, in June, 1959, a new formula was agreed upon which increased from 10.72 per cent, to 11 per cent. South Australia’s share of the total allocation to the States. Therefore, South Australia’s share was increased by .3 per cent. I think that South Australia is to be congratulated on being able to do away with the special grants, to which both Western Australia and Tasmania will have to look forward for some years to come.

When the Premiers met on the occasion to which 1 have referred, it was decided to increase the formula on a percentage basis - to round it up, it was said - for New South Wales, Victoria, Queensland and South Australia. It was then considered that those States should not in future need to approach the Commonwealth Grants Commission for financial assistance. To enable South Australia and the other States I mentioned to achieve this position, the percentage allocations to Western Australia and Tasmania were reduced. In 1958-59, Western Australia enjoyed an allocation of 12.10 per cent, of the amount distributed, but now gets only 10.5 per cent.; that State has lost 1.5 per cent. Therefore, as a result of the agreement that was reached at that Premiers’ Conference, Western Australia has been placed in a position in which it must continue to approach the Commonwealth Grants Commission for financial assistance.

In the past, I have frequently heard it said in this chamber that South Australia, Western Australia and Tasmania were mendicant States. I do want want to hear them so described again, because New South Wales, Victoria, South Australia and Queensland are to get a bigger percentage of the amount distributed by the Commonwealth to the States as financial assistance and tax reimbursements than they have received before.

It is interesting to recall that when we considered this matter during the last Budget session, we did not know the amounts of tax reimbursement that would be paid to the States. We could only surmise what they would be. We now find that whereas Western Australia in the previous year received some £11,000,000 by way of special grants in the last financial year its grants amounted to only £3,500,000. Let us look at the way in which the total amount was distributed. On a per capita basis, Western Australia and Tasmania have not received as much as the other States. In 1958-59, Western Australia received a total of £27,300,000, made up of tax reimbursements and special grants; in 1959-60, the amounts rose to £28,900,000 - an increase of £1,600,000. By dividing the amount of £1,600,000 by the population of about 700,000, we establish an increase of the per capita payment to Western Australia of about £2 10s. Let us compare the position in South Australia. In 1958- 59, South Australia received grants totalling £24,200,000. The figure rose to £27,675,000 in 1959-60 plus £399,000 on the recommendation of the Commonwealth Grants Commission, making a total of about £28,000,000. Therefore that State’s allocation is up by £3,800,000. On a per capita basis South Australia had almost double the amount that was received by Western Australia. On the same basis, we find that the increase for Tasmania is £7 15s., for Queensland, £3, for New South Wales, £2 5s. and for Victoria, £2 10s. per capita. Therefore I say that although we should congratulate South Australia on being able to obviate the necessity to approach the Commonwealth Grants Commission in the future, we must realize, because of the reduction of the percentage basis on which Western Australia and Tasmania may collect tax reimbursements in the future, those States must look forward to continuing to approach the commission.

Sir, this whole position is connected with the six-years agreement that was reached at the conference between the Premiers and the Commonwealth in June, 1959. We know that the total amount of money distributed to the States was increased from £225,700,000 in 1958-59 to £244,500.000 in 1959-60. A new system of distribution was evolved. Under the provision that we spoke about during the last session, an increase of wages paid will be taken into consideration; 10 per cent, will be added to that amount. The calculation will be worked out on a per capita basis. Any increase in population compared with 1959 also will be taken into consideration. Therefore, at this very moment the States may predict, provided1 they know the increase in the amount of wages from year to year, the amount they should receive from the Commonwealth as tax reimbursement. Therefore they can plan ahead. The Commonwealth has made it plain to the States that they, in turn, must not approach the Commonwealth for an exemption from pay-roll tax and they must not approach the Commonwealth for any further assistance from year to year. The Commonwealth has told South Australia that if it gets into financial difficulties it may approach the Commonwealth Grants Commission. However, it is not expected that that situation will arise.

I hope that when the Commonwealth Grants Commission is inquiring into the financial position of Western Australia and Tasmania it will take into consideration the small amount that was granted to Western Australia this year and the need to maintain ‘the increased amounts to the States on a per capita basis. I do not believe that it is fair for Western Australia to receive only £2 5s. a head when our next door neighbour, South Australia, receives £4 5s. a head, and Tasmania receives something like £7 a head. Western Australia is a developing State. It buys a large volume of goods from Victoria. Victoria could not survive financially without the support that it gets from Western Australia. So, although Western Australia must continue to be a claimant State, I want the Senate to realize that that position was forced on Western Australia by the agreement that was reached between the Premiers and the Commonwealth in June, 1959. I congratulate South Australia on ceasing to be a claimant State. I do not want to hear that Western Australia is a mendicant State in the future.

Senator McManus:

– Who builds the bridges?

Senator SCOTT:

– We do. Also, in the future I do not want to hear that Tasmania is still a mendicant State.

Senator MATTNER:
South Australia

– The Commonwealth Grants Commission has rendered and is rendering excellent service to Australia in assessing the financial situation of each State of the Commonwealth. I have no doubt that the commission will take due notice of what Senator Scott said this afternoon. As I understand the position, the commission has assessed the requirements of the States fairly and justly. I know that Senator Scott quoted some appealing figures but when considering how much Western Australia received by way of increase this year we must also bear in mind what that State received in previous years.

However, I do not wish to draw distinctions between the States. I am sure that Senator Scott presented the case for his State admirably. I am equally sure that the Commonwealth Grants Commission will weigh very carefully his statements and will, if possible, consider and, if necessary, rectify some of the matters that he believes react adversely to Western Australia. We know that under the system of uniform taxation various formulas have been evolved for tax reimbursement to the States. As long as we have uniform taxation we will have to vary from time to time the amounts of money that are reimbursed to the States. 1 support the bill and 1 am gratified that each honorable senator who has spoken in the debate has also supported it, thereby giving credit to the Commonwealth Grants Commission for the excellent work that it does. 1 can remember how, over a period of years, the commission recommended thai South Australia, Queensland, Western Australia and Tasmania should endeavour to improve their financial positions, if possible. The commission gave those States every encouragement to do that because it envisaged that in time they should cease to be claimant States. I am pleased to know that South Australia has so improved its financial position that it is no longer a claimant State. I heard what was said in this debate about the increased grants that have been given to South Australia. Senator Scott dealt with that aspect very well indeed. As Australians we should all be happy that another State has become, as it were, self-supporting. I do not propose to go over the whole story of what has happened in South Australia. It is a story of progress. It is a story that portrays the efforts of employer and employee alike. South Australia has had less unemployment in recent years than has any other State. Industrial relations in South Australia have been better than have existed anywhere else in the Commonwealth. I am sure that honorable senators on both sides of the chamber rejoice in the knowledge that South Australia has had so few industrial disturbances. The record speaks well for the employers and the employees and we want the present situation to continue.

I did not intend to enter into the argument that has been advanced by honorable senators opposite that the Playford Government has been returned to office successively as a result of gerrymandering of South Australian electorates. I remind my Labour friends opposite that they do not believe in the principle of one man. one vote. They never have believed in it and T suppose they never will. We know that the Leader of the Opposition in the South Australian Parliament proposed to redistribute the electorates of South Australia on a basis almost identical with that which has been adopted. We are told that the Australian Labour Party is the greatest democratic party in Australia.

Senator Scott:

– You do not believe that, do you?

Senator MATTNER:

– 1 did not say that 1 believed it. Let us see how this great democratic Australian Labour Party governs itself. I do not propose to say anything about the member of that party who said that he preferred the Communist Party to the Australian Democratic Labour Party. To its conferences the Australian Labour Party sends six delegates from each State, irrespective of the number of unionists in those States. Taking Australia as a whole, there are six electorates, as it were, and irrespective of the number of unionists in each electorate, the Labour Party sends six representatives of each electorate to its conference. Then it goes a step further. For its central executive - the governing body of the party; the boys who decide policy - it appoints two representatives from each State. That is fair enough, I suppose. I am not arguing one way or the other. All I am saying is that on these figures a unionist from New South Wales gets nothing like the benefit received by a unionist from South Australia. I think that should answer the rubbish that we heard about gerrymandering in South Australia.

I remind the Opposition that in the Senate elections in South Australia - with universal franchise and the one man one vote principle applying - on three occasions our candidates have been elected to fill three of the five vacant positions. That proves that South Australia is not wholly in favour of the Australian Labour Party.

Senator Drury:

– Each side has equal representation.

Senator MATTNER:

– I am not arguing about that. All that I am saying is that as far as the Senate elections are concerned, South Australia has elected three Government senators, and those three senators have recorded a majority of the votes.

I should like to deal with some factors that have led to an improvement in the financial stability of South Australia. I suppose that no State is less endowed with rivers than is South Australia. Much has been said about decentralization. South Australia has not been able to develop any towns without first providing adequate water supplies. The State Government, in its wisdom, has piped Murray water to many parts of South Australia, and will continue to do so. The building of houses has been mentioned. I think that the people of South Australia are better housed than those in any other State. This Government has subsidized homes for the aged; it has been prepared to make grants so that the less fortunate persons in Australia can be housed. Under that legislation, the Government provides £2 for every £1 contributed by an organization. It is interesting to know that since the legislation has been in operation, 1,361 beds have been provided for aged people in South Australia. That works out at one bed for every 36 pensioners. Comparisons are not always fair, but in New South Wales - a State which has had a Labour government for about twenty years - only one bed for every 96 pensioners has been provided. In Queensland the ratio is one to 71.

An honorable senator opposite quoted figures to show that South Australia spends 4s. lOd. per head on public health and that the average for Australia is 5s. 5d. The Grants Commission always told us to spend our money to the best advantage. It is not a question of how much money you spend; it is a question of what you ger for that money. South Australia’s record in the field of social services and care for our aged, is equal to, if not better than, those of other States. Education in South Australia was compared with education in New South Wales. It is true that South Australia spends less on education than does New South Wales, but the hallmark of statesmanship is to spend your money wisely and get the best results. When somebody says, “ We have spent so much in our State “, that leaves me cold. What is important is whether the money is spent wisely. The fact that this bill is before us now is evidence that South Australia has spent its money wisely. I am delighted that we have been able to welcome another State into the ranks of those States which do not have to seek financial aid from the Commonwealth Grants Commission.

There are many other things that 1 could talk about. Senator Laught referred to the establishment of an iron and steel works at Whyalla. The establishment of that plant will give a great boost to Australia generally. We are all good Australians, I hope. Each and every Australian should be glad that some part, if not every part, of Australia is going ahead. I should like to see every State prosper and go on from strength to strength. I am sure that it is a cause of great joy for every one in Australia to see the progress that South Australia has made, is making and will make. South Australia is no longer a mendicant” State, and I look forward to the day when Western Australia and Tasmania also will have no need to apply for special financial assistance.

Tn conclusion, I should like to express my appreciation of the tremendously important and painstaking work that the Commonwealth Grants Commission has done and is doing. It is a body which bears the hallmark of justice. I support the bill.

Senator HANNAFORD:
South Australia

– The subject of States grants usually comes up for discussion at Budget time, when we have a most interesting debate on the operations of the Commonwealth Grants Commission. The subject is under discussion now as the result of a decision made by the South Australian Government. At the Premiers’ Conference last year the Premier of South Australia stated that South Australia no longer wished to play the role of a mendicant State, that it was able to fend for itself, and that the grants which had been forthcoming for many years would no longer be needed. He made a qualification, as Senator Laught pointed out, by saying that there could arise a time of emergency when South Australia would need financial assistance. I think it was conceded that should that position arise, South Australia would have the opportunity of making a claim for special financial assistance.

We in South Australia are very proud that our State is now a non-mendicant State. We feel that we can hold our own with the people of the more powerful and populous eastern States. I believe that the unfavorable comparisons that have been made by Opposition speakers - not so much in this chamber as in another place - do not reflect the true situation. I agree with Senator Pearson that the amount of the grant for which the bill provides will be a godsend to South Australia. We all are aware that there is usually a time-lag in the making of such grants. The £1,027,000 for which the bill provides, will do much, as Senator Pearson stated, to overcome the difficulties and the losses that resulted from the recent drought. Railway revenues will be down considerably. As honorable senators probably know, the railways are the biggest instrumentality in South Australia, and revenue from the railways is of great importance. The fact that there is very little movement of grain and other primary products will be reflected in the financial affairs of our State. That is why I say that the proposed grant of £1.027,000 will be a financial godsend to us after a year of drought such as that which we have just experienced.

