Senate
24 August 1960

23rd Parliament · 2nd Session

  1. Senate
  2. 23rd Parliament
  3. 1960

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

page 165

QUESTION

SEARCH FOR OIL

Senator McKENNA:
TASMANIA

– I direct a question to the Minister for National Development. Can he tell me whether he has seen recent newspaper reports which claimed to be quoting information from the report of the Petroleum Institute of France which, I understand, has just completed its preliminary investigations into the possibilities of rinding oil in Australia? One of the reports stated that an American oil company was planning its exploration programme on the basis of geological reports made to the Government by the institute. Can the Minister indicate to the Senate whether those reports are correct? If they are not, will he tell honorable senators the situation at the moment regarding the institute’s report?

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

– The newspaper reports to which Senator McKenna has referred have been brought to my attention. I wish to say quite categorically that those reports are incorrect. The report from the Petroleum Institute of France has been completed only during the last few days. It is quite a voluminous report. It has not been released, nor have any of the conclusions of the institute been made public. While I was overseas, my colleague, Senator Henty, made a public statement in which he said that it would be weeks before the report was completed and dealt with. At that stage, Senator Henty sounded a note of warning against speculation as to the possible contents of the report. Honorable senators will realize the implications of speculative talk as to what the institute might recommend in relation to various areas in Australia. Therefore, Mr. President, I say that speculation regarding the contents of the institute’s report can do nothing but harm to the search for oil in Australia.

The Commonwealth Government retained the institute, and whatever recommendations it makes will be regarded with tremendous interest by all who are engaged in the search for oil in this country. I sum up the position by saying that the report has only just been completed; it has not yet received consideration; its contents have not been made public; and, therefore, any views that are expressed about it are likely to be not only incorrect but also harmful to the objective of the search for oil.

Senator ANDERSON:
NEW SOUTH WALES

– I address a supplementary question to the Minister for National Development. I note that five more applications have been approved for oil search subsidies - three in Queensland, one in the Northern Territory and the fifth in Victoria - and that the total subsidy involved in the five applications is £312,000. of which £207,000 is to be spent in this financial year. I ask the Minister: In view of the wide public interest in the dramatic search for oil in Australia, which is being assisted so notably by Government policy, and particularly in view of the interest being displayed by the private investment sector in Australia, is it the intention of the Department of National Development to publish from time to time an authoritative report on the progress being made by each of the oil search companies that operate with the aid of government subsidies?

Senator SPOONER:

– Senator Anderson may recall that I have said previously in this chamber that the results of any activity which is subsidized by the Government become available for the public benefit, with the reservation that it is thought equitable that a company which has paid half the cost of drilling a hole or of a survey should have the information for its own use and benefit for a period before it is made public to the benefit, perhaps, of its competitors in the same area. The reservation has been made that the information should not be released for a period of twelve months. Only a few days ago, I asked the department what was the position, at the same time stating that I thought that in respect of some of these subsidized operations the twelve-month period had expired. I asked officials of the department what arrangements were being made for the release of the information. I do not think it would be possible to adopt the honorable senator’s suggestion that a report upon the activities of the individual companies should be made available-

Senator Anderson:

– I suggested only that the information be published from time to time.

Senator SPOONER:

– Well, fortunately a great number of companies are interested and they give information very freely to the department about the work they do. It gives great satisfaction to note the cooperation that exists between the State departments concerned, the Commonwealth departments and the people who are actually engaged in the search for oil; but I think it would be carrying - things a bit too far. to say that information about what they do should be made available generally. would like time to think about it.

page 166

QUESTION

UNEMPLOYMENT

Senator BENN:
QUEENSLAND

– I ask the Minister representing the Minister for Labour and National Service the following questions: Is the Minister aware of the fact that in the town of Gladstone in central Queensland there are at the present time approximately 800 men and women unemployed? Is he also aware of the fact that because of the distance between Gladstone and industrial centres in Queensland the 800 men and women now unemployed expect that they will be workless during the next seven months? Will the Minister inform me whether he has any positive proposal under consideration for the immediate relief of those 800 people?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I shall bring Senator Benn’s question to the attention of the Minister for Labour and National Service so that he may inform the honorable senator whether he knows that 800 people at Gladstone are at present unemployed. I presume that the people referred to were employees of a meatworks which does, and always has, shut down from time to time, and is expected by these unemployed people to shut down. I shall, also ask the Minister to inform the honorable senator what positive, plans there are for the employment of these 800 people, in addition to the known plans he is implementing to provide employment for those workers in Queensland who need it and who can all get employment . provided they can move to ^centres where it is available, i ; Senator SCOTT. - I wish to ask a supplementary question.

The PRESIDENT___ Order! I suggest that honorable’ senators, in asking a supple- mentary .question, should make sure that it is. not ‘ entirely unrelated to the preceding question.

Senator SCOTT:
WESTERN AUSTRALIA

– The question I wish to ask is prompted by that asked by Senator Benn on unemployment. I ask the Minister representing the Minister for Labour and National Service whether it is a fact that over the last month unemployment in Australia has decreased to such an extent that at the present time only some 14,000 people are drawing unemployment benefit. Is it a fact that this number is the lowest in the history of Australia?

Senator GORTON:

– I understand it is a fact that this very small number of people are in receipt of unemployment benefit and that Australia has the lowest proportion of unemployment in the world. This, of course, is quite relevant to the question asked by Senator Benn because it bears out part of the answer I gave to his question, namely, that the Minister for Labour and National Service is implementing schemes to make available employment for people, provided they can move from areas which are temporarily centres of unemployment.

page 166

QUESTION

CIVIL AVIATION

Senator LAUGHT:
SOUTH AUSTRALIA

– I preface my question, which is addressed to the Minister for Civil Aviation, by pointing out that it was claimed by a feature writer in the Adelaide “ Advertiser “ of 13th January last that Adelaide airport is being officially nominated for use by big trans-Pacific jet airliners whenever both Sydney airport and Brisbane airport are closed because of adverse weather conditions. The two types of aircraft mentioned were the PanAmerican Airways Boeing intercontinental jet planes which carry 113 passengers, and the Qantas Boeing 707 jet which carries 90 passengers. Can the Minister state whether Adelaide airport can now be regarded as fully equipped to receive transPacific jet airliners of the classes 1 have indicated if circumstances prevent their landing in Brisbane or Sydney?

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

– The position is that Boeings are authorized to use Adelaide airport when Sydney airport and Brisbane airport are not open for one reason or another; and the Comet aircraft may also use Adelaide airport when Sydney, Melbourne and Mangalore airports are not open.

page 167

QUESTION

ROYAL AUSTRALIAN NAVY

Senator McKENNA:

– Is the Minister for the Navy in a position to advise the Senate of decisions reached on the re-equipment of the Navy following the overseas mission of the Chief of the Naval Staff with an expert team which the Minister for Defence stated on 29th March last had completed its investigation? If not, will the Minister say when he will be able so to advise the Senate?

Senator GORTON:
LP

– Decisions on what is required for the re-equipment of the Navy have been made by the Navy and have been sent to the Department of Defence, whose responsibility it is to recommend whether requirements for the Navy fit in to the overall scheme of national defence and whether they can be financed out of the overall defence vote. I understand thai the Chiefs of Staff have completed their consideration of these proposals, and I have no doubt that they and the Department of Defence will be tendering advice to the Minister for Defence shortly, if they have noi already done so. I expect to have final conversations with the Minister for Defence either late this week or next week. The result of those discussions will require Cabinet consideration, and until that consideration has been given J am afraid no advice as to the decisions can be given to the Senate.

page 167

QUESTION

DRIED FRUITS

Senator PEARSON:
SOUTH AUSTRALIA

– On 30th March last, 1 asked the Minister representing the Minister for Primary Industry whether he had anything to report in connexion with proposals to stabilize the dried fruits in- dustry in South Australia. The Minister said on that occasion that the industry had been offered a stabilization plan identical in all respects with that which it rejected in August, 1957, but that up to that time the association representing the industry had not intimated its intentions. Does the Minister know whether any water has flowed under the bridge since that date? If so, what do the growers intend doing? Are they going to take a ballot on this question? If so, when will it be taken?

Senator GORTON:
LP

– As this question refers to South Australia, I have no doubt, from what we have heard in the Senate, that a great deal of water has flowed under the bridge, all of it commanded by Sir Thomas Playford. I am afraid that the answer to the question is not in my mind. I shall get an answer for the honorable senator from the responsible Minister.

page 167

QUESTION

LAND PRICES

Senator COURTICE:
QUEENSLAND

– Is the Leader of the Government in the Senate aware that the unhealthy boom in the price of land for home-building, caused by speculative buying by real estate empires, is resulting in great hardship to thousands of Australian people who wish to buy land on which to build homes? Will the Government confer with the State Premiers on means to solve effectively what is now a most grave social problem?

Senator SPOONER:
LP

– Senator Courtice asks a good question, but it is not an easy one to answer. There is no doubt that there has been a great increase in the price of land and that this is causing difficulties, particularly to young people who are eager to build homes, but what the Commonwealth Government can do about it is rather difficult to see. I have some ideas about it myself, but whether they will rind a place in the general housing proposals remains to be seen. I should think that there would be a disposition on the part of the State Premiers to say that this was a matter which was so intimately their own that there was little that the Commonwealth could do. Therefore, 1 should think that the Prime Minister might well hesitate before intruding.

Senator O’BYRNE:
TASMANIA

– I direct a supplementary question to the Leader of the Government. Will he consult with the Minister for the Interior with a view to stopping the boom in land values in Canberra? Will the Government give a lead by making available building blocks in Canberra and putting an end to the current rat race, instead of sponsoring the increase in land values and contributing to the evils that Senator Courtice has mentioned?

Senator SPOONER:

– I ask Senator O’Byrne to put the question on the noticepaper. I feel that if I attempted to answer it I would not do justice to my colleague, because I have a recollection that he has on foot proposals that may be aimed at remedying the trouble which is being discussed.

page 168

QUESTION

WHEAT

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– I ask a question of the Minister representing the Minister for Trade. How much f.a.q. wheat did Australia export to Japan in the ten years prior to the signing of the trade agreement with that country in 19577 What are the terms and conditions of the trade agreement with Japan relating to wheat? What wheat sales has Australia made to Japan since entering into the agreement?

Senator SPOONER:
LP

– Senator DrakeBrockman was good enough to tell me in advance that he proposed to ask this question as it is one that is not capable of being answered offhand. I have obtained an answer from the Minister for Trade. Separate statistics of exports of f.a.q. wheat have not been maintained but in most years sales were confined almost entirely to high protein wheat. The trade agreement with Japan provides an assurance by the Japanese Government that Australia will be given an opportunity to supply an equitable share of the Japanese market for soft wheat. The agreement provides also that Japanese imports of Australian f.a.q. wheat would not be less than 200,000 tons in the first year and that imports after the first year would show an increasing trend. I understand that during the three years since the signing of the agreement our exports have averaged something in excess of 250,000 tons a year, and that in 1959-60 our exports of wheat to Japan totalled about 370,000 tons. The great bulk of the increased wheat sales since the agreement was signed has been of f.a.q. wheat.

page 168

QUESTION

CANBERRA UNIVERSITY COLLEGE

Senator TANGNEY:
WESTERN AUSTRALIA

– I direct a question without notice to the Minister representing the Prime Minister. Is the Minister aware of the acute disquiet that exists in Canberra as a consequence of the decreased vote for the Canberra University College and the threat that this presents to the continuation of the science faculty which began its teaching courses only last year? Will the Minister give an assurance to students and university authorities that sufficient finance will be made available to enable the science faculty and other faculties within the university to be continued on the highest possible plane so that Australia will not be regarded as an orphan in the field of research, which was an expression used this week by an eminent Australian professor now resident in Great Britain.