Senator Pearson stated that the South Australian Government has had to meet enormous expense in pumping water from the Murray River system and bringing it over the Mount Lofty Ranges. I do not think that many honorable senators will appreciate the full cost of that operation. Senator Pearson referred to an amount of £50,000 per week. If we multiply that sum by 52, we see that the annual cost is enormous.

Senator Vincent:

– How far is the water pumped?

Senator HANNAFORD:

– For 50 miles, over an elevation of some 1,500 feet. As was stated during the recent discussion of the report of the River Murray Commission in this chamber, it was a magnificent achievement to make water available in that way, an achievement which reflects great credit on the Engineer-in-Chief in South Australia and also on the Government Had that scheme not been in operation, we would have been in a tragic plight. The availability of the water, even though its provision has been costly, has enabled us to maintain our economy at the very high level that has been attained in recent years. Without that water, some of our industrial enterprises probably would have had to close. Not only our secondary industries, which have been increased considerably in recent years, but also our primary industries, would have been most adversely affected if the water had not been available.

I think it is well known - honorable senators from South Australia have attempted to make it well known from time to time in this chamber - that the water from the Murray River is vital to South Australia. We hope to reticulate it throughout the State, even as far north as Woomera, with a view to encouraging the decentralization of industry and the establishment of industries at such places as Whyalla and Port Pirie. The South Australian Government has shown a great deal of foresight during its long term of office. In the old days, South Australia was always regarded as a mendicant State, and I believe that a great many people thought that it always would be a mendicant. The natural resources of the State do not compare with those of the three eastern States, nor do they compare, in some respects, with those of Western Australia. In past years, South Australia had a very lopsided economy, but during nearly twenty years of Liberal government administration, under the leadership of Sir Thomas Playford, the State has made solid progress and has now reached the stage at which its citizens enjoy an average income that is one of the highest in Australia. I have been told, although I do not know whether the statement can be substantiated, that the people of South Australia pay more income tax per head than those of any other State.

It is futile for the Opposition to claim, as it claimed in another place, that the Commonwealth Government proposes to deprive South Australia of certain rights and advantages associated with grants recommended by the Commonwealth Grants Commission. I do not think that that claim is borne out by the facts. Taken by and large, the services that are provided for the citizens of South Australia compare more than favorably with those provided in other States. Senator Mattner referred to social service benefits, about which we have heard criticism, particularly in regard to hospital benefits. Senator Drury stated that in South Australia the amount paid per day for hospital treatment was higher than it is in other States. I point out that we run our hospitals on different lines from those on which some States run their hospitals. We do not resort to lotteries to finance the hospitals. We meet our hospital expenses without such a system. Proposals that lotteries should be used to finance South Australian hospitals have been rejected on many occasions. I think that the use of lotteries for that purpose is improper. Hospital treatment in South Australia may appear to be a little more expensive than it is in some other States, but at least we are not mulcting the people, who can least afford to pay, of the money that they spend on lottery tickets.

As Senator Mattner has said, the South Australian education system compares favourably with that of other States. Perhaps we do not spend quite as much money per head on education as some States spend, but I suggest that the important consideration is the way in which the money is spent. J would not be ashamed to take any honorable senator on a tour of inspection of education facilities in South Australia. In the Hon. Baden Pattinson, who is Minister for Education, we have an exeremely able man who is very much alive to the situation. I do not think that the people of South Australia are less educated than those of some of the so-called more enlightened States. In fact, I think that the South Australians could probably show those people a thing or two.

I understand that, in another place, the honorable member for Hindmarsh (Mr. Clyde Cameron) recently criticized the South Australian roads system. In my opinion. South Australian roads are very good indeed. The State Government has had assistance from the Commonwealth Government under the federal aid roads legislation, and the funds provided have been used economically in the establishment of a splendid roads system throughout the State. Millions of pounds have been spent to extend roadways, not only in metropolitan areas but also far out into country areas. We have a system of arterial roads which has enabled us to improve our economy. Without good roads, good transport facilities and water reticulation schemes we could never have reached the stage that we have now reached. We have been able to develop our State along the lines I have mentioned, to such effect that we no longer need aid from the Commonwealth Grants Commission. 1 think there can be no refutation of South Australia’s claim that great advances have been made by that State in recent years. The taxpayers of Australia should appreciate the fact that South Australia will not in the future, other than in exceptional circumstances, ask the Commonwealth Government for financial assistance in the form of grants, and that that will relieve the Commonwealth of a substantial financial obligation each year. For that reason, Sir. I think we should be grateful to the progressive Government of South Australia. We acknowledge the help that has been granted to us. Our economy now is such that we can carry on successfully without the aid of these grants.

We talk about decentralization. From time to time we hear the criticism that the State Government is not doing enough to foster industries in country areas. That suggestion can be refuted by citing the fact that we are developing and fostering a great industrial enterprise in the far north of South Australia. In the first place, we develop a high proportion of our power at Port Augusta, nearly 200 miles north of Adelaide. We have developed the Leigh Creek coalfield, which produces bituminous coal which is not of very high quality. As a result of effective work by our engineers, we have been able to establish a thermal power unit at Port Augusta and to put the greatest emphasis on power production not, as hitherto, in the Port Adelaide area but at Port Augusta.

Senator Vincent:

– What coal reserves has South Australia?

Senator HANNAFORD:

– They are very considerable. They were thought to be fairly limited but drilling has proved the existence of very great reserves. It is quite possible that further discoveries will be made in the Leigh Creek area. This is an opencut field. We have an efficient Commonwealth Railways system which brings the coal to Port Augusta, where we generate power on terms that compare more than favorably with those of some of the thermal power stations of New South Wales. We have a great power reticulation system extending through the State, linking with the metropolitan system, and placing us in a most favorable situation in regard to cost of production and manufacture. The result is that most ot our secondary industries are able to compete more than satisfactorily with industries in the eastern States. In fact, our industries are exporting successfully to the eastern, States, mainly by virtue of the fact that we are able to produce coal and power more economically than they can do so. In saying that, I do not detract from our work force. Perhaps our people work more effectively than do those in the eastern States. By and large we have been able to develop efficient secondary industries which are able to compete successfully with longer established industries in those States.

Senator Vincent:

– Is all of South Australia’s industrial power derived from Leigh Creek?

Senator HANNAFORD:

– No. Most of our power is now being produced in the far north, and the big Osborne power house in Port Adelaide plays only a secondary role, using coal that is brought from New South Wales. By using more coal from Leigh Creek at Port Augusta, we have doubled our power production there and further expansion is possible. We shall become more and more dependent upon our locally produced power resources. 1 do not want to occupy much more of the time of the Senate. I have said that I am highly satisfied that South Australia is no longer a mendicant State, requiring grants to help it meet its financial obligations. I want to refer also to homes for the aged, a subject that was mentioned by Senator Mattner. We have derived considerable benefits in the housing of aged people from this Government’s legislation, but it should not be forgotten that long before this Government legislated for a £2 for £1 subsidy for the provision of homes for the aged, the South Australian Government made contributions for this purpose. The Commonwealth Government may be thought to have pioneered this very valuable form of assistance to aged persons, but I assure the Senate that the South Australian Government was making grants for the provision of homes for the aged long before any Commonwealth legislation for the purpose was introduced.

Senator Lillico:

– Can you tell us something about some of the other States?

Senator HANNAFORD:

– I am not discussing what the other States do. I am talking about what South Australia does, and I am explaining that we have reached the stage of being able to carry or without going cap in hand1 to the Commonwealth Government, thereby incurring the derision of some of the eastern States. I feel I am justified in recounting South Australia’s position and in expressing the pride with which my colleagues and I regard the Government of South Australia. It has been able to surmount its difficulties and establish such a well-balanced economy that it does not now require the financial grants that it required in the past.

South Australia could further improve its economy. Senator Mattner was good enough to write a note reminding me that a standardized1 rail gauge would assist us greatly. I have been interested for many years in this matter. In fact, I happen to be a member of the Government Members’ Rail Standarization Committee. At present, we have a 5-ft. 3-in. gauge in South Australia, and all thinking people hope the time will come when we shall be effectively linked with the eastern States by a standard gauge railway from Adelaide to Port Pirie, and thence to Broken Hill. That would be connected with the system that crosses the continent to Kalgoorlie, and it would enable us to get our products, particularly our secondary products, more easily to the eastern States. We have had to use all sorts of transport methods to get those products to the greater markets in those States. I believe that we can look forward to a certain amount of assistance from the Commonwealth Government in providing that link. South Australia has an agreement with the Commonwealth Government, made in 1949, in regard to rail standardization. An obligation has been accepted, but so far we have not made a great deal of progress.

Senator Vincent:

– Does that agreement refer to the Adelaide-Broken Hill line or the Adelaide-Melbourne line?

Senator HANNAFORD:

– It covers all the South Australian lines. It is . a most comprehensive agreement, and it is a very favorable agreement from the point of view of South Australia. However, we are realists and we know that it would be impracticable at this stage to undertake the vast work of rail gauge standardization throughout our State. We have to recognize the fact that Victoria has been the stumbling block in this regard. To give Victoria its due, it has come into line to a certain extent. In doing so it may have adopted a selfish attitude, but in any case it could see the advantages of linking Albury with Melbourne by a standard gauge railway, and it has seized the opportunity to do so - and good luck to it. It knows just where the advantages lie and it has agreed to this work being carried out. At the same time, however, it has prevented the Commonwealth Government and the South Australian Government from carrying the 1949 agreement to fruition because it will not have a bar of the rail gauge standardization envisaged under that agreement, despite the fact that a great Victorian, Sir Harold Clapp, propounded a great scheme of rail gauge standardization some years ago.

We are chiefly concerned, however, with the line running from Adelaide to Port Pirie, linking that line with the Commonwealth Railways line, which of course is of standard gauge. We are very sincere m our request that the Commonwealth Government should give favorable consideration also to standardizing the gauge of the line from Port Pirie to Broken Hill, thereby connecting with the standard gauge lines of New South Wales. Our Chamber of Manufacturers has been plumping for this for years. It has come in behind the rail gauge committee on this matter, and I think the Stockowners Association of South Australia has also done so. In fact I believe the general feeling, both in Government and private circles, is that this is a must, as far as South Australia is concerned. I also believe that the Minister for Shipping and Transport (Mr. Opperman) has the matter in hand and will eventually provide the opportunity for us to have this work carried out. 1 do not want to say any more on this matter. I have appreciated the opportunity to make these few remarks. South Australia is my home State, and we all have a love for our own particular States. Thi? is a States’ house, and I would not criticize anybody for standing up in this chamber and speaking for his own State in. terms similar to those I have, used this afternoon.

South Australia has reached a stage of development at which we can all be proud of its achievements. This is the last grant to be made to it on the recommendation of the Commonwealth Grants Commission under the present procedure, andI feel certain the Senate will agree that South Australia has much to be proud of in having reached the position in which it can cease to be a claimant State.

Question resolved in the affirmative.

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

page 957

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL 1960

Second Reading

Debate resumed from 10th May (vide page 826), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I would suggest that this and the two cognate measures that follow it on the business paper, the Income Tax and Social Services Contribution Bill, 1960, and the Income Tax (International Agreements) Bill 1960, be debated together but voted upon separately.

The DEPUTY PRESIDENT. - There being no objection, that course will be followed.

Senator McKENNA:

– These three measures are in fact related. I can address myself to them with relative brevity for two main reasons; first, because we have no opposition to offer to them from this side of the Senate, and, secondly, because there has been circulated a very full explanatory memorandum prepared by the Commissioner of Taxation. 1 am forever in debt to the Taxation Branch for the manner in which taxation bills are presented in this place. They are precisely drafted, they are most meticulously and adequately explained, and the explanatory memorandums that accompany them give us opportunities to look behind their written words. We are told the reasons for what is being done in every clause, and this is a great help. I merely record the great appreciation of the Opposition at being assisted in this way.

These bills are made necessary because of two events, first, because of the introduction of taxation for the first time in Papua and New Guinea, as from 1st July, 1959, and, secondly, because under the taxation law operating hitherto New Guinea has not been regarded as part of Australia, although Papua has been so regarded. The various problems that arise from these two facts have given rise to the preparation of the three bills now before the Parliament.

In the explanatory memorandum the purpose of the legislation is well summed up in these words -

The present legislation is designed to give effect to three broad principles -

Residents of mainland Australia should not be called upon to pay a combined Australian tax and Territorial tax greater than the Australian tax that would be payable if there were no liabiliy for Territorial tax.

Territory residents should not be required to pay a greater measure of Australian tax than heretofore.

Discriminations in the Australian income tax law between the Territory of Papua and the Territory of New Guinea should be removed.

It is proposed that the alterations affected by these bills shall apply to the current year of income, so that they will operate simultaneously with the introduction of taxation in Papua and New Guinea. There is a complementary provision in the ordinance of the Territory designed to relieve territory residents who derive income from sources in Australia of the burden of double taxation.

Clauses 6 and 7 of the first bill provide that double taxation will be relieved by granting towards the Australian tax on income earned in the Territory a credit equal to the territorial tax levied, so that the taxpayer would not pay more in all than he would pay if the whole of his income were derived from sources in Australia. As I have said, a Territory resident in a comparable position will be given a credit towards the territorial tax of an amount equal to the amount of Australian tax paid. That is effected, not in the measures before us, but in territorial legislation.

The opportunity is taken to make New Guinea part of Australia for the purposes of our taxation laws. That alteration will, of course, affect overseas residents with income from Papua, who would be liable to pay both Australian and territorial tax on that income. Australia will now withdraw from that particular field.

There are quite a number of provisions affecting primary producers, notably the averaging provisions, the exemption of portion of the income of those engaged in mining certain metals or minerals and an exemption in favour of experts who visit Australia to assist governments or to assist in the development of our country for relatively limited periods. These and a number of miscellaneous amendments are detailed in the bills and are explained in the memorandum. They include an alteration to the secrecy provisions of the taxation acts, so that the Australian commissioner may supply information that he would otherwise not be free to give to the Collector of Taxes of the Territory of Papua and New Guinea.

The Opposition, having considered the three measures, voices no objection to them and, in fact, supports them. I take the opportunity to comment upon only two things, lt is obvious from the fact that taxation in New Guinea runs at only approximately one-half of the rates operating in Australia that it has been seen fit to give a concession of that kind acknowledging the disabilities that exist in respect of those areas by reason of distance, freight, remoteness, climatic difficulties and the rest. If that principle is true of those areas, it is equally true of many parts ot Australia. Disabilities are recognized in a minor way by the area concessions that are at present operative under the Income Tax and Social Services Contribution Act. Various zone allowances are granted in respect of particular areas, lt is quite obvious that there are many localities in Australia which should be developed and populated.

I merely suggest in the course of my comments on these bills that the Government might well consider a liberalization of allowances of that type in the national interest, in order to attract more people into north Queensland, the north-west of Western Australia, the remote parts of Tasmania and other areas.

Senator Kendall:

– There is not the sickness in Australia that there is in New Guinea.

Senator MCKENNA:

– The conditions are different. The people in New Guinea have to contend with malaria and various difficulties, but there are many areas in Australia where the residents encounter great difficulties and where they have the burden of freight from capital cities on all the goods they require. They are certainly in a worse position than the residents of the capital cities, where the great bulk of our population is concentrated. So I make a request to the Government to have a look at the zone allowances with a view to extending the principle that has been extended by these bills in favour of the taxpayers of Papua and New Guinea.

The only other thing to which I wish to advert is the development of Papua and New Guinea. It is quite certain that our administration of those two areas is now under the scrutiny of the world. It is equally certain from modern developments that we must speed the day when these people are advanced to a point where they will be able to govern themselves. That is the ultimate aim of Australian administration in these two Territories. The Dutch in New Guinea are proceeding far more rapidly than we are in the matter of according self-government to their people.

I recognize the difficulties in the areas where there are groups of people in very differing degrees of civilization, and one cannot move uniformly in respect of the whole area. But we in Australia, rated now as one of the sound financial economies of the world in the formation of the International Development Association give to the Territory the sum of £13,000,000 per annum and we do not as a Commonwealth draw any revenue of that order from it. So Australia is really subsidizing the development of those two areas.

On the question of whether we are doing enough, even financially - in these bills there are particular references to Papua and New Guinea - I suggest that the Government might consider what can be done to advance the provision of hospital facilities for the natives and, above all, their education. These are things that are preliminary to the attainment of any measures of self-government. They are basic things. The more the educational processes of the local residents - the native inhabitants - are improved and extended, the quicker will those areas move to self-government.

I content myself at this late stage, Mr. Deputy President, with saying that we do not oppose the three measures, and I commend to the Government for consideration the two matters I have raised.

Senator SCOTT:
Western Australia

– 1 shall not detain the Senate for very long, and 1 should like to say that I am pleased that the Leader of the Opposition (Senator McKenna) and his party are not opposing these bills. Having looked through the measures very carefully, I find that there are two items on which I wish to speak. One is the averaging system of income tax in Australia and the other the allowance of tax concessions for depreciation in the Northern Territory and Western Australia. I realize that most of the income tax legislation in Papua and New Guinea is based on the Australian legislation, with the exception that the New Guinea rates are approximately one-half of the Australian rates.

I think that it was an excellent idea for the Territory of Papua and New Guinea to introduce income tax to replace other forms of taxation. Formerly, most of the revenue of the Territory was derived from the imports tax and the exports tax. It has now been decided to abolish the exports tax and to reduce the imports tax. I think that the fairest means of taxing the community is by income tax. Under the exports tax that previously applied, persons who produced goods in Papua and New Guinea and exported them paid in tax almost £1,000,000 of the total amount of collections of a little over £5,000,000 a year prior to last year. Those people will be encouraged to undertake further development. I agree with the opinion expressed by Senator McKenna that every means must be taken to increase the productivity and the development of Papua and New Guinea.

Sir, the first proposal that I should like to see placed before the Legislative Council that administers the Territory is one to introduce the averaging system that is now in operation in Australia. The purpose of this system is to permit the averaging of income over a period of five years for income tax purposes. This legislation will be in force for only twelve months and I feel sure that as the years go by the averaging system will be of considerable benefit to people living in the Territory.

Another matter which I hope the administration in the Territory of Papua and New Guinea will examine closely is the concession that is allowed to residents of the Northern Territory by way of depreciation allowance on money spent for the purchase of plant and the erection of sheds, yards, troughing, watering points and fences. In the Northern Territory such expenditure may be claimed as a deduction in the year in which the money is spent instead of in instalments of 20 per cent, each year for five years. We must do everything possible to encourage an inflow of capital to the Territory of Papua and New Guinea. The adoption of a concession similar to the one I have just adverted to would encourage an inflow of capital to the Territory from overseas countries as well as from Australia. I do not agree with the Leader of the Opposition (Senator McKenna) who said that the Dutch are developing their territory much faster than Australia is developing hers.

Senator McKenna:

– I said that the Dutch were moving to self-government more quickly than we are.

Senator SCOTT:

– I am sorry, I misunderstood what the Leader of the Opposition said. We are eager to see the Territory of Papua and New Guinea achieve self-government at the first opportunity but, with 500 different tribes in the Territory, this will not be easy. The Government is moving as quickly as possible towards that objective.

I am pleased that the Opposition does not oppose this legislation and I congratulate the Government on bringing it down. I wholeheartedly support the measures.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

[5.37J. - in reply - Replying briefly to the remarks that have been passed in this debate. I think the answer to the two important matters raised by Senator Scott is to be fo”nd in the fact, referred to bv Senator McKenna, that the rates applicable in the

Territory of Papua and New Guinea are fixed at a level much lower than those that apply in Australia and that, overall, they take into account the particular difficulties to which Senator Scott referred, which are dealt with independently and in isolation in the tax law of Australia. As was said by Senator McKenna, the rates run at something like 50 per cent. of the Australian rates.

With regard to the zone allowance, which was referred to by Senator McKenna, that, asI am sure he will agree, has nothing to do with this measure.I can only say that the zone allowance and other matters of a similar nature come up for review from year to year. In any comparison of the situation in the Territory of Papua and New Guinea and our own zones we must take into account the fact that the Territory is on the very threshold of its development. I know very well that the same may be said of areas in Australia, taken in isolation but those areas have at least the advantages, which are not enjoyed by the Territory of Papua and New Guinea, of having the backing of the wealth that flows from the Australian community which has settled, generally speaking, along the coastline of this country.

I listened with interest to what the Leader of the Opposition said in respect of the advance Australia is making towards self-government by the native peoples in the Territory. That, in itself, is a subject of absorbing interest; but it is one in respect of which the Leader of the Opposition must concede there is room for more than one opinion. In recent days we have had examples of that. The special difficulties of particular areas are not always comparable, and although there may be some points of similarity between the Dutch section of the island and our own section, there are also vast differences indeed Having regard to all the factors, I think that we, as Australians, cannot be accused of resting on our oars at any time in the pursuit of self-government for the Territory. We can look with satisfaction at the progress that has been made there, especially since the war. Bringing native peoples - under-developed peoples - to a stage where they can accept self-government is an exercise that requires a delicate touch, and if I might introduce a musical metaphor this harp must be touched very lightly and very skilfully. I think our record is one at which we can look with satisfaction, always keeping in the back of our minds the continuing need for attaining the ultimate objective to which Senator McKenna referred.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator KENDALL:
Queensland

– Has any assessment been made of how much money will be obtained from the imposition of income tax in the Territory of Papua and New Guinea?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia. · LP

– The proceeds of the income tax are estimated to be about £1,300,000 but a contra must be set against that, as Senator Kendall well knows, which arises from the abandonment of export duties.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 960

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1960

Second Reading

Consideration resumed from 10th May (vide page 827), on motion by Senator Paltridge -

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 960

INCOME TAX (INTERNATIONAL AGREEMENTS) BILL 1960

Second Reading

Consideration resumed from 10th May (vide page 827), on motion by Senator Paltridge -

That the bill be now read a second time.

Question resolved in the affirmative.

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

Sitting suspended from 5.46 to 8 p.m.

page 961

ORDER OF BUSINESS

Motion (by Senator Spooner) agreed to -

That Order of the Day - General Business - be postponed until after the consideration of notices of motion.

page 961

QUESTION

SORELL POST OFFICE, TASMANIA

Senator WRIGHT:
Tasmania

– I move -

That all papers relating to the construction of the Post Office at Sorell, Tasmania, be laid on the table of the Senate.

I wish to exercise what I consider to be the important right of any member of the Parliament to examine the actions of the Administration in regard to a purely administrative matter. The perusal of an official file, together with any other relevant papers, is the best means of obtaining information that a member of the Parliament can have. The motion concerns a relatively small matter. The interest which I feel the Parliament may have in it is with respect to the cost of the building, the design of the building and the appropriateness of that design.

At this particular time, when wastefulness in Government expenditure is a very important issue, and when the supervision by the Parliament of administrative acts, particularly in the federal sphere, is of increasing importance, I would not expect this motion to be regarded by any one in this chamber as other than purely formal. However, when it was mentioned some weeks ago, the view was expressed that it should not be regarded as formal. I do not consider that I should have to take up the time of the Senate in elaborating the entitlement of an individual senator to have such a motion agreed to. I think that the file deserves scrutiny on the two grounds that I have mentioned - namely, cost and the appropriateness of the design. It rests with the Senate to say whether, by its vote, it will deny to a senator a perusal of this file, and deny to the public access to the information that the file would afford.

I have troubled the Senate with a brief statement on a matter that relates to a very important right of any individual senator only because this is a procedure that we have not used for a long time. But it is a procedure which is an essential and inherent right of the Parliament. In the consideration of any vote that may be necessary on the subject, I urge every member of the Senate to remind himself that this is a right that we hold as representatives of the people. We do not hold it for our individual sakes, but because collectively we constitute the Parliament. On behalf of the people, we demand the right to scrutinize administrative action by the perusal of public documents.

What I have said has no reference whatever to anything other than administrative documents, lt does not bring into question documents of Crown corporations or documents associated with privilege, confidence or security. I sincerely trust that the Senate will be vigilant enough to preserve this right on behalf of the people we represent and to give to me, by its vote, a right to have these papers tabled.

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

– I am sorry to say that I disagree with my colleague, Senator Wright. I am not only unwilling to support him in this motion, but I actively oppose the motion. 1 d’o not deny for one moment that the Senate has this right - it is set out in Standing Order No. 358 - but this is a procedure which has fallen into disuse. The last time on which the Senate agreed to a motion such as this was 30th June, 1943 - no less than seventeen years ago.