Senator SPOONER:
LP

– The short answer to Senator Tangney’s question is that there is no variation in the plan for the Australian National University or the Canberra University College. What has happened is that the work has been retarded somewhat, or held back, but it will be completed in accordance with the original expectations, taking a little longer than was hoped some time ago.

Senator TANGNEY:

– I direct a supplementary question to the Minister. Whilst I agree that long-range plans exist for the continuation of the university on the highest possible level, will the Minister state what is the immediate intention with regard to third-year science students, who at present face the possibility that their studies at the Canberra University College may cease because of lack of accommodation and finance for next year? I am’ not so much concerned with the long-term plan as with the immediate plight of present second-year students who wish to continue to third year and obtain their science degrees.

Senator SPOONER:

– I am sorry that I am not sufficiently acquainted with the details of this matter to be able to answer Senator Tangney, but I know that all the matters that she has raised were taken into account at the time the decision was made on the Budget arrangements.

page 168

QUESTION

SEARCH FOR OIL

Senator SCOTT:

– I direct a question to the Minister for National Development. Is it a fact that two years ago the search for oil in Australia was almost coming to a stand-still? Was the Government so perturbed that it altered the Income Tax Act to encourage people to invest in companies engaged in the search for oil? If so, how was that act altered? Did the alteration have the desired effect, and how was the Treasury of the Commonwealth affected?

Senator SPOONER:
LP

– Income tax arrangements relating to the search for oil are that the capital subscribed for oil exploration is deductible in the case of a subscriber taxpayer. Profits earned from oil production are also tax free. We have had a substantial resurgence in the search for oil in Australia which has not yet become apparent in statistics. In other words an appreciable number of overseas companies have come to Australia and have outlined programmes, not all of which have actually been commenced. In some cases no evidence can be seen of the expenditure that has taken place. I did have some preliminary figures taken out, but 1 am sorry that I do not have them in my recollection. Those preliminary figures show a definite increase in the total expenditure in the search for oil this year by comparison with that in recent years.

page 169

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Senator McKENNA:

– My question is directed to the Minister representing the Minister for Air. Is he in a position to advise the Senate of the decision reached following the return from overseas of the Chief of the Australian Air Staff and the team of experts who, the Minister for Air stated on 31st March last, would visit the United Kingdom, France and the United States of America to investigate the re-equipment of the Royal Australian Air Force with fighter and bomber aircraft? If not, will he indicate when he will be in a position to do so.

Senator PALTRIDGE:
LP

– Since their recent return to Australia, the Chief of the Air Staff and the experts who accompanied him have been working on the technical details of their report, which has not yet been submitted to the Minister for Air. When the report has been completed it will be studied by the Air Board, which will advise the Minister for Air, who will in due course make a recommendation to the Government.

page 169

QUESTION

UNITED KINGDOM TRADE COMMISSIONER OFFICES

Senator BUTTFIELD:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Minister for Trade. Is it a fact that there is no United Kingdom Trade Commissioner office in South Australia? In view of the Government’s need to expand export trade in the next five years, the increasing need to strengthen Commonwealth ties, and the fact that approximately 80 per cent, of the wine exported, as well as other valuable export commodities, are produced in South

Australia, will the Minister take up with the United Kingdom Government the matter of establishing such an office in Adelaide as soon as possible in the hope of further developing trade with the United Kingdom?

Senator SPOONER:
LP

– I shall bring Senator Buttfield’s suggestion to the notice of Mr. McEwen for his consideration.

page 169

QUESTION

BANKRUPTCY LAW

Senator LAUGHT:

– Will the Minister representing the Attorney-General inquire of his distinguished colleague about the progress being made by the committee appointed some time ago to inquire into the bankruptcy laws of the Commonwealth? Is the report likely to be submitted to the Parliament for consideration this year?

Senator GORTON:
LP

– I shall request the Attorney-General to furnish a written reply to the question.

page 169

QUESTION

SALES TAX

Senator COLE:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. ls it a fact that there is a very heavy sales tax on soft-serve dairy products?
  2. Will the Treasurer obtain a review of the latest direction by the Commissioner of Taxation that the acceptable sales values of soft-serve products for the purpose of section 18 (1.) (b) (ii) of the Sales Tax (Exemptions and Classifications) Act should be calculated on the basis of not less than 24s. per gallon of liquid mix used?
  3. In reaching a decision for such a review, will the Treasurer give due weight to available evidence that the alternative sales values of 8s. 6d. per gallon by G. J. Coles Proprietary Limited Perth, and 10s. per gallon by Dairy Farmers Co-operative Milk Company Limited, Sydney, clearly show that the sales value of 24s. ruled as- acceptable to the Commissioner of Taxation is not based on commercial facts, and places an unjust burden of 37 per cent, sales tax increase on retailers in an industry which does much to assist our primary producers?
  4. Could this matter receive such early consideration as would enable taxation relief to be effected in the next Budget?
Senator PALTRIDGE:
LP

– The Treasurer has furnished the following reply: -

  1. Tax at the general rate of 12i per cent, applies to soft-serve dairy products, which is the same rase as is applicable to competitive products such as ice cream.
  2. The Commissioner of Taxation, who is responsible for the administration of the law, is already engaged in inquiries into representations which have been made to the effect that payment of tax should be accepted in respect of these products on a lower sale value.
  3. All material evidence will be taken into account in reviewing this matter. I am advised, however, that the commissioner has been unable to confirm that retailers of soft-serve dairy products are able to purchase the basic ingredients for these products at prices as low as those quoted by the honorable senator. Even if they could, however, this would not determine the sale value upon which sales tax must be paid by them because they are required to pay tax on the wholesale selling value of the soft-serve product as finally made by them from the mix. This value would inevitably be higher than the cost of the mix to them.
  4. The question of sale values involved in this matter is one for administrative determination by the Commissioner of Taxation. It will be dealt with as expeditiously as possible.

page 170

QUESTION

EMPLOYMENT

Senator CANT:
WESTERN AUSTRALIA

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

  1. How many applicants were registered for employment in Western Australia each month from September, 1959 to the present time?
  2. How many persons have received unemployment benefit in Western Australia for each month during the same period?
Senator GORTON:
LP

– The Minister for Labour and National Service has supplied the following information: -

  1. The numbers of applicants who were registered for employment with the Commonwealth Employment Service in Western Australia each month from September, 1959 to the end of July, 1960 - the latest figures available - were as follows: -

These figures relate to persons who claimed when registering that they were not employed, and who were recorded as unplaced at the dates shown.

The figures include persons who had been referred to employers but whose engagement hadnot been confirmed, and those who may have obtained employment without notifying the Commonwealth Employment Service. They include also recipients of unemployment benefit.

  1. The numbers of persons receiving unemployment benefit in Western Australia each month from September, 1959 to the end of July, 1960 - the latest figures available - were as follows: -

page 170

QUESTION

BERYLLIUM

Senator SCOTT:

asked the Minister for National Development, upon notice -

Is it the Government’s intention to stockpile again the ore of beryllium; if not, will the Government give consideration to allowing producers to export the ore?

Senator SPOONER:
LP

– I now answer the honorable Senator in the following terms: -

I refer the honorable senator to an announcement which my colleague, Senator Henty, made on 2 1st June, 1960, to the effect that the Australian Atomic Energy Commission has been authorized to continue stockpiling of beryl on a reduced scale during the financial year 1960-61. The export of beryl is now freely permitted to approved destinations, and the Atomic Energy Commission will make its purchases through normal commercial channels. Detailed arrangements for the commission’s purchases for 1960-61 have not yet been finalized, but it is expected that these will be announced shortly.

page 170

PERTH AIRPORT

Report of Public Works Committee

Senator O’BYRNE:

– I present the report of the Public Works Committee on the following subject: -

Civil Engineering Aerodrome Works at Perth Airport, Western Australia. 1 should like to advise the Senate that the location of the airport under consideration, at Guildford, is regarded as the best available site for an airport in Western Australia. It was first developed as an airport for interstate aircraft during the war. The committee has recommended that the engineering works submitted for its consideration be approved. It has examined several aspects such as the provision of car parking and the connexion of sewerage - which is not recommended because of the distance of the airport from the metropolitan system. The site itself is suitable. Prior to the employment of jet aircraft on international air routes, the airport at Perth was a fully-fledged international airport. The inadequacy of the runways for international jet operations has in fact degraded the Perth airport, with serious economic consequences for the State of Western Australia and the operators of international air services.

The need for adequate airport facilities in the development of trade with South-East Asia, the desirability of an alternative air route to the United Kingdom through Cocos Island and for an alternative airport on the route to Darwin, and the reasonable demand that Western Australia should not be handicapped in its commercial development by restriction to the facilities of a second-class international airport, impressed the committee very deeply indeed. The members of the committee believe that, commercially, the need to maintain piston-engined aircraft on a feeder service to Singapore is wasteful of aircraft time and necessitates the retention of those aircraft in service for longer than would otherwise be the case. It is estimated to cost one operator - Qantas Empire Airways Limited - £200,000 per annum more than if two Boeing services per week were routed through Perth instead of Darwin. All the indications are that jet travel has so captured the imagination of overseas travellers that operators of international air services have no alternative but to convert to jet aircraft.

For those reasons, Mr. President, the committee has agreed that there is a very sound case indeed for the development of Perth airport to international jet standards. The committee has recommended that the proposals submitted to it be accepted and that the runways should be extended and widened to make them suitable for international aircraft, thus restoring to the Perth airport the status that it previously had.

Ordered to be printed.

page 171

PRINTING COMMITTEE

Senator SCOTT:

– I present the second report of the Printing Committee.

Report - by leave - adopted.

page 171

CUSTOMS TARIFF BILL (No. 2) 1960

Second Reading

Debate resumed from 23rd August (vide page 163), on motion by Senator Henry -

That the bill be now read a second time.

Senator WADE:
Victoria

.- Before the Senate adjourned last night 1 had been making a plea for the speedy passage of the measures before the chamber to enable the Australian representatives at the conference of signatories to the General Agreement on Tariffs and Trade, to be held at Geneva next month, to state a case for Australia. As I have nothing further to add on that point, I shall now pass to a discussion of the Japanese trade treaty which has loomed so largely in the debate so far. It is true that the present treaty will expire shortly. I urge the Government to do everything possible to seek a renewal of the treaty, provided always that adequate safeguards are written into it. 1 think the history of the treaty over the last three years proves conclusively that proper safeguards were included in the current treaty.