Despite the fact that the procedure has fallen into disuse, when I say that I am opposing the motion I want it to be clearly understood that there is no suggestion in what I say of any intention to move, or take any step, for the alteration of the existing standing order, or to alter the existing procedures of the Senate in any way at all. In truth, such a motion not having been moved for seventeen years, it is Senator Wright who is, in fact, proposing an alteration of Senate procedure.

That is the background1 to this motion. As to the merits of the case, there is no reason why the Sorell Post Office papers should be tabled. I think the construction of the post office was completed and the building handed over some six years ago. Material information1 about the cost was given to Senator Wright, in an answer to a question on notice, on 29th September 1954. He was told the cost of the construction of the post office and the cost ot the equipment. A question was put on notice by Senator Wright regarding the cost of the construction and equipment of the Sorell Post Office. The answer that was given was to the effect that the construction cost about £19,000 and the equipment cost £1,050. The sum of £19,000 was made up of £10,315 for the purchase of the components and storage, and £8,739 for the erection of the building.

The view that I put is this: It will be time enough for the Senate to consider whether it should agree to a motion such as this, and whether this disused procedure under the Standing Orders should be revived, when circumstances arise in which there is justification for the step that is involved.

I do not think there is need for me to go over the grounds that may be covered in a review of the Standing Orders.

It may be of interest to honorable senators to know that in the early days of the Senate the procedure for which the standing order provides was used. A great many orders were made under it. History indicates that back in the early days the then leaders of the Senate used the procedure to decide whether or not there was in the Senate a sufficient volume of opinion in support of the provision of the information that was requested. The early records show that the returns made under the standing order were quite frequently statistical returns which required the preparation of a great deal of information, including facts and figures, and entailed a good deal of work for the departments concerned. I think that the procedure, when it was used, was in order, although the view was quite frequently held that the information was requested for particular senators in circumstances which did not justify all the work involved in answering the inquiries.

As I understand it, the Senate in those days said, “ Well, a good test is to see whether a majority of the Senate desires that the information should be prepared “. But whatever happened then happened in the past. Time has moved on. The system of obtaining information by question and answer, and by questions on notice has, to quite a material extent, changed the situation. Honorable senators can obtain the information that they want by means of questions and answers. The ramifications of government have increased to such an extent, and so too has the volume of relations between Ministers and officials, that there would be considerable difficulty and embarrassment in returning to the old procedure and, as a result, disclosing not only for the information of the Senate but publicly, for the newspapers and for all who may care to read, advice that from time to time is tendered to a Minister and either rejected or accepted by him, in the ebb and flow of the conduct of government.

I wish to quote passages from Mr. Odgers’s book, “ Australian Senate Practice “, which I think are appropriate to this matter. At page 234, there is a reference to an important announcement in the House of Lords which I think expresses much better thanI could hope to do, this matter of confidence and the relation between the machinery of government, Ministers and the Parliament. The passage is as follows: -

The Lord Chancellor said that the law enabled privilege to be claimed by the Crown on alternative grounds, namely -

when the production of the contents of the particular document would injure the public interest; and

when, although there might be nothingin the contents of the particular document the production of which would injure the public interest, the document fell into a class which the public interest required to be withheld from production.

The latter grounds he called “ class grounds “ end the reasons for claiming privilege in these cases were given in the following instructive extracts: - “ The reason why the law sanctions the claiming of Crown privilege on the ‘ class ‘ ground is the need to secure freedom and candour of communication with and within the public service, so that Government decisions can be taken on the best advice and with the fullest information. In order to secure this it is necessary that the class of documents to which privilege applies should be clearly settled, so that the person giving advice or information should know that he is doing so in confidence. Any system whereby a document falling within the class might, as a result of a later decision, be required to be produced in evidence, would destroy that confidence and undermine the whole basis of ‘ class ‘ privilege, because there would be no certainty at the time of writing that the document would not be disclosed. “

I come now to the category of departmental and inter-departmental minutes and memoranda containing advice and comment, and recording decisions - the documents by which the administrative machine thinks and works. Here we consider that Crown privilege must be maintained.”

I interpose the view that in the machinery of government there is no other class of document than that referred to by the Lord Chancellor. Departmental files are just the type of document to which he was referring. The quotation continues - “ An important type of case in which documents of this kind may be relevant is where the vires or legality of a Minister’s decision is challenged and the plaintiff may seek to show that the Minister proceeded on wrong principles. In such a case, it is right that a Minister should be prepared to defend his decision, but if it became possible to challenge Government action, by reference to the opinions expressed by individual civil servants in the necessary process of discussion and advice prior to decision, the efficiency of Government administration would be gravely prejudiced. “

That statement, I think, sets out and illustrates the importance of the decision that we face.

I do not know the exact words that Senator Wright used, but he left the impression that this was a formal motion seeking the resurrection of an old right, to which there could be no objection. On the opposite side, I have cited statements of the Lord Chancellor to indicate the importance of what is involved. I make it clear that there is a standing order that affords protection in this situation. There is no suggestion that that standing order should be altered. The right is available in circumstances which justify its use. If there were a matter of major public importance or a set of circumstances in which there was wrong-doing or something of that kind involved, the Senate could agree to (he passing of an appropriate resolution. Senator Wright suggests that we resurrect this old practice, and I say to him that we live in a changing world. A lot has happened during the seventeen years since the right was last exercised. This is a procedure on which we should not lightly embark. To-day a case for which it is sought to secure the support of the Senate must contain grave elements indeed. The motion is by no means a formality, and that is why I am opposing it.

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP

– Is there not some other reason why you do not want to disclose the documents?

Senator SPOONER:

– No. So far as I am aware, the history of the Sorell Post Office indicates that its estimated cost was far less than the actual cost. The impor tant thing is not so much the question whether the documents should be tabled, as the principle that is involved. What we are saying, in effect, is that the standing order is there. The standing order remains there. It has, in modem parliamentary practice, fallen into disuse, but we are not proposing to alter it.

Senator O’Flaherty:

– That is only saying, in effect, “ We have the numbers andwe are not going to agree “.

Senator SPOONER:

– The standing order is there for protection, if the circumstances justify its use. No good reason has been advanced for the tabling in the Senate of the papers relating to this particular matter. Because of that, 1 oppose the motion.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I knew nothing of this matter until I heard Senator Wright this evening, followed as he was bythe Leader of the Government in the Senate (Senator Spooner). I recognize that an important matter of principle is involved in what seems to be a simple issue. Quite frankly, 1 was surprised that there should be any opposition to a request from any honorable senator to see the papers pertaining to a matter that is, in a context of the whole Commonwealth, relatively so unimportant as the erection of a post office in a non-metropolitan district in Tasmania. The post office is some fourteen or fifteen miles from Hobart, near the aerodrome. I should have thought that the Government would have been most anxious, in a simple matter such as the construction of a post office, to make the papers available immediately to any honorable senator. I conclude - I may be wrong in this - that Senator Wright made an approach and asked for a perusal of the file, that that was refused, and that he then took the next and logical step of initiating this motion.

Senator Gorton:

– You should have asked him if that was so.

Senator McKENNA:

– I do not know whether it is. I am making that assumption.

Senator Wright:

– The position is that Senator Wright abstained from perusing the file in confidence and that he wishes to have the papers tabled in the Senate.

Senator McKENNA:

– When making the assumption, I fully understood that the honorable senator would not ask to be allowed to peruse the file on a confidential basis. I thought he would make a request to be allowed to see it and to utilize whatever information he obtained. I assert the right of any senator to move in a matter of this type, first as a matter of duty, when he feels there is something to be explored, and secondly, as a matter of right. A right to so move is conferred by the Standing Orders.

Senator Spooner:

– And to establish a case, surely.

Senator McKENNA:

– A right to so move. Senator Wright indicated that he was concerned about two matters only, namely, the economy of construction, and the design of the post office and its appropriateness in all the circumstances. They are not matters of moment to a government. What element of secrecy could there be ir, then”? In the view that T take, nobody could be adversely affected by allowing papers of that type to be tabled. On the face of it, there does not seem to me to be any real reason why they should not be tabled.

The first reason that the Leader of the Government gave for declining to table the papers was that Standing Order No. 358, on which Senator Wright relies, had been in disuse for seventeen years. I can point immediately to many other provisions of the Standing Orders that have been in disuse for an even longer period. There is, for instance, a procedure known as “ The previous question “, when a question is put in this form: “ That this question be not now put “. In my sixteen or seventeen years in this place, T have never known that motion to be moved. I do not say that it has not been moved, but I do not recall its having been moved. I have little doubt that if I had time to peruse the Standing Orders I should find many examples of that kind. I venture to say that the Leader of the Government was wrongly informed when he was told that this standing order had not been invoked in the past seventeen years. I recall that, following the double dissolution of 1951, I moved to have the papers relating to that double dissolution tabled in this chamber.

Senator Spooner:

– But the motion was not approved.

Senator McKENNA:

– No, but the point the Minister made was that the procedure had not been invoked.

Senator Spooner:

– I did not say that. 1 think I referred to the last time such a motion was adopted. In any event, that is what I meant.

Senator McKENNA:

– I understood the Minister to say that that standing order had been unused.

Senator Spooner:

– I said that the last time the Senate had agreed to such a motion was on 30th June, 1943.

Senator McKENNA:

– The Senate certainly did not agree to my motion, although the papers were subsequently made available, and I have little doubt that the pressure that was exerted through that motion was to an extent responsible for the fact that the papers were in due course tabled. That the procedure is not frequently used is, I think, due to the fact that applications of this type by honorable senators are not, in fact, refused in these circumstances.

Senator Henty:

– How far back would you go?

Senator McKENNA:

– In asking that papers be tabled?

Senator Henty:

– What age would the papers have to be?

Senator McKENNA:

– None is laid down in the standing order. It would depend on the circumstances. I would not impose any limit. I think Senator Wright has behaved reasonably and responsibly in moving the motion. No element of secrecy or need for secrecy in connexion with these papers was asserted by the Leader of the Government. He based his argument entirely on a series of principles expressed by the Lord Chancellor in such very wide terms that they would not enable any document to be tabled. How could there be any type of document, particularly one connected with a project of this kind, that did not in some way or other reveal the workings of the administrative mind? 1 do not imagine that things develop without a mind working and without a mind committing its thoughts to paper. The type of principle that is affirmed in the authority from which Senator Spooner quoted is so wide that it would, in my view, prevent any document from being tabled, if a government saw fit to rely upon it.

I think a matter of principle is involved. 1 think that at this short notice the matter is not likely to be adequately debated. I do not want to take control of the matter out of Senator Wright’s hands, but I should like an opportunity to canvass it further on another occasion.

Senator Wright:

– I invite you to ask for leave to continue your remarks at a later stage.

Senator McKENNA:

– With Senator Wright’s concurrence, I shall certainly do that. That is what I had in mind, if the honorable senator agreed. I ask for leave of the Senate to continue my remarks at a later stage.

Senator Spooner:

– No.

Leave not granted.

Senator McKENNA:

– I now seem to be in a position similar to that of Senator Wright, in thatI have been met with the same emphatic “ No “ that was handed out to him - although I, perhaps, have been given that answer in regard to a more important matter. In my case the point at issue goes to the question of an opportunity to consider the proper principle in the matter.

Senator HENTY:
TASMANIA · LP

– Some files would be interesting, wouldn’t they?

Senator McKENNA:

– Very. I can imagine circumstances in which a government would decline, for very good reasons, to table papers. But Senator Spooner alleges no reason connected with the merits of tabling the papers; he alleges the genera] principle, as I understand him. Had some argument been adduced on the merits of tabling the papers I might have adopted a different attitude. But as the position stands 1 do not know the particular point at issue which Senator Wright has in mind, and the Government does not contend that there is any reason, other than one of abstract principle, for not disclosing the papers. In those circumstances my curiosity is stimulated, and, in addition, I contend for the right of the honorable senator, in the circumstances that are before the Senate, to be allowed to peruse the papers after they have been tabled in this place.

Senator WADE:
Victoria

.- On the case presented by Senator Wright I have no alternative but to oppose the motion. At the outset let me say that my opposition to the motion is not to be construed as a criticism of Standing Order No. 358, which says, in part -

Accounts and Papers may be ordered to be laid upon the Table.