The Leader of the Government in the Senate (Senator Spooner) told us yesterday that, despite expectations, only thirteen protests about the effect of the treaty were made by industry and that of those thirteen, only three were considered to be justified, and that in those three cases the objections were upheld by the advisory authority. That proves conclusively that the effect of the agreement has been widespread and most beneficial to the economy of Australia. I believe that the real worth of the treaty has not yet been fully appreciated. I take this opportunity, Sir, to warn that there is, even to-day, some loose thinking regarding the wisdom of renewing the treaty. One hears people say, “ Why should we enter into an agreement with Japan, which is a manufacturing nation?

Japan has a huge work force. She must buy our wool to employ her people. She must buy our grains to feed her people. She must consider buying our coal to stoke her furnaces.” 1 remind the Senate that Japan could buy her wool from a dozen different centres in the world 10-day, and that even three years ago, when the Minister for Trade (Mr. McEwen) negotiated the present agreement, he was well aware of that fact. 1 suggest that at least one clause that was written into the agreement and sponsored by him is a monument to his ingenuity and ability to negotiate on Australia’s behalf. The actual minutes of the treaty state that Japan accords Australian wool the opportunity of competing in the global quotas for wool for not less than 90 per cent, of the foreign exchange allocation for wool each year. This means that, under the treaty, Australia is assured of an opportunity to supply 90 per cent, of Japan’s wool requirements.

The net result of that clause in. the agreement is that to-day, as has been previously stated in this debate, Japan is Australia’s best customer for wool. But that in itself does not tell the whole story, because no person can really assess the value of Japanese competition to the Australian wool market. It has had the effect of stabilizing the wool market to some degree, and it has also had the effect of keeping prices higher than I am sure they would otherwise have been. Let me, by way of proof of my point, refer to the wool sales that commenced in Melbourne on Monday last. Reports issued at the conclusion of the first day’s sales indicated that the price of wool was down by from 5 per cent, to 7i per cent. The comment was made that Japan was not operating. It was not stated specifically, of course, that that was the reason for the fall in prices; but at least there was an indication that a reason could be found in the fact that Japan was not operating. On the very next day prices firmed and even rose for some specific lines. The comment then offered was that Japan was operating. These movements of the Australian wool market are some evidence that, over the last three years, the Japanese treaty has made a substantial contribution to our national economy.

I hope to have an opportunity before very long to discuss the selling of wool in Aus tralia. Any method than can be employed to remove daily fluctuations will be of very great service to the wool industry. It is a matter which we as responsible people must face. But 1 add this qualification: I believe the industry itself must determine whether it wants these matters to be examined and whether it seeks some alteration of the present system which permits fluctuations to occur to the detriment of the grower. If a similar clause could be written into agreements governing the sale of our wheat and coal, to name just two of the commodities we produce, what a stabilizing effect it would have on the industries concerned! Only to-day Senator DrakeBrockman asked what quantities of f.a.q. wheat had been sold to Japan prior to operation of the Japanese Trade Agreement. The Minister for National Development stated quite categorically that prior to the signing of the agreement some three years ago Japan had bought almost no f.a.q. wheat from us, and only very little hard wheat. The Minister further said that as each year passed Japan had taken more than the agreed quota of soft wheat. That is another indication of the real worth to Australia of the Japanese Trade Agreement.

In view of the facts I have referred to, I am amazed to hear honorable senators opposite denounce the Japanese Trade Agreement and the legislation now before us. Opposition senators must agree with the view that that agreement has been of immeasurable worth to Australia, and I am sure the time will come when they will realize that the legislation we are now considering has been of immeasurable worth to the industries which they profess to represent in this place. Surely they realize that the removal of import restrictions could open the door to a flood of imports from countries that are able to produce goods more cheaply than we can, with the result that not only Australian industry but also Australian workmen must suffer. But the Government is determined to prevent that.

While dealing with industries generally, I should like to offer some comments about our primary industries, some of which are vulnerable to imports from overseas. Over the last ten years the Government, as a result of wise administration, has succeeded in building into our economy to the highest level that the consuming public can pay home-consumption prices for certain commodities. In many instances those prices are higher than the corresponding prices paid in other producing countries. I know, of course, that we have certain safeguards to prevent the entry of some commodities. Let me refer to the tobacco industry. We import 75 per cent, of the tobacco that is used in the Australian manufactured article. In the ten years under review that industry has really got onto its feet. It is worth so much to us in terms of preserving our overseas credits and of employment that it must be jealously guarded.

I remind the Senate, too, that there are some very brave people in Australia who are experimenting quite successfully with the growing of cotton. I refer particularly to the Robinvale area where a cotton growing experiment, which promises to develop into an excellent industry, is being conducted. Who would say that the time may not come when that industry almost overnight must receive the protection to which it is entitled? I am informed that the quality of the cotton produced in the Robinvale area, and other areas, is in world class. By doing all we can to reduce the volume of our imports we are making a great contribution to our national economy.

The vegetable oil industry, which is threatened by imports from overseas, also has been considered by us from time to time. Even the humble onion grower, as someone has described him, has a stake in this legislation. It may be argued that the onion industry is of no great significance, but I do not agree with that viewpoint. Victoria alone produces approximately 23,000 tons of onions a year. Within recent months the Onion Board, which controls the organization of this industry and the marketing of its product, has been faced with the problem of competing with imports from other countries. Onions are a perishable foodstuff, and as a nation we cannot afford, because of excess stocks arriving from overseas, to have our product in other than a marketable state when required. The need to help the onion industry is another factor which justifies the legislation we are now considering.

It is interesting to recall, Mr. Deputy President, that when the Senate met last week honorable senators opposite offered a lot of criticism about the pea industry.

The Government was criticized for not having taken certain action to protect the industry. But since the introduction of this legislation I have not heard a word from Opposition senators about the pea industry. I would be grateful if some honorable senator were to reconcile the offering of criticism last week with the silence that now prevails.

I make a plea to the Government to go even further with its Tariff Board legislation. I urge it to consider the setting up, within the Tariff Board structure, of a section whose efforts would be devoted solely to watching the interests of primary industries. Secondary industries are well able to prepare and present their cases to the Tariff Board when their interests are involved, but I suggest that the primary industries do not enjoy the same facilities. I believe that the only solution to this problem would be to have within the Tariff Board structure a section which, backed up by a statistical bureau of well-trained officers, could deal with all matters relating to the costs of primary industry. Primary producers constitute the only section of the community that is not profitably and soundly based, and there is not much they can do about it. The primary producer is urged to reduce his costs, but there is very little he can do on that score.

Senator Pearson:

– He can do nothing.

Senator WADE:

– I shall go so far as to agree with the honorable senator when he says the primary producer can do nothing about it.

Senator Mattner:

– I would not say that.

Senator WADE:

– Well, no one would ever suggest that the primary producer has not given the utmost of his physical strength. I suggest that that is about the only facet of the industry that he controls.

Senator Cameron:

– What about bis mental strength?

Senator WADE:

– His mental strength has long since been established to be comparable with his physical strength.

Senator Ridley:

– What about his voting strength?

Senator WADE:

– Obviously, his voting strength has been very wisely used. Therefore, because the costs which are out of his control are so vital to his existence as a producer and to Australia as a nation,

I suggest that such a section within the Tariff Board structure would be of real value to our primary industries and to Australia as a whole. I believe that the primary producer is suffering hardship because credit facilities are not readily available to him. To-day, financial institutions which are in a position to lend money demand from the borrower a guarantee that he can operate profitably, and that his loan returns 5, 6, 7 or 8 per cent., as the case may be. Who would be brave enough to forecast the margin of profit of the primary producer to-day? I believe that most people are inclined to think that if he is breaking even he is doing very well. The Government should give urgent consideration to this problem of making credit readily available to the primary producer and thus enable him to operate profitably, and give him an incentive to expand and develop his industry.

Australia has a great future, provided both its secondary and its primary industries are on a sound basis. I am sure this legislation will greatly contribute to the economic stability of the nation.

Senator LILLICO:
Tasmania

– I was very interested to hear what Senator Wade said about the necessity for protecting primary industries in this country. He covered just about the whole field of primary production. He spoke about the economic condition of our primary industries and1 of the need for them, as well as secondary industries, to be protected on their own local market. It would have seemed strange to me if, in the course of his remarks, Senator Wade had not mentioned the subject of frozen peas, because I can assure the Senate that over the past few weeks the people of Tasmania have heard and seen quite a lot of publicity in relation to this subject of protection for primary producers. Headlines in the Tasmanian press have castigated the Commonwealth Government because it would not give adequate protection to our primary industries. These measures envisage that a matter having been referred to one of the deputy chairmen his report shall be in the hands of the Government within 30 days.

One Labour politician in Tasmania was s.o incensed about the importation of American quick-frozen peas that he sent an ultimatum to the Prime Minister, and also to the Minister for Primary Industry (Mr. McMahon) and the Minister for Trade (Mr. McEwen), saying that unless the Commonwealth Government guaranteed protection within three days - I think that was the deadline - plans for the establishment of a potato processing factory at Ulverstone which is expected to cost £750,000 and a quick-frozen pea-canning plant in the same locality which is estimated to cost £250,000 would not be proceeded with. A tremendous amount of party political capital was made out of the allegation that the Commonwealth Government was holding the Tasmanian primary producers up to ransom because it would not give them protection on the Australian market. As far as I am aware, that ultimatum was not acceded to by this Government, but a statement has since been published that both factories - at least one of them, but I think both of them - are to be established in spite of the fact that the Government has not yielded to the ultimatum that was delivered to it. In my opinion these measures provide the complete answer to the criticism which has been so rampant over the past few weeks, at least in Tasmania.

It seemed to me that Senator McKenna was most mild in his criticism of these measures. Unlike his colleagues in another place, he did not advocate the retention of import licensing as a means of protecting the industries of this country and of preventing a flood of imported goods to the detriment of Australian producers. However, he did say, probably quite rightly, that because of the long period during which the import licensing system was in operation it came to be regarded as a means of protection of Australian industries and was looked upon as a means of protection against the dumping of goods from cheap-labour countries. If we can judge from statements that appeared in the press, some people who are interested in the importation of goods into Australia have severely criticized the Commonwealth Government for removing import restrictions. They say that industries have suffered as a consequence. As one who has not had a lot to do with import licensing, it seems to me that it would be almost impossible to envisage a more, cumbersome and, may be, a more unfair and difficult system to administer than the import licensing system. This may be said about it: It differs from the system envisaged by these measures which are now before the Senate in that the decisions arrived at by the deputy chairmen must be re-examined by the Tariff Board itself, and the report of the Tariff Board must come before the Parliament, whereas only in the very slightest degree could Parliament be said to have had any control over the import licensing system.

Speaking about the use of import licensing as a means of protection for Australian industries, the Minister for Trade, who administered the system, said -

There are thousands of importers of piece goods into Australia. . . . Does the Labour Party propose that import licensing should be used to protect Australian industry on the basis of “ first in, best served “ - that whoever first lands 8,000,000 yards of rayon in this country gets priority whilst the unfortunate who has his consignment at sea, paid for and perhaps has even sold his rayon before the axe falls, is to be shut out and not even allowed a chance to sell and recover his investment?

That statement came from Mr. McEwen, who was in charge of import licensing for most of the time that it was in operation. It would appear that import licensing was the most unfair method that could possibly be envisaged of trying to protect Australian industry. I have no hesitation whatever in saying that the method proposed by the bill is infinitely preferable, in view of the condition of affairs that existed over the past eight years.

The Minister for Customs and Excise (Senator Henty), in introducing the bill, said that it was proposed to use a panel system in arriving at decisions. There will be a panel of persons engaged in secondary industry and a panel of commercial men, to which the investigator may refer for relevant information that will help him to make a decision. I could not help thinking that it would be admirable if there were a panel of representatives of primary producing interests, to which the Tariff Board could refer on all subjects, not only in respect of applications for protection for secondary industries, but in respect of applications for protection for all other industries.

As a primary producer, I have looked askance at Australia’s tariff policy. It has been said often - and it certainly will not do any harm to say it again - that although the primary producer is compelled to buy his requirements on a market that is inflated by reason of this tariff policy, he is, except in regard to a few products that are the subject of stabilization schemes, compelled to sell his products on the markets of the world and be governed by world parity. In other words, he has to take what he can get for what he produces. It has been said that he receives a benefit from the tariff policy in that it has fostered secondary industries in Australia and has built up a large industrial population, so providing him with an excellent local market. But that local market is not much good to him unless he receives protection in the same measure as the manufacturer. What is sauce for the goose is sauce for the gander. If this tariff policy is to continue - as far as I can see, there is little hope of breaking away from it - the primary producer should, where feasible, have just the same protection as the manufacturer on the local market.

There are people in this country who seem to think that the Commonwealth Government should prevent the importation of goods that can be manufactured here. With the world in its present condition, I believe that such a policy is almost impossible. I was very interested to read in a New Zealand paper, within the last fortnight, that a member of the Opposition in New Zealand, where Labour is in power, spoke in the Parliament with his desk piled with imported foodstuffs. I was surprised to see listed amongst those imported foodstuffs a tin of Australian cream. That seemed to me to be so extraordinary that I wondered whether it really was the cream that one normally gets from a cow. New Zealand produces a superabundance of foodstuffs. It is probably the greatest dairying country in the world. The New Zealand member wanted to know why, in a land of such abundance, devoted to primary production, the Government should be allowing the importation of foodstuffs that could be produced there. The New Zealand Minister, in replying, said that these were little more than token importations, made in order to allow New Zealand to trade with the rest of the world.

Does not that make us think of the Japanese Trade Agreement? We are dependent upon exports and trade. We have been told that we must increase our exports tremendously over the next few years if we are to progress. In those circumstances, it would be well nigh impossible to apply what would be, in effect, an embargo against the importation of anything that we can produce here. We cannot do that, because we must trade with the rest of the world.

I believe that the Tariff Board has well merited the confidence of the Parliament and of the Australian public, but I have always had, in relation to tariffs, the uneasy feeling that some manufacturers here have taken advantage of them to develop a degree of irresponsibility, because they feel that they can go to the Tariff Board and, if they establish that their costs are such that they cannot compete with imported articles, the board will accede to their request for increased protection.

Senator Courtice:

– Not unless their costs are genuine costs.

Senator LILLICO:

– It is very hard to adjudicate on something like that. I took particular note of what the Tariff Board said in its report about frozen peas, lt was apparent that a complete and thorough investigation of the position had been made. The board said that the expenses of some processors were 50 per cent, greater than those of other processors. A reason can probably be found for this state of affairs. Possibly some processors are not as efficient as others.

In my opinion, the Tariff Board has a very important function to perform. It must attempt to hold the scales fairly and evenly between the Australian-produced article and the imported article but, I take it, with a degree of preference towards Australian producers. I have not had much experience in these matters, but I should imagine that this is a difficult and responsible function that the board performs. I have heard it said that the operations of the board develop in Australian producers a degree of irresponsibility so far as costs are concerned because they know that if they can present a good case to the board, they will receive a degree of protection.

In reading the board’s comments on the pea processing industry in Australia I was surprised to learn that the annual per capita consumption of frozen peas in Australia is only 1.3 lb., whereas in the United States it is 6.62 lb. and in New Zealand it is 6 lb. The board lists a number of reasons for this difference in consumption. Nevertheless, it appears that ample scope exists in this country for an increase in the production of quick-frozen peas or canned peas, whichever are the most popular. The trouble in the pea industry has arisen, according to people engaged in the industry, because last season’s crop was sold out in August for the first time in many years. This was brought about by the demand for quick-frozen peas in this country. The Australian crop having been sold out by August, there was a shortage of supplies, and quick-frozen peas were imported from the United States. Those imports have given rise to outcries in the Tasmanian press. I have no doubt that if Australians increase their consumption of quick-frozen peas, the industry in this country can be expanded to catch up with the lag in production. If protection is necessary for the industry, this measure can provide it. This measure provides a complete answer to State and Federal politicians who have almost broken their necks in their efforts to jump on the band-wagon and obtain every ounce of publicity possible out of the situation.

Senator McKenna said that because the United States, Great Britain and Canada used a certain method to protect their industries it did not necessarily mean that the principle contained in this measure was right. There is something to be said for that argument, but there is also something to be said for the contention that if three of the world’s greatest democracies adopt a certain procedure it must have a lot to commend it.

I support the bill. I believe that it is the logical answer to any threat of dumping of cheap goods on the Australian market. The Government is to be commended for bringing down this legislation and in my opinion import licensing should have been abolished long before now.

Senator WRIGHT:
Tasmania

.- Following the speech so ably delivered by Senator Lillico, anything that I say must be superfluous, but as there seems to be little support from the Opposition for Senator McKenna’s arguments with regard to these bills, I feel that it may be of some interest to the Senate to discuss them further. The measures are interesting because they reveal how the tariff operates at present. They are also interesting from the point of view raised by Senator McKenna - their consistency with the constitutional practices that are acceptable to us.

I regard the three bills under discussion as extending the mechanisms that are to be employed in tariff-making in Australia. The situation with which the bills deal was referred to by the Minister for Customs and Excise (Senator Henty) when he introduced them into the Senate. The position is that last December the Government reached a politically courageous and nationally beneficial decision to abolish the unpalatable system of import licensing, This has inevitably led to an increase of imports. I think the White Paper reveals that, after the lifting of import restrictions, the value of imports into this country will increase by £100,000,000 or £150,000,000 a year. Undoubtedly, the ready availability to the Australian public of that extra quantity of goods will have a strengthening effect on our economy.

The next matter which provides a context for this measure is the fact, as we have been told by Mr. McEwen, that a general rediscussion of the General Agreement on Tariffs and Trade is to occur towards the end of the year. Obviously, it is prudent to have the internal mechanisms of tariffmaking put in proper order to enable Mr. McEwen to have a definite and purposeful objective - as I have no doubt he has - when he goes to that world conference. The third matter is that the Japanese trade treaty, I believe, has expired, and is now either about to be re-negotiated or is, in fact, being re-negotiated. Reading as one does the statement of the appraisal of the net advantage of that agreement to Australian trade and to Pacific relations, and the statement of the Minister for Trade that on constitutional grounds the present conditions of our tariff system requires review, we would be taking a very grave responsibility if we were to deny the opportunity for such a review. Having regard to the importance of the Australian tariff system to our economy, as both Senator Lillico and Senator Wade have forcibly pointed out, it is a matter of great interest to me to examine this measure.

Having read the debate that occurred at the time of the establishment of the Tariff Board, I recall to honorable senators the pros and cons that were put forward in 1921 for the establishment of such a board as part of the mechanism of tariff-making in Australia. If one looks at the debates on customs tariffs before that date one will see that frequently much discussion took place on whether there should be an increase of one farthing or one half-penny on barbed wire and whether there should be an increase of 5d. or 6d. on motor car accessories. In 1921, Sir Walter Massy Greene proposed the establishment of an independent, experienced, tariff board which would sit in public and examine facts of a confidential nature relating to industry. The establishment of the board gave everybody engaged in industry the assurance that arguments could be advanced openly in public before that independent board before any change of duty was recommended by the board to the Government. The proposal was not accepted by Parliament by an overwhelming majority, but the board has operated from that time until now, and, in the well-chosen language of Senator Lillico, it well deserves the confidence of the Australian Government and the people for its 30 years of effort.

We accept the Tariff Board reports, and in matters which interest us we examine individual reports on any proposal for an increase of duty. We also await with interest year by year the annual reports of the board. Over the last few years when the fluctuations in the economy have been almost frightening the Tariff Board has provided an economic review of very great value to the nation. Some three years ago T was concerned when the personnel of the Tariff Board was duplicated, and on one occasion I expressed the thought that the board might be making a double-fisted approach to its problems. I myself get no excitement, except to my apprehension, when the board uses, as it were, both fists, to develop a tariff that becomes excessive, having regard to the need to keep our costs of production on a basis which will still enable our exporting industries to earn for us the money that is needed to bring the raw materials which national survival demands we import each year. Excessive tariffs can be a terrific fomenter of inflated costs. There is a great responsibility cast on the board and on this Parliament to watch the increases of duties lest, in our eagerness to protect the employment opportunities provided by the protected industries in Australia against unfair competition, we innate our costs of production and disadvantage the exporting industries, particularly the primary industries, to a degree where they are weakened and cannot continue. 1 have pleaded before, and I take this opportunity to express my keen desire again, for a review of our tariff system. We have not had a general review of the impact that the tariff is making on the Australian economy since 1931 when Professor Copland and others conducted such a review. 1 did receive slight encouragement from Senator Spooner about three years ago when he said that a comprehensive review was being considered. I hope that our tariff system will be the subject of such an examination as that which resulted in the report on decimal currency that was tabled in this chamber this afternoon. If six or seven experts - purposeful, independent people - could examine the impact made by tariffs on the general economy over the last 30 years, I think their report would be of great value to the country and to Parliament.

It is true that our primary industries are at a very great disadvantage as a result of imprudent tariffs. I have argued in this place - 1 am glad that the need to do so no longer exists - that the system of import restrictions was creating a third wall of protection to our secondary industries, and insofar as the cost of their products necessary to be purchased by farming industries were increased, it was quite obvious that the farming industries were being disadvantaged. The White Paper attached to the present Budget disclosures that in 1953 wages and salaries earned by the community amounted to £2,200,000,000 and that for the present year the figure is £3,300,000,000, an increase of 50 per cent, over that period. In that paper we see that the comparable figures of farm income are. for the year 1953-54, £499,000,000, and for this year £466,000,000, a slight decrease after fluctuations in the interval. Whereas the salaries and wages of the community have increased by 50 per cent, in that bracket - I take that bracket simply because it is in the White Paper published this year - farm incomes have suffered a slight decline. The challenge that that constitutes cannot be ignored by any one in this chamber. .