I believe that that standing order embodies a principle of democratic government designed to safeguard the rights of elected members of the Senate, but I say also that that standing order confers great privileges on such members, and great privileges always bring in their train great responsibilities. When an honorable senator invokes Standing Order No. 358 he must approach his responsibilities with great caution, for several reasons. The first is that when a paper is laid on the table it becomes a public document. Standing Order No. 362 says, in part -

All Papers and Documents laid upon the Table of the Senate shall be considered public.

That is the first reason why we must consider carefully before invoking Standing Order No. 358. I suggest that those who, in their great wisdom, formulated the Standing Orders realized that some restrictions had to be placed upon the requirement for the presentation of papers. Again 1 direct the attention of the Senate to Standing Order No. 364 which says -

A Document quoted from by a Senator not a Minister of the Crown may be ordered by the Senate to be laid upon the Table.

That standing order makes it abundantly clear that while those who drew up the Standing Orders considered it reasonable for a senator to be compelled to table a document from which he quoted, they also believed that a Minister should not be placed under such a compulsion. I suggest that a Minister, when examining his position on an issue such as this, must consider whether the presentation of the document, the file or the paper is in the public interest. When a responsible Minister is obliged to make a decision I believe he is not only entitled but also duty bound, for the purpose of arriving at the best decision, to seek information from all those capable of giving it to him. Is it right and proper that the advice tendered by such people should be subsequently laid on the table of the Senate?

When we discuss Standing Order No. 358 we must also consider the rights and privileges of the people outside this chamber who have no medium through which they may speak.I suggest that those who drew up the Standing Orders gave attention to these principles, and that they then set about providing alternative methods which could easily meet a senator’s needs. The first and most commonly used of those methods, of course, is that which is available at question-time. Nobody could suggest for one moment that question-time is ever restricted in this Senate. The only requirements connected with the asking of questions are those of decency and courtesy - and that is as it should be.

But, Sir, if a senator is not satisfied with the reply given by a Minister at questiontime, he then may use other methods provided by the Standing Orders. He may move the adjournment of the Senate to debate a matter of urgency, and the Standing Orders provide for a minimum number of senators to support his proposition. That is another form at his disposal.

Senator Laught:

– But he cannot get documents.

Senator WADE:

– Senator Laught says that he cannot get documents by that method. What does he want, documents or information? I suggest that these methods are designed for the obtaining of information. A senator may also speak on the motion for the adjournment of the Senate, and we have seen honorable senators rise in their places time after time and speak on the same issue, seeking information. A senator may also give notice of a motion to consider a certain matter. That is another right that he has.

Senator Sandford:

– Seeing is believing!

Senator WADE:

– I can give the honorable senator information but I cannot give him understanding. If he will listen to me I will give him information.

Machinery is also provided for a senator to have a matter referred to the Public Accounts Committee, provided it relates to public expenditure, and who in the length and breadth of this land has any criticism of that committee? It is a committee comprised of members and senators from all parties. I have for some time had the privilege ofsitting on that committee, and never on any occasion have I seen any member of it seek to exploit the interests of the Opposition or of the Govern ment. It is a completely impartial committee that is rendering this Parliament great service.

Finally, if a senator is in search of information to right what he considers a wrong, he may speak on the motion for the first reading of a money bill. Standing Order No. 190 gives him this right, whether the matter is relevant or not relevant. I suggest that there is a very wide field of alternative methods available to a senator who seeks information.

Then, Sir, this Parliament has available to it the services of an Auditor-General, who is, in actual fact, an officer of the Parliament and not of the Government. He has very wide powers and a powerful organization behind him. Section 42(1.) of the Audit Act gives some indication of his wide powers -

The Auditor-General shall make such queries and observations addressed to the Treasurer or any other person whomsoever and call for such accounts vouchers statements documents and explanations as he may think necessary.

I suggest that if a senator has failed to obtain the information sought by means of a question to a Minister, and if he has failed to gain the ear of the Parliament in submitting cases to it, then the AuditorGeneral may well be the appropriate person to whom to submit his case. The AuditorGeneral in his turn has a responsibility, if the circumstances warrant it, to report to the Parliament. So, Sir. we come to the matter of the Sorell Post Office. In fairness to Senator Wright, I am not making any attempt to take the matter out of its context. Suffice for me to say this: In 1951, a requisition for the prefabricated building at a cost of £8,325 was lodged. The post office was opened in 1954. The cost of the prefabricated building itself was £10,315. For a project extending over a period of three years, Mr. Deputy President, I suggest there is not a great deal of cause for criticism of the extra cost of the building. The erection of the building in 1953 brought forth the requisition of £6,900. The building was opened in 1954, the actual cost being £8,739. But the significant fact is that tenders were called for the supply of the building and for the work that was to be done.

Senator Wright:

– What is the basis of your information?

Senator WADE:

– It is taken from a summarized statement that was issued by the Postmaster-General and which is available to you or to anybody else who cares to see it.

Senator Wright:

– When did he issue it?

Senator WADE:

– Sir, I have told you where you can find all the information. I have stated categorically that those who drew up the Standing Orders realized that there had to be reservations and restrictions in respect of the production of files of papers. I have stated that the rights of people outside this place must be protected as well as those of us who are within it. I say finally, Sir, that if members of the Parliament choose what I term this easy method of seeking information, and if they pursue this policy to its logical conclusion, they could completely tie up the workings of this Parliament and lose the substance while they chase the shadows. Therefore, I believe that Standing Order No. 358, on which this supposition stands, is a fundamental principle of democratic government, lt must remain but it must be used with great caution and in a most responsible manner if the parliamentary institution is to be a workable body.

Senator WOOD:
Queensland

.- I have come into this debate because of some of the things that 1 have heard this evening. The inference I drew from the remarks of my own leader, the Minister for National Development (Senator Spooner), was that the non-use of this standing order indicated that it had to some degree lost its value. I do not take that view, because the Standing Orders are available to be used when required and they serve their purpose when the opportunity for them to be used crops up. So, from that point of view, 1 do not concede my leader’s proposition. 1 think a lot of feeling is being generated unnecessarily on this matter. If one looks at it in a calm, cool manner he concludes that we may be imagining all sorts of things. My colleague, Senator Wade, who is usually very logical, told a story to the effect that the workings of this Parliament could be jammed by the usage of this standing order. I think we have to recognize that we who come here as senators from the various States must be accepted as men and women who possess common sense and have a reasonable outlook. 1 do not think that this chamber would be guilty continually of calling for papers in order to clog the workings of the Parliament. With the quoting of the Standing Orders and of passages from Mr. Odgers’ book on the Senate practice, we have got ourselves unnecessarily into a little bit of a state on this matter.

My colleague, Senator Wade, referred to the democratic principles on which this Parliament is founded. I take the very simple view with regard to democracy that we, as parliamentarians, are here to look after and to safeguard the interests not only of the Parliament, but primarily those of the people. I am not suggesting that anybody has denied that, but I think it needs to be re-stated because the arguments that have been used do not bring out that point clearly.

When I say that the interests of the people are paramount, I recognize that the use of a standing order like this is a privilege of this Senate which should be exercised judiciously. The right to use it should be guarded jealously because, from a democratic point of view, this chamber should always see that its rights are safeguarded for the Parliament itself and for the people.

I know there are probably reasons why Ministers do not want their complete files to be put on the table of this Senate. I think that Senator Wright stated that he did not want privileged statements, and so on. I quite understand that there are things that pass between Ministers and their staffs which probably it would not be right to reveal, because they are not factual in many instances; only opinions are expressed.

My own feeling with regard to the tabling of papers such as this document on the Sorell Post Office is that they should be papers of a factual nature. That is important, because therein lies the duty of this Senate to safeguard the interests of the people. I want to make it perfectly clear that I want no aspersions to be cast on the Ministers of this Government, particularly the Ministers in the Senate where we are debating this matter, because I believe that every one of those Ministers is a man of the highest integrity. There can be no suggestion to the contrary. I want that very clearly set in the minds of the people. But even in one’s own party, or one’s government, it is possible with the passage of time that you can have a Minister who may be guilty of misuse of his position. He may be guilty of weakness of administration and he may be guilty in his department of maladministration. Because of those things, it is right that the Senate should have the opportunity to have papers laid on the table. Irrespective of whether the Minister is in your party or in an opposing party, I believe that the rights of the people are paramount, and it is only right that if any honorable senator has an honest feeling on these matters he should have the right, under that standing order, to move for the tabling of the papers.

Senator Scott:

– What would you do with the papers in the file which were not factual?

Senator WOOD:

– I think the papers that are not factual have no relation to the actual case. Take the Sorell Post Office; 1 do not even know where Sorell is.

Senator Scott:

– It is twenty miles from Hobart.

Senator WOOD:

– lt could be a case of where a building was erected and the estimates and actual costs were so far out that it could be considered very wrong from the people’s viewpoint that some other methods were not used in order to see that that situation did not arise.

Senator Henty:

– The responsible Minister is dead, is he not?

Senator WOOD:

– I do not know whether the Minister is dead or even who was the Minister.

Senator Mattner:

– Would not the Senate itself have the right to decide whether these papers should be tabled?

Senator WOOD:

– Senator Wright has raised this matter. He has put his case before the Senate. He feels that something is wrong. My attitude in public life has been that if anybody thinks that something is wrong when in fact nothing is wrong, the papers should be tabled and the matter thus be cleared up in two minutes.

I always stand by the rights of honorable senators in this Senate. I believe that the papers should be tabled if an honor able senator so wishes. If an honorable senator earnestly believes that he is doing right and carrying out his duty by asking for the tabling of documents or files, then the Senate should give favorable consideration to his request.

Senator VINCENT:
Western Australia

– Senator McKenna suggested that, because of their importance, the papers might be tabled, irrespective of the other merits of his argument. In my opinion whether the papers are important or unimportant is not material to this issue. What is involved is the principle of tabling papers. That is far more important than the papers themselves or what they may reveal. The argument that because the papers are important they should be tabled does not cut very much ice with me. We should always come back to the principles that govern this matter of tabling papers in the Senate.

I emphasize that those principles are freely determined and ascertained. There is no doubt surrounding the principles governing the manner of tabling papers in this Senate. I was somewhat surprised when Senator McKenna asked for further time to consider this matter because in point of fact there is not a great deal to consider. Some arguments have been adduced to-night which I suggest are not relevant to this discussion. I do not think there is any significance in the fact that recourse has not been had to the tabling of papers for a number of years. That is not material because the same rights exist to-day with regard to the tabling of papers at the request of an honorable senator as existed five or even 25 years ago. The practice has not changed in that time. Therefore I suggest that the time factor is not important and is not relevant to this discussion.

I do not attach any importance to the suggestion that Senator Wright could have had a confidential examination of these papers, as he mentioned by way of interjection. That is not concerned with the practice of making the papers public. I think Senator Wright will agree with me that he would not be able to use the information obtained in a confidential examination of papers and that such an examination would not be making the papers public, which is his objective.

The practice is quite clear. Of course, there are certain exceptions to that practice. The standing order is quite clear and states that a senator may call for the tabling of papers. But certain practice is associated with that standing order. I wish to refer to the first element of that practice. It was referred to in part by Senator Spooner and Senator Wright. I emphasize that no honorable senator has an absolute right to call for the tabling of papers. I suggest to Senator Wright that he has not even a prima facie right to call for papers. Let us get rid of the first condition relating to the tabling of papers. There are certain exceptions which preclude a senator from obtaining the production of papers. Those exceptions are clearly set out in May’s “ Parliamentary Practice “. I think Senator Wright will agree with me that if the papersrelate to security matters of a confidential nature, or if their production is against public policy, he does not have a right to have them tabled. Those exceptions, of course, do not enter into the present argument. But there is a third very important exception, which was outlined by the Lord Chancellor in 1956 and referred to and quoted by Senator Spooner. I will not canvass that exception but, if it is applied to this matter, Senator Wright is skating on very thin ice. In my opinion the present case falls within the category of the case dealt with by the Lord Chancellor. But that is not the whole picture. Even excluding those exceptions to which 1 have referred, there is still a further condition appertaining to the right of a senator to call for the production of papers - to make them public property, as it were - and that is that quite apart from the exceptions, a senator does not have an absolute right to call for papers.