I have a feeling of real satisfaction thai the sagacity of the Minister for Trade (Mr. McEwen) can be expressed in the Parliament, in a measure designed to make our internal machinery for tariff-making appropriate to what he has in mind in connexion with the general review of tariffs and trade and the re-negotiation of the Japanese trade treaty. He sees the necessity for the fairly speedy exercise of an authority to mould the tariff of Australia so as to ensure that by no sudden importation shall an Australian industry be seriously or irretrievably damaged. There are some who have harked back to the system of import licensing and said “ Well, it was a mistake to abandon that”. Not only in speeches by members of the Labour Party, but also in many of the manufacturers’ journals over the last three years, you could note the glowing affection for the continuance of import restrictions, because manufacturers were using the system as a third wall of protection. What more iniquitous system for that purpose could be used by any democracy? I submit that that system should be used only for the shortest periods, and then only to meet the most critical emergencies.

What was needed by way of parliamentary authority for import licensing? There had to be only one submission of the original regulations to the Parliament, and the only opportunity that the Parliament had to act in relation to those regulations was to move for their disallowance during the next fifteen sitting days in either House. I recall that the Regulations and Ordinances Committee took the objective view that import licensing was discriminatory in its nature and against the best traditions of the Parliament, and moved for the disallowance of the regulations. Out of the contention that was so developed, a system of appeals was evolved. It did not add very much by way of improvement, but at least it created an atmosphere for agreement that final arbitrariness should not rest on the desk of one official, giving different decisions in different places in the country. When we recall that under the import licensing system no report was ever laid on the table of the Parliament, and that no reason which prompted the Minister to adjust the level of imports year by year was ever given in a parliamentary paper, we can accept the system enunciated in these measures as a tremendous advance and improvement upon that system. 1 find myself completely unable to accept Senator McKenna’s submission that the procedures expressed in these measures are inconsistent with our functions under the Constitution. First, the new system will displace the system of import restrictions, with advantage. Secondly, if Senator McKenna will re-peruse legislation that has been in operation since 1921 - the Customs Tariff (Industries Preservation) Act - he will find that the Minister has, in no less than a dozen cases, power to impose - sometimes on the basis of a Tariff Board report and sometimes without it - an emergency duty by inserting a notice in the “ Gazette “. So far as 1 am aware at the moment, there is no specific parliamentary machinery for the disallowance or review of such a proclamation. Take the case of a dumping duty, referred to in Section 4. If the Minister is satisfied that goods exported to Australia have been or are being sold to an importer at a price which is less than the fair market value, he may publish a notice in the “ Gazette “ and charge a dumping duty.

Then we come to section 4a, upon which we had, I think, a quite interesting debate in 1957. It was a provision that Mr. McEwen submitted to us then in anticipation of the original Japanese trade treaty. We gave him than the fair market value of the goods manufactured in a particular country had been sold to an importer at a value less than the fair market value of the goods at the time, to publish a notice in the “ Gazette “ specifying the goods. We agreed that, following that publication, there should be charged, levied and collected a special duty called the third country dumping duty. In the various sections there are specified no less than a dozen cases in which the Minister, by executive action, as I read the legislation, may actually impose an emergency duty.

Mr. Pollard, who led for the Opposition in the Lower House on these bills, recalled the fight between the Executive and Parliament in the early 17th century. He made reference to the fight by Parliament to be the sole custodian of taxation. I feel that those who advance that argument now forget that you cannot make a customs proposal to the Parliament and pass it to the Governor-General’s house for enactment overnight. It is of the very essence of parliamentary procedure that time must elapse between the initiation of a proposal and the approval of it. With customs duties, it is essential, once the Government proposes to increase a duty, to see that no unfair advantage is taken of the period of debate, and that the higher duties shall commence to be collected on the day of the Government’s proposal. 1 have a quotation from a statement by no less an authority on constitutional law than the late Sir Samuel Griffith, the first Chief Justice of the High Court of Australia. In the first year in which the High Court sat - 1904 - he referred to the practice of the Executive collecting customs duties as from the date upon which the Government proposed them, even though the act were not passed until some subsequent date, as being “ in accordance with a very old and well known constitutional usage “. Any one who has read works on this subject will know that after a celebrated decision in England in 1913, in a case in which a taxpayer had taken advantage of that particular period, the English dividend tax or income tax legislation was amended to include a provision whereby Parliament would have four months in which to ratify the proposal of the Government. If the proposal were enacted within that time, collection would be valid as from the date of commencement of the Government’s proposal.

I am informed, and have partially verified, that since 1901 we have had in our customs legislation a provision whereby the Executive is authorized to continue to collect duty as from the date of the Government announcement, provided that the proposal to collect the increased duty is ratified by Parliament - not merely by one House, but by both the House of Representatives and the Senate - before the end of the next session, or within six months after the date of the Government proposal, whichever is the later.

With that degree of experience in relation to customs duty behind us, we are asked to agree to a proposal that if the Minister thinks there is a case of urgent challenge to an Australian industry which may appropriately be remedied by revision of the tariff, he may send a request to the Tariff Board, lt will be the duty of the board to depute a deputy chairman to examine the proposal and to furnish a report in writing. If that independent summary report contains a recommendation that there should be an increase of duty to hold the position, the Minister may publish a notice in the “ Gazette “. As from the date of that notice he may take action for the purpose of collecting the duty at a rate not exceeding the rate recommended. Then, if Parliament is sitting, he is bound, on the same date, to place a copy of the relevant report on the table, not only of the House of Representatives, but also, I am glad to note, of the Senate. If the chambers are not sitting, he is bound to do that within seven days of their first sitting. Then, as I understand it, the matter immediately becomes a tariff proposal and goes into the machinery already operating for the ordinary fixing of tariff duties. That means that the duty can continue to operate for no longer than the end of that session o the Parliament, or for six months, whichever is the longer, unless both Houses of Parliament have ratified the increased temporary duty. “The only extension involved in this procedure is the proposal to give the Minister the right to publish the notice in the “ Gazette “ before the actual commencement of the sittings of the Parliament. I should experience a feeling of great irresponsibility if I were to refuse such authority to the Minister for Trade. He is obliged to use the authority only when he thinks an urgent challenge has to be met. I am sufficiently objective to take the view that the authority will extend not merely to the Minister for Trade at present in office - whose robustness of judgment and, as far as I can judge, sagacity in trade negotiation, are pre-eminent - but also to his successors. At some indefinite date, a long time hereafter, his successor may be of a different political colour. When I examine the mechanism of this procedure, I visualize it in the hands of such a successor.

Having stated the position against a background of constitutional experience in relation to customs duties, I think I may say that the procedures contemplated by the bill will completely protect concepts of which, I think the whole Senate will do me the credit to acknowledge, I am always most jealous. I think that Parliament would be irresponsible in the extreme if it failed to recognize that in any procedure involving consideration by an assembly, delay is necessary. Therefore, it has always been acknowledged, as an inevitable part of customs procedure, that although delay must occur in the parliamentary procedure, the Executive may take’ appropriate action, supervised vigilantly by Parliament when it meets. I, therefore, am eager to support the proposed legislation.

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

– in reply - I thank the Senate for its reception of the measures before us. We have had a most interesting debate which has extended over almost two sitting days. Many points of extreme interest have emerged, and the debate has covered the subject very well. I thank Senator Wright for his contribution. He has saved me a great deal of work. I think we all would agree that, from the constitutional point of view, if legislation passes his scrutiny it must be all right. As always, I listened with intense interest to what Senator McKenna had to say, but as time went on I began to realize that the case he was presenting was terribly weak. In fact, I thought it descended almost to a mere quibble. I noted, incidentally, that he discarded a great deal of the argument which the honorable member for Lalor (Mr. Pollard), who led for the Opposition in the House of Representatives, had used. For instance, the argument regarding quantitative restrictions and resort to import licensing was discarded.

The only point of difference left between us seems to be Senator McKenna’s contention that the proposal will make it possible for a temporary emergency duty to be gazetted while Parliament is not meeting. I suggest that, at the most, the period when Parliament was not meeting would be eight or ten weeks. Yet, for some years it has been the practice, without one word of protest from the Opposition, for proposals to impose higher rates of duty to lie on the table for four, five or six months. The moneys have been collected, even though the proposal has not been passed by the Parliament. But not a word of criticism has been offered! That practice has been followed by governments for many years, irrespective of their political colour. I believe the Opposition has made a grievous blunder in opposing the holding action proposed in these measures. This legislation will enable any government that happens to be in office to take urgent steps to see that an industry which is threatened is afforded temporary protection until the Tariff Board has an opportunity to make a proper investigation and report to the Parliament.

The Parliament will have full control over the operation of this legislation. It is a static mind that does not accept the situation that we are living in a changing world. When the tariff system was first evolved, probably six months elapsed while goods were being delivered by sailing ships from overseas. But to-day goods can be flown to Australia by air freighter in a very short space of time. After an order is placed and the necessary banking arrangements are made, probably no more than four, five or six weeks elapse. Such changes call for changes in our tariff procedure.

I am amazed to find that the Labour Party is opposing this legislation, because it provides for the giving of speedy protection to secondary industry and primary industry. I feel really sorry for Labour representatives who chose the time that was selected to start the campaign that has recently been waged in Tasmania. Only within ten days of the introduction of this legislation, which has been under consideration for three or four months, Opposition senators started a great campaign in Tasmania in the course of which they stated that the Federal Government was not interested in protecting secondary industry or rural industry. A great amount of press publicity was given to the campaign and intimidatory telegrams were sent to the Government by the honorable member for Braddon (Mr. Davies) stating that within three and a half days it would have to give some protection to the canning industry. A lot of infantile nonsense was indulged in. The Government believed this legislation to be so important that it was introduced before the presentation of the Budget. These measures reveal that the Government realizes we live in a changing world and that it has a mind which can adjust itself realistically to changing circumstances.

Embodied in the legislation are a couple of principles which I believe we all should remember. The proposals now before us retain .the fundamental principle that no tariff can be altered permanently without a public hearing by the Tariff Board and subsequent legislation being passed by the Parliament. There is no place in the proposed procedure for party political pressure. Another principle embodied in the legislation is that an industry, not an individual company, must provide the factual evidence of an immediate threat. There again the possibility of political pressure by one company within an industry is removed. They are great principles.

I listened with great interest to Senator Wade, and I hold very much the same view as he holds about the approach of primary industry to the Tariff Board. I point out to the honorable senator that two members of the board come from primary industry. Nevertheless, I believe there is a need for the great Australian primary industries to establish a small secretariat to amass the statistics and information necessary for the presentation of a factual case to the Tariff Board. A very small contribution from all the primary industries would enable the setting up of a small secretariat, including a statistician and research officer. The establishment of such a secretariat would be of the utmost value to the Tariff Board when examining the evidence placed before it and when preparing its report to the Parliament.

I direct the attention of Tasmanian senators to a letter that was received by all of us, I think, from the Hobart Trades Hall Council. That letter contained a resolution passed by the council at a meeting on Thursday, 11th August. The third paragraph of the resolution reads -

The council calls upon all Tasmanian Federal members, the Australian Council of Trades Unions, and the State Labour Government to take this matter up with the Federal Government on an urgent and essential basis for the preservation of the canning industry of Tasmania and Australia.

Reference was made also to imports of peas into Tasmania. I note that the letter was signed by A. G. Poke as secretary of the Trades Hall Council. I thought it would be a rather interesting exercise to see what the secretary, Mr. A. G. Poke, would say of the action of Senator Poke - they being one and the same person - when he voted against the legislation that the Trades Hall Council called upon the Government to introduce. It is a very interesting situation. I believe I have a duty to answer this letter personally, and I hope my answer reaches the Hobart Trades Hall Council. I should like to be a fly on the wall at the council meeting and see how they understand the action of a senator who votes against legislation which carries out a resolution which he, as secretary of that council, has forwarded to me, asking that the Government give effect to it. But that is only by the way.

I conclude by thanking the Senate for the very interesting debate that has taken place on these measures. I believe the legislation is among the best legislation I have had the pleasure of introducing into this chamber on behalf of the Minister for Trade. I am sure that those who do not support this legislation, on reflection will realize that they have made a grievous error and, if it is not carried, that they have dealt a grievous blow to Australia’s secondary and primary industries and all those people who work in them.

Question resolved in the affirmative.

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

page 182

TARIFF BOARD BILL 1960

Second Reading

Consideration resumed from 23rd August (vide page 135), on motion by Senator Henty -

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.

page 182

CUSTOMS BILL 1960

Second Reading

Consideration resumed from 23rd August (vide page 135), on motion by Senator Henty-

That the bill be now read a second time.

Question put.

The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)

AYES: 32

NOES: 24

Majority . . 8

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I made it very clear at an earlier stage of the debate on these three bills that the Opposition would record its objection to the one principle to which we took exception, by voting against the second reading of this measure. I made it also very clear that the Opposition to this bill applied to the same point in the Tariff Board Bill, which went through ahead of this bill without opposition by division and vote.

Senator Henty:

– This covers the two?

Senator McKENNA:

– This covers the one principle in both bills. There is no doubt about the attitude of the Opposition to both bills. There equally can be, I should think, no doubt as to the clear ground upon which the Opposition bases its objection to the measures. That is the one point that a tax can be imposed, in effect, by an individual, after an admittedly inadequate inquiry, on a recommendation to the Minister. The only limitation on the Minister is that he may not exceed the amount recommended by the one officer, who is a deputy chairman of the Tariff Board, lt is made not after a normal inquiry by the Tariff Board but to meet an emergency.

We concede the need for speed but we are not prepared to discard the principle of responsibility of the Parliament to fix a duty. I think everybody has conceded that this is of vast consequence to many classes in the community - importers, exporters and manufacturers - to the community generally, and to aspects of Government revenue, lt is not a light matter. We stand for a very firm parliamentary principle, and its amazes me to hear the Minister refer to a stand of that nature as a quibble. In truth, it is the upholding of the authority of Parliament, and Parliament alone, to tax. The Australian Labour Party looks upon it as a great principle. We affirm the need for streamlining all the procedures, and I want it to be understood that we do. We take our stand on one point.

This bill is even worse than the Tariff Board Bill that provides for emergency procedures, because this bill imports the same type of extra-parliamentary authority to put a tax into operation, and to put it into operation not in the Parliament but outside it in a case where there is no emergency. It is not an emergency bill. This will apply to any normal tariff procedure that comes under purview during c recess. This opens up the whole question of Tariff Board procedure. In the normal course of events Tariff Board reports are submitted to the Minister. Without waiting for the Parliament he will be able to make his pronouncement. No emergency of the type we have been debating and considering need arise in relation to this measure.

Senator Wright:

– Where do you get the distinction, and who decides what is and what is not an emergency?

Senator McKENNA:

– The Minister will decide what is an emergency. Only the

Minister can, in a case of emergency determined by him, refer a matter to a deputy chairman of the board.

Senator Wright:

– Only in a case of urgency.

Senator McKENNA:

– Yes.

Senator Wright:

– What is the distinction between a case of urgency and an emergency?

Senator McKENNA:

– 1 do not care whether the term is urgency “ or “ emergency “. I use the two terms synonymously. I am referring to a situation that I think the honorable senator should understand. In a case not of urgency or emergency when, after a normal hearing of the Tariff Board in the normal way, a report is available to the Minister and the Parliament is not sitting, the Minister will fix a duty outside the Parliament, and it will become operative forthwith. There will be no case of extreme urgency or of irreparable damage to an industry. I concede that there may be a case of inconvenience. The principle that the Parliament itself should impose the tax and that the tax should be imposed in the Parliament is to be discarded. Whilst one can argue for it in a case of emergency, it is much more difficult to argue for it in a case where there is no emergency or urgency. That is the reason why the Opposition has reserved its vote to protest against the new principle for which the Government contends in this bill. It is a bill in relation to the operation of which the existence of an emergency is not provided for. It applies to the normal run of tariff matters. The procedure will be implemented by publication of a notice in the “ Gazette “ by the Minister. The proposals will be filed within seven days after the Parliament meets.

That is the first point. I want to make it well understood by the committee where we take our stand. It is on that one point, and for the reason I have given. I was invited to cast my mind back to the Customs Tariff (Industries Preservation) Act. During the second-reading debate, I traversed most of the sections of that act. Many of them have stood for a long time and several were introduced in 1956 and 1957. The great point of difference that the Opposition sees between what is in that act and what is in the bill that we are now considering is that although in the act the Parliament did not name a specific sum as the duty, because it was not determinable, the Parliament provided it with a great deal of particularity in most cases. I refer particularly to the provisions relating to subsidies that were inserted in 1957, namely sections 11b and 11c. Where exporting countries subsidized the manufacture or despatch of goods, the freight, or any matter connected with them, and where their importation could be to the detriment of Australian industry or could adversely affect the imports of a third country in our market, the Parliament said very plainly that the duty would be the amount of the subsidy. In the very cases that were cited to me a little while ago, one will find a formula in sections 4, 4a and 5a. In order to follow the matter through, one must refer sometimes to the definition section. The only element of discretion left by the Parliament in the Minister is when evidence of some ingredients of the formula is not available.

I suggest very strongly that in all the cases that I have mentioned the Parliament has taken extreme pains to determine the duty. The Parliament cannot fix an amount, so it has gone to great pains to say how the amount shall be ascertained. The big point of difference is that under this measure the mind that will fix the amount of duty will be an official mind - the mind of one official only. He will be given no indication by this Parliament of the amount that should be fixed. I realize that that could not be done, because he would be acting in a sudden and unforeseen emergency. But in the Customs Tariff (Industries Preservation) Act, the Parliament set down complete formulas. Under this bill, action rests on the views of one man, following an inquiry. It is conceded by the Government that normally evidence and examination in an inquiry would take six or seven months, but this lone individual will be asked to make his inquiry in 30 days, and it has been admitted that he may even be urged to do it in a shorter time. It will be a rushed matter. This Parliament will have no hand in fixing the duty. It could not have a hand under the circumstances, and that is why we think that this matter should have its beginnings in the Parliament. There is a big point of distinction between the cases that were cited and the cases that we are considering here.

The Opposition was invited by Senator Cole, Senator Wade and Senator Henty to say something about frozen green peas, about which there was a good deal of publicity in Tasmania. I should have thought that the frozen green peas industry was of importance, not only to Tasmania, but also to Victoria. I am well aware of the large number of primary producers and factory workers engaged in the industry and of the support that the industry gives to ancillary industries. I would regard the industry as being a very worth-while Australian industry, to use a term that we discussed yesterday. I would have been content to accept from the Minister for Trade (Mr. McEwen) that an industry was a worthwhile Australian industry. If he had said that a certain industry was a worth-while Australian industry, that would have been acceptable to me. But I invite those who have been talking about this matter to note the scorn with which the Minister for Trade treated the suggestion that the Parliament should be called together to deal with the plight of the frozen green peas industry. He was so scornful of the suggestion that I now doubt whether my interpretation of a worth-while Australian industry coincides with the interpretations of the Minister for Trade and his representative in this place. The industry is an important and vital one -

Senator Wade:

– The Minister for Trade did not deny that.

Senator McKENNA:

– He scorned the idea that it would be worth while calling the Parliament back to deal with the emergency plight of such an industry. I assert that the industry is worth while.

Senator Wade:

– The Minister would agree entirely.

Senator McKENNA:

– I would hope so, but I would not expect him to scorn the Opposition’s proposal to call the Parliament together to consider a grave emergency confronting that particular industry.

Senator Cole:

– The complaints did not emanate from the industry as a whole. They came from one factory only.

Senator Henty:

– That was my point. We do not listen to factories; we listen to industries.

Senator McKENNA:

– I appreciate that, and 1 agree that the Government does not deal with a particular factory or unit in an industry. It must deal with the whole industry.

I should like to refer specifically to the provisions of this legislation. I notice that in proposed new section 273ea, which is inserted by clause 4 of the Customs Bill, no reference is made to a requirement that the Minister must have in his hands a Tariff Board report before promulgating any notice. Is there some other provision in the bill that requires him to have that report? If there is, I should like to know about it, because the proposed new section does not lay down that requirement.

My next point may concern the draftsman. Turning to clause 3 of the bill, I notice that section 226 is to be amended by adding a new sub-section. When one reads the proposed sub-section, one finds that it refers to proposed new section 273ea. It is to be operative in relation to the application of that proposed new section. But looking at paragraph 2 of clause 4 I find that all the provisions of section 226 are ousted-

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

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

Senator WRIGHT:
Tasmania

– I rise for two purposes: first, to enable Senator McKenna to speak again very soon, and secondly, to refer to the fact that he has taken advantage of this committee debate to allow fallacies to float, like the spirits in “The Tempest”, in “too thin air”. 1 should like to say that there is nothing in many sections of the Customs Tariff (Industries Preservation) Act referring to emergencies.

Senator McKenna:

– I never said that there was anything.

Senator WRIGHT:

– Senator McKenna gave the impression that these Executive impositions arise, under previous legislation, only in cases of emergency. That is not so. It would require a vivid imagination to argue that there is a formula for these Executive duties in other acts. In relation to the duty imposed on goods dumped below cost, the Minister must assess what is a reasonable cost of production and then add 20 per cent. As we all know, cost of production is an extremely variable figure. The function of assessing a cost of production figure would be almost indistinguishable from the function that the Minister will perform under this legislation.

It does not seem to me to be worth while to pursue these points, but as Senator McKenna put them on record, I thought that the opposite point of view should be underlined. I do not state it in any final sense, but it seems to me that his argument on this basis is a very indefinite one. With those few remarks, I will resume my seat and enable Senator McKenna to develop his point.