With all due respect to Senator Wright, I suggest that he has not fulfilled a very important condition. May’s “ Parliamentary Practice “, 16th Edition, deals with the exceptions to which I have referred and upsets Senator Wood’s argument which, as I understood it, was that if a senator believes that papers should be tabled, they should be tabled. We must go further than that. The authority to which I have referred states at page 273 -

However ample the power of each House to enforce the production of papers may be -

And no one questions that proposition at all- a sufficient cause must be shown for the exercise of that power.

So there is no prima facie right for the production of papers, as was suggested by Senator Wright. The onus is on Senator Wright to show cause and, with great respect, I submit that that cause has not been shown to-night. There has not even been a suggestion that anything is wrong with the Sorell Post Office or with public administration connected with that post office. Until and unless that cause is shown. Senator Wright’s case is rather thin. In fact, I do not think he has a case at all, because a pre-requisite to the right of a senator to call for papers is that he must show a cause. Another obstacle to be overcome -is the exception referred to by the Lord Chancellor. That is a very difficult obstacle to surmount.

With great respect to Senator Wright, ] think that the importance or unimportance of the document that has been requested is not germane. I think the principle is important and, with the greatest respect to my learned friend, I believe that this is an attempt by him to read into the practice of the Senate something that cannot be read into it. As I understand the position. Senator Wright is claiming a qualified right to have these papers produced by request. 1 do not think that he has that right. He must first show cause and, having shown cause, it is perfectly proper for the Minister to say that the papers come within one of the recognized exceptions to production and that he therefore objects to their production. I do not think this is a difficult case to discuss. On the contrary, it is a simple one. First, has cause been shown by Senator Wright? I suggest that it has not because he did not say so and, as a matter of fact, nobody has said so. The only suggestions about the efficacy of this construction have been given by my friend Senator Wade. There has been no suggestion, even by implication, that there is anything wrong or that any cause exists why the papers should be produced to this Senate.

Therefore, I again suggest that the onus is on my friend Senator Wright to show cause. When the honorable senator has shown cause, the Minister can make a decision as to whether the papers come within one of the exceptions or not. Otherwise, let us consider the consequences. What is going to happen? Any one, without showing cause, could call for any paper at all. That circumstance, 1 think, could lead to utter confusion in this Senate, and, of course, it would not be in accordance with the standing order as it exists at present.

If Senator Wright wishes the papers to be tabled as a right merely by making out a prima facie case, as he called it, then 1 suggest that the standing order should be amended. Until it is amended, I think the Senate should say, in effect, 40 Senator Wright that he has not shown cause. For these reasons, 1 oppose Senator Wright’s motion.

Senator WRIGHT (Tasmania) [9.2J.- in reply - The observations which have fallen from Senator Vincent are much more healthy than those which came from his leader, the Minister for National Development (Senator Spooner). Senator Vincent has treated the matter on a basis which does credit to the Senate, inasmuch as he said that the question of principle should govern the matter. He said that it is not a matter whether this particular file is important or unimportant. He scotched the idea that the lapse of time has any relevance whatever. That was something that, gave me some encouragement, coming as it did even from Senator Vincent. He does not countenance the view which Senator Spooner expressed.

Senator Spooner said that an important principle is involved. He said that in modern parliamentary practice this procedure of tabling documents has fallen into disuse. He said that the practice, if followed, would encumber the work of Parliament and he suggested that disuse of the practice to date should lead to its continued disuse. Senator Spooner talked about the resurrection of an old practice and had the temerity, from his parliamentary experience, to offer the suggestion that questions on notice have superseded the practice of tabling documents. Dear, oh dear! One certainly should stand in this place and say how fatuous is such a submission. Questions were placed on notice long before the practice, as it has been said, fell into disuse. A lapse of seventeen years in the life of the parliament during which the procedure was not used is urged as a reason for its continued disuse. It is said that only the uninitiated claim that the practice should be revived. Because of this I find considerable comfort in the opinion that Senator Vincent has expressed. As to his expression of principle 1 would be concerned to controvert but little of it.

I hope that this Senate will not go through the convolutions of thought in which Senator Wade engaged. I listened with patience to his recital of other procedures that could be taken, but anybody who has had any experience of searching for facts, particularly in public administration, knows that the best facts upon which to base a decision - whether the judgment be adverse or favorable - is the contemporaneous document and record. That is the fairest and the soundest basis. If I were on the Public Accounts Committee I might abstain from the superlative statements about the service that the members of the committee render to the community and to the Parliament. But even if I held that opinion of my colleagues and myself, I would defer to the right of a colleague, if he wished to see a file and not trust to the committee alone. Matters of judgment are involved in this procedure. Experience is important in the making of judgments, and whereas criticism may be premature of the work of the committee, evidence of immaturity still may be one of the features of some of the products of the committee. I learnt very little from the immature statement of this principle in the speech of Senator Wade. 1 think I have scotched completely the unworthy suggestion that came at the commencement of the opposition to the motion, namely, that this practice has fallen into disuse. Senator Spooner said that I have proposed an alteration in Senate procedures. He said that time has moved on and the practice of question and answer is so effective that it has displaced the need for a motion to obtain the tabling of papers. Harken to this! Senator Spooner is proclaiming the divine right of public service administrators or the complete reliance of Ministers upon public servants. The relationship of government officials to modern government is now such that the Minister says that the procedure of tabling papers is inappropriate. Does it not betoken how little we are aware of the extent to which government has become the prerogative of the public servant? If we are worthy of the authority and responsibility - to use the term mentioned by Senator Wade - which our election to this place connotes, not in our own interests but in the interests of thi people who sent us to meet here - an individual house of parliament - we have a right, and therefore a duty, to secure the tabling of papers for our information and for public information. We have the right to do this through the recognized channels, and it is the very breath of fresh air that is thrown upon the file that is a proper reminder to the public servant from day to day that he acts only as a servant of the public and not as a confidant to a Minister. He is a servant of the public and he renders this service by serving a Minister who is a Minister of this Parliament and responsible to it and through it to the people. The only question is whether, in the judgment of the Senate, sufficient cause is shown for the exercise of this power. Had the matter not been smothered by a series of suggestions by the Leader of the Government in the Senate, that the procedure should never have been resurrected, we would be much further ahead. The question now is only whether or not sufficient cause has been shown.

Senator Wade has told us that he has been given certain information by the PostmasterGeneral. I myself, not on this occasion but on other occasions, have never accepted summarized information. If we wish to discharge our duties fully, we are obliged, in fairness to all persons concerned in the administration, to go to the primary record. If that is done, it is more likely that a sound and fair judgment will be made. If I were to say to my colleagues that there was an item of administration in respect of which £100,000 had been literally wasted through maladministration, and they asked me to make out a case before presentation of the file, those who did so would have little regard for the public interest. I suggest that in this instance it would be much better if an inquiry could properly be based on the grounds of cost and design. The Government should table the papers and let us see whether they support the idea that there is room for criticism

It should not precede the disclosure of the file by expressing ideas that are secondhand.

I appeal to my colleagues, at this late stage, to recognize, on Senator Vincent’s statement, that this right that we have should be jealously guarded. It is not a question of the procedure having fallen into disuse, or resurrecting an old procedure, or of introducing in the Senate a procedure that is inappropriate to the modern circumstances of government. It is not a question of encumbering the Senate with a whole multiplicity of papers. Seventeen years have passed, and I believe that is the first motion, with the exception of that referred to by Senator McKenna, to be made for the purpose of ensuring a more vigilant supervision by the Senate of such matters, a motion that is designed to induce a greater sense of economy in public administration.

Statements made by the Lord Chancellor, reported in Appeal Cases, have been quoted, and there has been talk of privilege, but there was no acknowledgement that the disclosure of documents was sustained, in a public law court, on an issue as between litigants. Those circumstances were translated, without one word of qualification, to the parliamentary forum.

Senator Vincent:

– They were translated by the Solicitor-General. I beg to differ from the honorable senator there.

Senator WRIGHT:

– We are indebted to Mr. Odgers for having placed on record what the Solicitor-General said. He has quoted a statement of the Lord Chancellor, in connexion with the examination of a witness before a committee of this Senate. It is quite wrong to suggest that there is an analogy between a committee of the Parliament and a court of law. Those who are content to give these matters five years’ consideration instead of half a lifetime of study will find it reasonable to think that that may be done.

Senator Wade:

– Immaturity!

Senator WRIGHT:

– Yes, immaturity.

Senator Vincent:

– I am not criticizing what the Lord Chancellor said, or the circumstances in which he said it.

Senator Henty:

– The Lord Chancellor would be a bit immature, too, would he not?

Senator WRIGHT:

– What a fatuous, stupid remark! Only those who do not think would attempt to take the Lord Chancellor’s observation from its proper context. If the passage had been read in full, it would have been seen that Mr. Odgers went on to say, at page 235 of his book -

However, where the evidence which is sought relates to official communications between public officers and consists only of objective factual material which is explanatory of the operation of the regulations under consideration-

In this instance, it would be explanatory of the circumstances of the construction of the post office - privilege should not be claimed.

No Minister who has had access to the file has taken the course of asserting that it contains matter which is properly the subject of privilege. For those reasons, Mr. Deputy President, I ask the Senate to agree to the motion that I have proposed.

Question put -

That the motion be agreed to.

The Senate divided. (The Deputy President - Senator the Hon. A. D. Reid.)

AYES: 15

NOES: 26

Majority……11

AYES

NOES

Question so resolved in the negative.

page 972

SALARIES (STATUTORY OFFICES) ADJUSTMENT BILL 1960

Second Reading

Debate resumed from 10th May (vide page 825), on motion by Senator Spooner -

That the bill be now read a second time.

Senator CANT:
Western Australia

– The bill proposes increases in the salaries of certain statutory offices. I want it to be clearly understood at the outset that we on this side of the Senate do not oppose salary increases, but we reserve the right to criticize any increases in salaries which we consider are not equitable. In this instance, we consider that not only are the increases not equitable but also they are in contradiction of statements made by the Prime Minister(Mr. Menzies), and of action taken by the Government in relation to other workers who must go before a tribunal for adjustment of their rates. Some time ago when discussing the application to highly-paid officers of the Public Service of increased margins awarded by the Commonwealth Conciliation and Arbitration Commission, Mr. Menzies said that he knew of no other country where such a ridiculous position operated. We find that most of this ridiculous position referred to by the Prime Minister emanates from Government action.

In a report tabled in the Senate this week, the Standing Committee on Regulations and Ordinances stated -

The explanatory memorandum accompanying the regulations is probably unique for the fact that it quotes a Cabinet decision. The memorandum says - “ The adjustments have been made in accordance with Cabinet decision No. 578 of the 15th December, 1959, which reads -

It was decided that the Public Service Board should be informed that Cabinet -

Agreed that Fourth Division Salaries up to and including the level of Tradesman should be adjusted on the basis of a 28 per cent. increase in margins:

We do not quarrel with an adjustment of 28 per cent. to the margins of tradesmen, except to the extent that it does not restore the former relativity of the margin to the primary wage, which is the basic wage. The memorandum continued -

  1. Considered that salaries at the top of Second Division should be increased by an amount of the order of £750, and that the Board should proceed to make an appropriate adjustment of all intervening classifications down to those of Tradesman in the Fourth Division.”

The cost of those increases approved by Cabinet - not by any tribunal - was £15,500,000. The cost of the increases now proposed for top-level public servants will not be as high as that. It is interesting to note that Cabinet agreed that a 28 per cent, increase in margins should be given to tradesmen and the whole of the Fourth Division. The bill proposes that the Senior Conciliation Commissioner, who is one of the persons who deal with the wages of workers, shall have that portion of his salary which is in excess of the basic wage increased by 33i per cent. The margin of a commissioner will be increased by 38.25 per cent, and that of a conciliator by 35 per cent. Other proposed increases range from 17 per cent, to 23 i per cent. Yet the Prime Minister complained, that he knew of no other country where such a ridiculous position operated.

The Minister for National Development (Senator Spooner), in his second-reading speech, said -

The purpose of this bill is1 to give effect to a> decision of the Government to increase the salaries of the holders of the statutory offices included in the schedule to the bill, the salaries of which are provided by special appropriation. As honorable senators will know, salaries for members of the Public Service were recently reviewed by the Public Service Board and substantial increases were provided The Board’s authority does not apply to statutory offices or to offices in the First Division of the service, but the increases which were approved in the lower divisions have led the Government to review the salaries of statutory offices. . . . lt was not a matter of adjusting salaries on the basis of a court decision. This was a review of salaries, which is something different from an adjustment of salaries. The Minister continued -

Tn assessing the salaries appropriate to the several offices affected by the proposed legislation, the Government has considered not only the general increase in salaries within the Commonwealth service; it has considered also the general trend of salaries for high executive positions as well as the responsibilities and complex duties of the positions concerned.

It appears from the Minister’s own stater ment in his second-reading speech that what is involved is a reassessment of the salaries of these top-level public servants, and not a marginal adjustment at all. The Minister said -

Increases to lay commissioners and conciliators also include recognition of the status and responsibilities, of these positions in existing circumstances.

In effect, the salaries have been increased, for the reason given by the Minister, by £250 and £150 respectively, although the increases shown in the schedule amount to £875 and £715. So that there is a reclassification of the positions to the extent of £250 and £150, in addition to what might be termed the marginal increases.

Let us compare the Government’s actions in respect of these salaries with its attitude of opposition towards the just claims of the workers for an increase in the basic wage. The Government took action to see that the workers were denied their just rights with regard to a basic wage increase, but, more important, it took action to see that the wage standard set by the court did not have its value maintained. It did this by opposing the application for the restoration of quarterly adjustments of the basic wage according to movements in the C series index. For those who may not understand exactly what the C series index means to. the wage, let me explain that the wage contains no component definitely related to that index. In the first place the court set a wage that it believed, after an examination of the economic position, industry could afford to pay. The procedure then is - or was until 1953 - to consider movements in the index and make adjustments to maintain the value of the wage based on the amount required to provide the necessaries of life in a home, calculated according to the figures appearing in the C series index. So the C series index has no definite application to the wage at all; it is merely an index that can be referred to in order to make adjustments.

The most important part of the workers” claims that the Government opposed was that which asked for a restoration of quarterly adjustments based on movements of the C series index. On every occasion, that the court or the commission has refused to restore the quarterly adjustments it has, in effect, said, “We were wrong when we fixed a standard wage in the first place “.

In its judgment in the basic wage case the commission decided that the position of the economy was then the same as it was last November when a 28 per cent, increase in margins was granted by it. In its judgment the commission re-affirmed that industry was able to bear a 28 per cent, increase in margins. In the basic wage judgment it confirmed that conditions had not altered. It said -

On the material now before us we agree with the general conclusions of the commission in that case (the Margins case) as to the state of the economy.

It also expressed agreement with the decision in that case. What did the commission find with respect to the economy in the margins case? It found that the economy was buoyant, and that it could stand an increase in the wages bill. It found that there was no necessity for costs to rise as a result of the margins decision, because any increased costs could be provided for out of excess profits. In the recent basic wage case the commission found that these conditions still existed. Nevertheless, the arguments put forward by the advocate for the Australian Council of Trade Unions, and those adduced by Mr. Aird for the employers, were given little consideration. The judgment was based on the material placed before the commission by Mr. Eggleston, representing the Commonwealth Government.

For these reasons we criticize statements made by the Government, through its representatives, to the effect that it does not know of such a ridiculous position operating anywhere else. It deplores the fact that it has to grant increases to public servants, and at the same time it sends its representatives to the commission to say that the economy cannot stand a further increase in the basic wage. The fact is that there have been rises in costs as a result of which the wages of workers have depreciated. Yet the Government goes to the extent of reassessing the salaries of those in the top brackets, who can easily afford to remain on their existing salaries, and also applying marginal adjustments to those salaries.

The commission had this to say, as a result of the submissions put forward by Mr. Eggleston -

The Commonwealth’s position in the present case is unambiguously clear. It is that having made all the considerations which seemed to it to be relevant to the present and prospective state of the economy, the Commonwealth is convinced that above all what is needed now is a firm rejection of any new measures that would add to the current inflationary pressures, and time for the adjustment of the economy to the general wage increases awarded over the past twelve months. Such a clear statement of the Commonwealth’s attitude, supported as it is by submissions and economicmaterial, is a matter which the commission must seriously take into account. We accept the submissions made by the private employers and by the Commonwealth Government that we should not award an increase in the basic wage.

Earlier in the judgment, of course, the commission had found that conditions had not altered since November of last year, when it delivered its margins decision, but under pressure from the Government it refrained from increasing the basic wage. It seems to us completely inequitable for the Government to adopt this attitude and yet go to the extent of granting such large increases as are provided for in the measure before us. Only one of these increases is less than the amount of the present basic wage, and that by only £3 per annum. A conciliator is to be granted an increase of £715 a year, while the basic wage, calculated on the basis of the average of 30 towns, amounts to £718 per annum. In every other case the increase is greater than the amount of the basic wage paid to workers for a full year’s work. The “ West Australian “ newspaper of 2nd March, under the caption, “ Canberra Opposes Increase in Wages “, stated -

Feeling these effects and others of the kind, the Commonwealth maintains that our economy needs and ought to have a respite from further wage increases . . .

The Government stated in that instance thai there should be no increase, that there should be a respite from increases, but it continued to make increases. The “ West Australian “ of 22nd February, under the caption, “ Menzies: We Oppose a Basic Wage Rise “, stated -

The wages and margins decisions had capped the combined effect of the demand inflation which had been built up by other factors in the economy.

But we are not told of the other factors in the economy. The Conciliation and Arbitration Commission mentioned at least one of them, which was the matter of excess profits. Yet it is only the wage-earner who is singled out for attack. Also on 22nd February, under the caption, “ Menzies

Explains Drive on Costs and Prices “ another Western Australian newspaper stated -

Much that is going on in industry and trade and construction is undoubtedly sound and beneficial. We do not want to check and impede this. What we do want, however, is a restraint on certain developments such as the price and cost movement, which have been tending to get out of hand and which could, unless counteracted, undermine our stability. lt is important to remember that the Prime Minister there drew attention to prices and costs. 1 know it will be said from the other side that the greatest factor in costs is wages, but T want to remind the Senate - I have said this before and it is worth repeating - that the wage factor in the cost structure in the past decade has decreased from 52 per cent, to 48 per cent., but the gross profit margin has remained constant at 19 per cent.

Senator Wright:

– What is the basis of that statement, Senator?

Senator CANT:

– 1 got it from a Professor of Economics at the University of Western Australia. The information was also published in the press. If Senator Wright would like to see the press cutting. I shall make it available to him.

Senator Wright:

– Thank you.

Senator CANT:

– We feel that if the Government considers that these public servants are entitled to a re-assessment of their wage rate - if they are entitled to an adjustment of their rate to maintain its relation with the grades that are below them - it should be honest and say so. The Government in the public press should not criticize the workers for going to the courts and asking for wage justice. The workers have to be able to substantiate a case for an increase. The public servants whose salaries we are now considering do not have to do so. They are a bit luckier than the parliamentarians, who have to submit their case to a committee set up to inquire whether their wages should be adjusted. There is nothing like that in this instance, and there was nothing like that in respect of the other public servants because Cabinet decided that the rates should be increased. We feel that while the Government is taking this action it should not express one opinion in the public press and make decisions in the Cabinet room that are completely contrary to the public statement.

We take this opportunity to criticize the Government severely for its action in opposing the restoration of quarterly adjustments of the basic wage. This statement has been made on several occasions. Every time the C series index is applied to the basic wage in a period of rising costs, the cost structure is affected and prices go up. But let me remind honorable senators how this vicious circle works. There must be an increase of costs before an increase can be applied to the basic wage, lt means simply that the prices of commodities thai make up the C series index must, during the previous three months, have increased so as to establish an increase in the index figure to be applied to the basic wage. So, whatever happens, the worker’s wage is always some months behind prices. It is not necessarily three months behind them. The position depends to a considerable degree on the time at which the survey is made during the three monthly period. From my observations, this survey is usually made about the middle of the three monthly period, so that the best that can be said for it is that the worker’s wage is six weeks behind prices. But the Government puts before the court that the cost of Jiving index should not be applied to the wage at all; this claim simply means that the value of the wage should not be maintained.

The Government’s attitude in this mattei was that there had been an increase in the basic wage and an increase in margins, ana industry should be given an opportunity to digest the total increases which, it wa>> said, increased the wage bill of the nation by £165,000,000. There is no doubt that evidence to that effect was placed before the commission in the basic wage case because, in several passages of its judgment, the tribunal has referred to it. The workers are entitled to have their wage rates maintained.

We on this side of the chamber, Sir, will not oppose the increases which this legislation approves, but we do criticize the Government for its action in relation to the rest of the working community.

Senator WRIGHT:
Tasmania

.- This bill, I believe, is of more importance than appears upon the face of it, and the Minister in charge of it in another place, the Acting Prime Minister (Mr. McEwen) was good enough to indicate the insignificant place that he gave to this measure by saying that it concerned only a handful of people. That is so, but the reason why a bill of this nature has to come before the Parliament is that although it concerns the salaries of only a few people, they are the few who are most significant in the Public Service. Although it concerns only a handful of people, that is not an indication of its importance. Its importance derives from the fact that it is a proposal to make a huge salary increase to persons in a field of authority which is entirely the responsibility, first, of the Government, and then of the Parliament. There are few such fields in Australia. But this particular field is the exclusive responsibility of this Parliament. Here, by the vote on this bill, the Parliament can indicate what in its view is the proper standard of increase in relation to the circumstances of 1959. My view is that by bringing forward this bill the Government has abdicated its responsibility and shown imprudence of a very grave order.

Senator Cant reminded us of the events that took place in relation to the basic wage hearing earlier this year. I believe that those events have a little relevance to the terms of this hill, but it is legitimate to remind ourselves that workers in the industrial field are entitled - I choose my terms carefully - to misconstrue the actions of a government which tells the Arbitration Commission that increases in the wages of workers are inappropriate to the condition of the economy when at the same time legislative proposals for these high increases in salaries are ready for presentation to the Parliament. That practice is likely to give rise to doubts about the sincerity of the Government. I referred to similar matters during my speech on the motion for the adoption of the Address-in-Reply. In the industrial sphere it is most important that issues shall be clearly presented so that the humble wage and salary earner will have no lack of confidence in the Government.

The reasons why I fmd myself quite incapable of subscribing to this bill can be simply stated. I believe that the management of the economy in 1959 was calamitous. The consequences of that management will be damaging to the economy for a considerable time and if this country suffers bad seasons, those consequences may be damaging to an unfore seen degree. We have been told that the basic wage decision of last year added £60,000,000 to the cost structure of the economy and that the margins decision added £90,000,000-a total injection of costs in the wage factor alone of £150,000,000. We cannot dissociate ourselves entirely from that course of events because to quite a considerable degree that situation was brought about by the ‘example that we gave in the fixation of salaries of members of Parliament.

Senator Vincent:

– Do you think that the court had regard to that factor?

Senator WRIGHT:

– I think that undoubtedly that factor had a great influence on the court.

Senator Vincent:

– Have you a reason for saying that?

Senator WRIGHT:

– Yes.

Senator Vincent:

– Let us have it.

Senator WRIGHT:

– I do not propose to be side-tracked. I have put this view forward in other speeches, what may be read, and 1 put it forward before the court gave its decision. It is with a sense of (responsibility that I remind myself that I put forward this view in warning of the effect that the Government’s action would have. We had already traversed the whole gamut of the spiralling increases in costs. It was a matter of intense disappointment to me that we contributed to those increases in March, 1959. In January, 1960 the Government was so concerned with the position that, notwithstanding its obligation to set an example to responsible authorities in the community, it suggested to the body charged with the fixation of Public Service salaries the approach that it should make to the question of their appropriate adjustment.