Senator McKENNA:
Tasmania

– I am obliged to Senator Wright for his courtesy. Apparently I must clear up a misconception under which he appears to be labouring. When I spoke about the Customs Tariff (Industries Preservation) Act I did not use the words “ urgency “ or “ emergency “. I did not use those terms in relation to that act. Will honorable senators please note the difference between the Customs Tariff (Industries Preservation) Act and the Tariff Board Act, to which I did refer? I come back to the point that I made: Of the bills before us, one is the Tariff Board Bill. It proposes emergency procedures. It also provides for what I inexpertly described as the by-passing of the Parliament in an emergency. Another bill with which we are dealing seeks to amend the Customs Act. I point out that under the legislation now before us, in a normal tariff proceeding, with no emergency at all, the Minister may, when the Parliament is not in session, act as though there were an emergency. I think there has been some confusion, and understandably so, between my reference to the Tariff Board Act and the Customs Tariff (Industries Preservation) Act. I am glad that Senator Wright, in referring to my comments on the Customs Tariff (Industries Preservation) Act, that provided formerly for the determination of a duty, has decided to express no final opinion. In that event we will have to call it a “ no decision bout “.

I pass now to the next point, and I am obliged to have the opportunity to conclude my argument. I make the point that section 226 of the Customs Act is the machinery provision which ensures that no officer of

Customs can be prosecuted or proceeded against, because of anything he has done to collect revenue, from the time the tariff proposal comes into the Parliament for a period of six months or before the close of the session in which such tariff is proposed, whichever first happens. That is completely clear. We are now inserting a new subsection into section 226 to cover the type of procedure that the Minister is authorized to take under new clause 4. It is a lengthy clause and I do not want to read it all. It gives protection to officers and covers the new procedure. As I read through subsection 2 of proposed new section 273ea, T note the words -

Where notice of intention to propose a Customs Tariff or a Customs Tarin! alteration has been published in accordance with this section, the Customs Tariff or Customs Tariff alteration shall, for the purposes of this Act-

Here are the significant words - (other than section two hundred and twenty-six).

In other words the new legislation will throw out not only what will be now sub-section 1 - the existing section 226 - but also the new sub-section purported to be inserted by the proceeding clause. That is the way it appears to me. If that is not the position, I should be glad to be so informed. It appears to me that what is meant there might be “ other than section 226, subsection 1 “.

Senator Wright:

– It is introduced as a specific clause analogous to section 226 for the very purpose of acknowledging the very principle that you claim you want to preserve, namely parliamentary authority.

Senator McKENNA:

– Not at all. I see section 226 being completely discarded by sub-section (2.) of proposed new section 273ea. At all events 1 will be interested to hear what the Minister has to say.

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

– I shall deal first with the second of the two points raised by the Leader of the Opposition (Senator McKenna). He referred to section 226 of the Customs Act which fixes the period of protection of officers when a proposal is tabled in Parliament. The proposed new sub-section will provide a period of protection where a notice is published in the “ Gazette “ until seven sitting days after the House of Representatives meets.

This is a different period of time from that relating to ordinary proposals in the existing section 226.

Senator McKenna:

– I appreciate that.

Senator HENTY:

– The existing section would not cover the period when a proposal was published in the “ Gazette “. The draftsman advises me that both these protections are still available, one when the proposal is tabled in Parliament, and the other when the proposal is published in ihe “ Gazette “.

Senator McKenna referred to section 15 of the Tariff Board Act which reads -

The Minister shall refer to the Board for inquiry and report the following matters: -

The necessity for new, increased, or reduced duties, and the deferment of existing or proposed deferred duties;

The section then continues - and shall not take any action in respect of any of those matters until he has received the report of the Board.

That lays down what the Minister must do.

Senator McKenna:

– That will have application to this emergency measure.

Senator HENTY:

– No. Section 17a of the Tariff Board Bill covers the emergency measure. I do not think I need to say anything further about the two points that have been raised. Senator McKenna referred to the Customs Tariff (Industries Preservation) Act, but I did not understand him to make reference to an emergency in that connexion’.

Senator McKenna:

– Senator Wright did.

Senator HENTY:

– And Senator Wright is quite right. The Minister for Customs and Excise has a number of powers under Customs legislation which he uses, not in the case of emergency, but in normal procedures. There are the by-law provisions which give him the right to waive duty altogether. In the case of dumping duties no formula is provided, and he has to arrive at a judgment as to fair market value or cost of production. The only formula he has to follow in section 5 of the Customs Tariff (Industries Preservation) Act is that he adds 20 per cent, to what he determines as the cost of production. That is a different matter altogether. Having received the report the Minister must make a judgment as to cost of production or a fair market value of the imported goods. The matter is left entirely to the judgment of the Minister. He adds 20 per cent. to the figure he arrives at, but the determination of the fair market value is left entirely to the Minister.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I wish to refer to the point I made relating to the exclusion of section 226 of the Customs Act by subsection 2 of proposed new section 273ea. I do so out of a sense of responsibility, and I suggest that what is intended is to exclude section 226, sub-section 1, and not the whole section.

Senator Henty:

– That is so.

Senator McKENNA:

– That is not stated. If the Minister agrees with me I am quite satisfied.

Senator Henty:

– I am informed that we are excluding both, and for very good reasons.

Senator McKENNA:

– As long as the Minister’s mind has been directed to the matter, I am happy at having raised it and will leave it at that.

The last point I wish to make is the Minister’s reference to the Minister for Customs and Excise being required to arrive at a fair market value. I have in my hand the Customs Tariff (Industries Preservation) Act to which we have made a good deal of reference. In the definition section there is a most particular reference as to how that market value has to be ascertained. The act provides - “ the Fair Market Value “ of goods means the fair market value of the goods, or of goods of the same class or kind, sold in the country of export in relation to which the expression is used, for home consumption in the usual and ordinary course of trade plus free on board charges in that country, but not including any excise duties payable in that country.

The matter is not left to the discretion of the Minister.

Senator Henty:

– What happens when there are a number of prices, and there often is?

Senator McKENNA:

– It is not left to the Minister’s broad discretion. A formula is laid down for him; and by contra distinction there is not only no formula but also no hint or indication is given to the deputy chairman of the board in relation to this matter.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Sitting suspended from 5.45 to 8 p.m.

page 187

QUESTION

ESTIMATES AND BUDGET PAPERS 1960-61

Debate resumed from 16th August (vide page 32), on motion by Senator Paltridge -

That the following papers: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1961.

The Budget 1960-61 - Papers presented by the Right Hon. Harold Holt in connexion with the Budget of 1960-61.

National Income and Expenditure 1959-60 - be printed.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Mr. Deputy President, the motion before the Senate is that the Budget Papers be printed. As everybody in the chamber knows, it is a formal device to enable us to discuss the Budget concurrently with another place. The motion itself, of course, is completely ineffectual - the Budget Papers, running into hundreds of pages, are already printed in fact - but it does provide a convenient opportunity at this stage to express some thoughts that arise from a preliminary consideration of the Budget proposals.

I think it is beyond argument and doubt that the Commonwealth is held responsible for the economy of the nation. There is one Australia-wide, integrated economy. Anything affecting the economy in one of the States or places has repercussions throughout the whole of Australia. I do not think anybody would argue against that, nor deny the proposition that there are not six separate State economies, but one Australiawide economy. The Government itself admits responsibility for the economy and is, in fact, held responsible by the people of Australia for it.

One of the greatest factors in the situation is the aggregate expenditure in both the public and the private sectors of the economy, and the economic policy of any Government must concern itself with that aggregate expenditure. That expenditure should not be so high as to cause balance of payments difficulties and lead to rising costs and rising prices, but it should be high enough to maintain full employment in the nation. The duty of a government in pursuing an economic policy is to expand or contract that aggregate expenditure to meet the changing situations that present themselves, The Treasurer (Mr. Harold Holt), at the very outset of his speech, said this -

The Budget ;s not the only instrument of policy -monetary policy and trade policy have highly important roles to play - and there must be a consistency between all three. But the Budget has a great and pervasive influence . . .

I can agree with that. The Budget, of course, is the most flexible instrument in the hands of the Government for conditioning the economy, but it is a lazy way out to use it with undue emphasis, and it can also be a wrong way.

The first task I undertake is to show that the Budget, as an instrument of policy, has been used far too heavily, not only on past occasions but on the present occasion. The Government is not without other powers for conditioning the economy. I consider that those powers have been inexpertly and inefficiently used in some cases and that they have been adequately used in others. 1 point to the power over public borrowing as one instance of a great power being inexpertly used. I shall return to that presently. The theme I want to develop at the moment is that there are great gaps in the constitutional power of the Commonwealth. There is no adequate power over corporations. The Commonwealth cannot have - a uniform company law. That is completely clear. We have no power over capital issues in peace-time, over consumer credit, or over restrictive trade practices. We have no adequate power over industrial relations and no adequate power to control interest other than bank interest. These are great powers, and I propose to say a few words about some of them. Without them, it is perfectly certain that a Commonwealth Government of any political colour is,., to a very appreciable extent, shackled and has its hands tied behind its back.

The first question to which 1 refer is that of capital issues control - the control of capital raisings and borrowings by corporations. As the Senate knows, all these matters were dealt with in the report of the Constitutional Review Committee, which was composed of six members from the Government side and six from the Opposition side of the Parliament. The committee brought in some 21 recommendations, thirteen of which were- unanimous decisions. The remainder had a majority of 11 to 1, so that they all have a very powerful and persuasive effect, I would suggest.

Let me deal with capital issues. The problem of company finance in this country has changed considerably in recent years. The emphasis has shifted from raising money by the issue of shares to raising it by debentures, note issues and that type of thing - the taking of deposits at various rates of interest. I would like the Senate to note that in 1952-53 companies raised £26,500,000 in capital subscriptions and only £11,900,000 in debentures, notes, &c, but in 1958-59 capital subscriptions totalled £47,900,000, while debentures, notes and deposits rose to the huge sum of £139,600,000. The emphasis has shifted entirely. Internal finance of that type, I point out, accounts for at least two-thirds of all credit and finance available to business in Australia. Over that, the Commonwealth has no control.

One might develop an argument - I have dealt with it in this chamber before - that the banking power extends to concerns of that type. That matter has never been explored by the Government or by the High Court. It is an unresolved question so far as the application of the power goes. So when the Government of this country seeks to enter the field of finance ind to regulate it, it finds that the greater part of the field of credit is beyond its touch. I shall deal in a moment with the Commonwealth’s power over banking. At this stage, I merely wish to comment that the scope of banking in the provision of credit has declined immeasurably since the pre-war years - in fact, in recent years.

Senator Wright:

– It has proved sensitive to control.

Senator McKENNA:

– More than sensitive. It also used the door that the

Government opened for it by repealing section 28 of the Banking Act 1945 and letting it out into the field of stock exchange securities. Otherwise, the banks’ portfolios would have been under the jurisdiction of the Treasurer. The truth is that whereas some years ago the banking system of Australia provided 56 per cent, of all credit, to-day it provides only something like 20 per cent, or 25 per cent. We talk about the central bank’s power of control over banking. It is exercising a power over a very important field of marginal credit, but a constantly diminishing one, and the banks themselves, as I say, have escaped into finance companies, fixed trusts and that type of investment. They are beyond the control of the National Parliament. That, I suggest, is a most serious aspect of the economy. It is the broad base on which the argument proceeds for the conferring of power on this Parliament over capital issues.