Let us consider two sections of officers who are dealt with by this bill. First. I propose to deal with the chairman and members of the Public Service Board and, secondly, I propose to deal with the Public Service Arbitrator. In relation to .the Chairman of the Public Service Board, we are invited to vote an increase of £900 to a salary of £6,000. In relation to the members of the Public Service Board, we are invited to add £900 to an existing salary of £5,000. In relation to the Public Service

Arbitrator we are invited to add £900 to a salary of £5,000. Having made the point that these salaries are specifically reserved for Parliamentary fixation, because they are the key and the index that this Parliament gives to the standard of adjustment which in its judgment is appropriate, let us see the way in which the Government has approached the problem. We can remind ourselves of the most impressive remark of the Prime Minister (Mr. Menzies), in February last when he said that these proposed increases in salaries were the unavoidable result of certain industrial decisions. He went on to deplore that the theory had become current that when a margins decision is given in the wage structure it should be translated, with some degree of scaling down as to the percentage rate, into all levels of salaries. For the life of me I cannot see how that is facing up to parliamentary responsibility. If the Government believes that the theory of translating industrial margins decisions into the top level of salaries is erroneous, why follow that course? Why not take the responsibility of Parliament and stop this practice? Even if it is too late to do anything in respect of the 1959 decision, let us put it firmly on record that this practice is not to be followed in the future. Bearing in mind the dangerous state of the economy as it existed in the first quarter of this year, the Government is completely lacking in responsibility in saying that an increase of £900 should be made to an existing salary of £6,000. Such an increase has no rational relationship to any decision made in another jurisdiction. Speaking on this bill in another place the Minister for Labour and National Service (Mr. McMahon), said -

Sir, this was initiated by the commission, and the Government, with respect to the first division, I think wisely, followed the lead of the Public Service Board and of the commission itself.

Later he said -

I hope thatI have made the point that this bill is a consequence of what was done ‘by the Arbitration Commission and then by the Public Service Board.

Referring to the officers who are dealt with under this bill, the Minister said -

They advise the Ministers and in truth are an essential element of the government of this country.

So there is clear confession that the Government has felt itself compelled to make this decision, following the decision of the Public Service Board and the Commonwealth Conciliation and Arbitration Commission.

Senator Spooner:

– What would you do? Would you have the No. l’s in the departments getting less than the No. 2’s?

Senator WRIGHT:

– No.

Senator Spooner:

– That is the position you have to face.

Senator WRIGHT:

– No, certainly not. I completely disagree. If my leader will be so good as to give thoughtful consideration to the statutory provisions and regulations that are set forth in the sixteenth report of the Regulations and Ordinances Committee, he will see that Parliament thrust upon the Government the primary responsibility of withstanding any ill-advised action to alter Public Service salaries that emanates from the Public Service Board. In that report he will notice something that should be like a warning post to those who have had the unique experience of seeing a Cabinet decision quoted as a direction to the Public Service Board regarding the level at which it should fix Public Service salaries.

Senator Spooner:

– I did not remember any direction. I thought Cabinet agreed.

Senator WRIGHT:

– If the Minister will pardon me, the document that came to us said -

The adjustments have been made in accordance with Cabinet decision No. 578 of the 15th December, 1959, which reads -

It was decided that the Public Service Board should be informed that Cabinet -

Agreed that Fourth Division Salaries up to and including the level of Tradesman should be adjusted on the basis of a 28 per cent. increase in margins.

Senator Spooner:

– That was by regulation, but you said it was by Cabinet direction.

Senator WRIGHT:

– I will complete the quotation and then comment. The memorandum continues -

  1. Considered that salaries at the top of Second Division should be increased by an amount of the order of £750, and that the Board should proceed to make an appropriate adjustment of all intervening classifications down to those of Tradesman in the Fourth Division.

If that is not a direction. I do not know what is. What 1 am saying is that if the board put forward a proposal for the increase of any of these salaries that were within its province, the proposal had no effect without the approval of the GovernorGeneral. The Governor-General is specifically required, if the Government disagrees, to send the recommendation of the board back to the board. If the board again disagrees and the Government is dissatisfied, the Government is then bound to have the papers laid on the table of the Parliament. That course should be followed in the fixation of salaries the determination of which is the prerogative of this Parliament. If that had been done we would not have had the position where the second-in-command was in receipt of a salary, through the decision of the Public Service Board, in excess of that of the Chairman of the Public Service Board or a departmental head. 1 wish to be heard saying that, in my view, what has been done is less than the standard of responsibility that I would hope a government would observe at the perilous stage that our economy has reached, I think it is completely imprudent to add this huge increase to Public Service salaries. I remind the Senate how grievously out of proportion the increase is when we consider the primary producing section of the community. During the last three years the cost of goods that section has had to purchase has increased by, I think, 10 per cent., and the prices received have been reduced. There is an alarming situation. During the last ten years, salaries throughout the country have increased from £1,100,000,000 to £3,100,000,000, an increase of nearly 300 per cent., yet farm income has remained virtually static. Farm income amounted to about £400,000,000 ten years ago and is about £450,000,000 to £500,000, 000 now. When you consider the value of money today in relation to its value in 1949 you can realize the degree to which the primary producing sections of the community have become pauperized. The state of our external markets is such that we will not be able to maintain a primary producing economy which returns about1½ per cent. to 2 per cent. on the investment in contrast to investments made in the cities which can yield 8 per cent to 10 per cent or even higher.

We have a responsibility - a solemn if sorrowful responsibility - to curb the inflation that is going on in the cities and which is fomented by the Public Service here in Canberra. We want to achieve that degree of balance which will give real prosperity, such as was advocated yesterday by Mr. Hoskins, the President of the Australian Mutual Provident Society.

These are general considerations, but there is a special consideration that 1 believe introduces into ‘this proposal an element suggestive of impropriety. It is the members of the Public Service Board who were responsible for a recommendation to alter Public Service salaries in the light of the margins decision. They brought forward proposals which were the subject of the minute from Cabinet that I have already read. As a result of the recommendations the seconds-in-command and subordinates had their salaries increased by £750or something a little less. Is the position to be that the members of the Public Service Board know that if they recommend an increase of £750 for subordinates it will automatically mean that an increase of £900 comes up for them next morning in the lift. If that process is implanted in government - it seems to be the accepted automatic procedure here - it is calculated to introduce real impropriety into the system. When it is carried forward from the members of the Public Service Board to the Public Service Arbitrator, it cannot be justified. This is a matter that causes me very deep anxiety because the Public Service Arbitrator is a person who should be completely independent in the exercise of his judgment. It is not right that the viewpoint should prevail that if the salary of the subordinates is increased the next step is the automatic increase of the salaries of those at the top level.

I have no pleasure in registering my dissent regarding this bill, but for the reasons I have given. I am bound, in the interests of this country, of the economy and of the integrity of the Public Service, to say that I cannot accept the measure.

Senator MATTNER:
South Australia

– The introduction of the bill before the Senate is a result of the recent decisionby the Commonwealth Conciliation and Arbitration Commission that certain margins should be increased.It is difficult for a layman to see the connexion between an increase of margins for skilled tradesmen and a similar increase for public servants. In my view, the margins award was sound so far as it related to skilled tradesmen and officers of the Public Service in the lower divisions. Of course, once the increase had been applied to the salaries of officers in the lower divisions of the service, the remuneration of those in the top brackets was out of line.

I understand that the cost of the increase of Public Service salaries, as a result of the margins award, will be £10,000,000 a year. The Public Service Board has claimed that the salary adjustments were made in accordance with Cabinet Decision No. 578 of 15th December, 1959. At a later stage of my remarks, I shall refer to the sixteenth report of the Regulations and Ordinances Committee. While I am greatly concerned with the increases proposed by the bill, I am even more concerned, as I think all honorable senators should be, with the increasing growth of government departments, in regards to both size and functions. This has resulted in the power and influence of the Parliament being transferred from this place to the hands of officers of the permanent civil service. No doubt those officers are men of ability, with strong private political opinions. In the days of a previous government, such officers, it was believed, were selected because of their political opinions.

The Parliament has conceded to the government departments wide powers and virtual autonomy. We, in this place, are frequently informed that we must concentrate on general principles and leave to the respective departments the task of working out details. In other words, our legislative supremacy is being challenged. That supremacy could be overthrown, not by a direct assault or by the practical realization of socialistic theory, but because we had delegated our powers to the various departments. As an instance, I refer to the power that is given to Ministers to make regulations. Year by year, the Parliament is losing its fundamental purpose as a legislative body. Eventually it could assume - although I hope it will never do so - a minor role as a weak agency for the recording of executive acts. I think, Sir, that it would repay us if we dwelt for a while on this subject. We should see to it that the Parliament does not become just a springboard for executive acts. I have often noticed in this chamber that ministerial decisions have been made and acted upon prior to the introduction in the Parliament of legislation to give effect to those decisions. That has happened under both Labour and Liberal governments. It should not be thought that administrative powers are declining. In fact, such powers grow when controls are exercised and when there is the compulsion that is associated with all forms of nationalization. The Parliament must resist the inroads that are being made in its legitimate role.

The Senate Regulations and Ordinances Committee - a very sound committee - has discovered that the bulk of subordinate legislation greatly exceeds that of statutes. Even that committee cannot be sure that it copes effectively with the flow of regulations, rules and orders from the various departments. The maintenance of the sovereignty of Parliament should be of fundamental interest to every member of the Parliament. That sovereignty is a part of our inheritance and is a distinguishing mark of British democracy. It is not uncommon to see the surrender to the Executive of powers which have been won through centuries of toil and, at times, through bloodshed. Rights and privileges are surrendered to the government of the day, which in turn hands them down to the civil service. It is a well-known fact that once power has been conceded to the Executive to meet a special emergency, there is always strong resistance to the return of the power, even though the emergency no longer exists.

We live on the edge of a dictatorship. One form of protection against dictatorship is an effective and alert second chamber in the Parliament. It is difficult, in a time of economic and political imbalance, to maintain a proper balance between freedom and control, but our side of politics must attempt to preserve such a balance if the rights of the individual are to prevail. Sir John Crawford is reported to have said some time ago that, since permanent heads of departments could conceivably find themselves in the position of usurping the rights of Ministers, checks were needed. He went on to say that civil servants were not only making government policy but also were initiating and carrying through decisions without waiting tor ministerial approval. 1 could cite any number of instances in which that has been done. I shall refer to one such instance which, 1 believe, is well known. The recent increase of postal charges was a case for the exercise of parliamentary vigilance. I believe that we had very little say in that matter. I think that the subject is a very debatable one. I believe that officers of the Treasury usurped the right of the Parliament to say what we should have had and what we should not have had in that respect.

Another clear example of the need for vigilance is provided by the manner in which bills are brought before the Parliament. Important bills are introduced towards the close of every session of the Parliament. Whether a Liberal or a Labour government is in office, in many cases, if bills are of a contentious nature, they are not introduced until we are almost in the dying days of the session. To my way of thinking, that happens too often to be accidental.

I return to the bill before the Senate which, after all, has caused me to make my previous observations. The introduction of the bill indicates the need to safeguard the rights of the Parliament. I think that all we can do in respect of the matter that we are considering is merely to ratify a decision that has been made, not by the Parliament, but by the Public Service Board. In my view, the Senate would be performing a public duty if it resisted the curtailment of parliamentary powers, this insidious curtailment that seeks to justify itself by a plea of social necessity.

The sixteenth report of the Senate Regulations and Ordinances Committee, which was presented to the Senate this week, deals effectively with Public Service regulations, and it has a bearing on the bill that is before the Senate. We all know that the recent increases granted to public servants will cost this country £15,500,000 a year. Surely the Parliament should have some control over the amount of money voted for the salaries of government employees. We, who are supposed to control the purse, apparently have no control over gigantic sums of money that are being expended. It is time that we took some steps to safeguard the rights of Parliament. As the committee reported, there should be some reasonable limit beyond which increases should be authorized only by the Parliament. The committee suggested that a figure of £2,000,000 a year might be appropriate. Recently the Parliament decided that some, but not all, public works costing over £250,000 should be examined by the Public Works Committee. That was a wise decision.

The 28 per cent, increase in tradesmen’s margins was applied to Public Service salaries in a manner that I believe was never intended, and an injustice was thereby done to the Australian economy. I do not think that the commission ever intended that the judgment should be so applied. 1 am completely in favour of the increased margins granted to skilled tradesmen. I thought that that judgment was sound. But for the life of me, I cannot see why a flat rate of 28 per cent, should be applied to the salaries of Commonwealth public servants, whose conditions of employment are far different from those of skilled tradesmen. I do not oppose the bill, but I wish to make myself perfectly clear regarding this ad hoc expenditure of £15,500,000 a year. Surely Parliament should be able to devise some means of avoiding the incurring, without its authority, of so large an expenditure in the future.

Question resolved in the affirmative.

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

Senate adjourned at 10.25 p.m.

Cite as: Australia, Senate, Debates, 12 May 1960, viewed 22 October 2017, <http://historichansard.net/senate/1960/19600512_senate_23_s17/>.

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