Let me refer to consumer credit, another matter in respect of which the Constitutional Review Committee made a recommendation to the Parliament. There has been enormous development in that field. In the hire-purchase field alone, the extent of the development is seen from the fact that the amount outstanding under hirepurchase agreements in 1953 was £88,700,000. In 1959, it had grown to £354,000,000. According to figures released by the Commonwealth Statistician only the other day, it is now running at £416,000,000. That is a new and a tremendous growth. Of course, apart from hire purchase there are other forms of time payment. Anybody with the most elementary knowledge of economics knows that changes in the growth of credit finance can intensify both inflationary and deflationary pressures. Accordingly, of necessity such changes should attract the attention of a government directing the economic policy of the nation. The view has been put by the committee - and 1 support it very strongly - that there should be power to vary the credit available to finance companies and to expand or contract, according to the circumstances, borrowing from them by the public.

I come to the question of interest on land transactions. I take it that nobody would deny that that leads to inflation of costs, or that it is a most important matter p, home, builders and also to the owners of farms. I very strongly put the logical view that it is absurd that the Commonwealth can control rates of interest in relation to that kind of land only when loans are made by banks, lt cannot do so if loans are made by other financial institutions. It is clear that a control of that kind could not possibly be left to the unco-ordinated action of six State governments.

I pass to the subject of industrial powers. The committee looked at the thirteen wage fixing authorities in Australia, at the mass of awards affecting standards of wages throughout the country, and at the limited power of the Commonwealth in the field of industrial relations, one of the most fundamental factors in the economy of the nation, and described the present situation as one of exotic confusion. All these things need to be looked at. Everybody acknowledges that there ought to be a uniform company law, and for the last 40 years, to my knowledge, everybody has been saying that uniformity will be brought about. I think that discussions on that subject are proceeding at the moment, but the point is that we still have not achieved uniformity.

All these matters, I repeat, have been the subject of two reports, one in October, 1958, and the other in November, 1959. The recommendations were tabulated in the first report. I say that they are vital, if there is to be effective control of the economy by the Government. One great default of this Government is that, although it has realized the truth of what I have said, and although it has had before it for two years, at least, the recommendations of the committee, and also has had before it for at least nine or ten months the reasons for those recommendations, the Government has not yet moved in relation to the matter. In the face of the cold war waged at the economic level by countries which can marshal ruthlessly their resources, human and material, and direct them equally ruthlessly against the democracies, this country cannot afford to have a national parliament with its hands tied behind its back, in a situation which changes quickly and from time to time demands instant action. We have agreed upon the need for instant action in another field that was discussed in this chamber to-day.

These are great problems. The view that I put to the Senate is that they are of the first magnitude. I think it is not to the credit of the Government that it has failed to address its mind to them and has neglected to explore the power it already has over trading and finance corporations formed in Australia. If the Government’s power in that respect were curtailed by the High Court, why not ask the State governments to refer power to the Commonwealth. If that failed, why not do the democratic thing and put the position frankly before the people and let them take the responsibility for curing it.

Another matter that I propose to mention is the question of power over restrictive trade practices. The power in this respect is limited. The Constitutional Review Committee has made a recommendation in relation to the matter. The Government, in the course of the GovernorGeneral’s Speech earlier this year, on the opening of the Parliament, advised that a bill would be introduced to control restrictive trade practices, but the Government has gone on its leisurely way, and we have not seen the legislation. I have selected this theme as one of the most important that I could put before the Senate. The report of the committee has been in everybody’s hands for a long period, and most people who have read it will agree, I think, that I have summarized under a few headings some of the major matters affecting the economy.

If the Commonwealth Government had the powers that I have mentioned it would not have to concentrate on placing such terrific emphasis on the Budget year after year, with violent changes. Expenditure must contract and expand, and the taxation medium is valuable for that purpose. But the Government uses that medium like a sledgehammer. It chops and changes from budget to budget, to the confusion of the business community. If it had the powers to which I have referred, it could resort to control of consumer credit and of capital issues. The Government could relax those controls as the occasion demanded. In those circumstances, we would not have the Budget being used for a purpose for which it is not fully designed.

Regardless of the political complexion of the Government that sat at Canberra, I would argue in favour of those propositions. I take this opportunity to condemn the present Government for not sooner realizing the broad aspects of what I have put and for not sooner moving as I have indicated. I can commend the Government for allowing the Constitutional Review Committee to sit and to prepare a programme which, in the view that I take, is the only programme for constitutional change that will be politically practicable down the next decade and perhaps even longer that that.

Senator O’Byrne:

– To meet the crises of our times.

Senator McKENNA:

– Yes. We must realize that the Constitution is outmoded and that it is a brake on the progress, not only of the nation but of everybody in it. I make that plea as my first subject-matter this evening.

Arising out of what I have already said, 1 now wish to refer to public borrowing, a subject that I have already mentioned. In my view, the highlight of the Budget is the failure of the local loan market. The greatest omission from the Budget is the lack of reference to steps to overcome that failure. I have developed a theme of this kind before the Senate on many occasions, as honorable senators know, and I want to put it again very briefly to-night. This year, the loan market has failed to yield any money for Commonwealth capital works. The sum of £35,000,000 is to be provided for war service homes, approximately £40,000,000 for new post offices, £18,000,000 for the Snowy Mountains scheme, and £7,000,000 for aerodromes and works of that kind. That total is only £2,000,000 less than the figure for last year, despite the unfortunate reduction of £10,000,000 in the vote for the Snowy Mountains Hydro-electric Authority. 1 take out that capital item, and one more - the £126,500,000 that is being transferred in one transaction to the Loan Consolidation and Investment Reserve, which already has a swollen balance of £208,000,000. I shall come back to that matter.

Let us concentrate on the two sums I have mentioned - the sum of £140,000,000 for Commonwealth works and the sum of £126,500,000 to be transferred to the Loan Consolidation and Investment Reserve, a total of approximately £265,000,000. The sum of £126,500,000 is to be applied, first, to make up the deficiency of £80,000,000 in the loan raisings required by the States. The States want £230,000,000, but the Government says it can raise only £150,000,000. So £80,000,000 has to be found from revenue to fill the gap. The money will be taken out of that transferred to the Loan Consolidation and Investment Reserve. The National Debt Sinking Fund commissioners have only £52,500,000 to meet redemptions of public loans amounting to £80,000,000. So another gap of £27,500,000 has to be met. That will leave a balance of £18,200,000, which will include the surplus of £15,000,000 for which the Treasurer has budgeted and which, he says, will be applied, if it exists, in reduction of treasurybills - a capital commitment. In this one year there will be a surplus of revenue over and above that required for the ordinary running of the country, but because of the failure of the loan market and the failure of the Government to meet capital commitments, there remains a gap of £265,000,000, which is a colossal amount.

The situation is not peculiar to this financial year. It has gone on year after year for eleven years during this Government’s term of office until the total value of Commonwealth works paid for by the taxpayers amounts to £1,360,000,000. The deficiency in the sums required by the States over the same period amounts to well over £600,000,000. So instead of a total of £2,000,000,000 being raised on the loan market, the taxpayers have had to pay the lot. We, the taxpayers of this year, are still paying for the past and are relieving the taxpayers of the future. Quite a few of us in our lifetime have had to finance two wars and to go through one depression. We do not look with favour upon what is supposed to be an era of prosperity which imposes such a colossal burden on the rather elderly citizens of the Commonwealth who have passed through two wars. Of course, the burden has rested on everybody, but it has been of particular significance to those persons. To cast such a burden upon the taxpayers is quite unfair.

It is also unfair to the States, because the Commonwealth pays for its capital works out of the revenue it collects year by year. It does that to preserve its dominance of the Australian Loan Council, so that its works programme will not be lined up with those of the States and become involved in the question of priorities. That is one of the reasons. The other reason, of course, is that it is much cheaper for the Commonwealth to finance works out of revenue than to take a proper share of the loan moneys. At the same time, the States are required to pay interest on loans and to repay principal. One has only to spend a. minute looking at the public debts of the Commonwealth and the States to see just how the Commonwealth has benefited. The figures as at 30th June last, as revealed in the Budget, show that during the eleven years of this Government’s term of office the Commonwealth public debt had fallen by £264,000,000, whilst that of the States had grown by £1,546,000,000. The Commonwealth’s annual interest bill has fallen below what it was in 1949, whilst that of the States has risen by £72,000,000. The important point I keep on impressing on the Senate is that of that sum of £72,000,000, approximately £30,000,000 represents interest payable upon revenue collected by the Commonwealth Government and not given to the States to help them, but lent to them at interest.

Senator Wood:

– Shocking!

Senator McKENNA:

– It is shocking. It is more than that; it is inflationary. We get the crazy and unfair situation in which the Commonwealth taxes the people of Australia to raise the money which it give ? to the States in the form of income tax reimbursements to pay an interest bill of £30,000,000. That is the silliest, craziest and most unfair thing that could happen in accounting. Where is the element of partnership between the Commonwealth and the States in a situation like that?

I go further and say this: When you take up a Budget of the kind we are considering to-night and you find revenue items and capital items, or loan funds and ordinary revenues, all mixed up in the one pot and brewed together, you have quite a false picture deliberately presented to the people, of Australia. The reason for that is the desire to conceal the great gap in our loanraising programme. It is done in an attempt to camouflage and hide the gross failure of the Government to raise the loan moneys that should be raised. The taxpayers’ association addressed itself in trenchant terms to that aspect of the matter. It cited the relevant figures and said -

These figures are the end result of an amazing conglomeration of revenue and capital items and Of cash and credit entries that would horrify the -auditor of a public company.

They ought to horrify anyone who has any understanding of accounts.

I ask where in this Budget there is a single proposal to bridge the gap in the Loan Council’s raisings. I invite some honorable senator opposite to indicate where the Treasurer even addressed his mind to it. Last year, I was challenged by the Minister for Civil Aviation (Senator Paltridge), who represents the Treasurer, to offer some suggestions as to how the situation could be cured. I made what I considered to be two perfectly valid suggestions, and I shall repeat them. First, let the Government do what it does, at least to some extent, with overseas loans and give relief from taxation on the interest earned on Commonwealth bonds. Secondly, let it write on the bonds that it issues, whether they be for a ten-year or a fifteen-year period, a statement to the effect that if the rate of interest is subsequently increased it will be increased on the first issue as well as on subsequent issues. In that way the Government would consolidate the capital value of the various bonds on the market. The ordinary investors to a large degree have been frightened off by inflation and by fluctuations in the rate of interest which caused the capital value of their early bonds to tumble. No comment on those suggestions was offered by any member of the Government when I put them forward last year.

I am dismayed when I see how complacently the Government faces the fact that in this one year it will be £220,000,000 down on its loan funds. The Government does not address itself to the problem. I doubt whether it even sees the problem. If it does, it ignores the situation, and its unfairness to the taxpayers of our time and to the States.

We are told that as part of the economic policy of the Government there will be tighter bank restrictions, and apart from that the Treasurer admitted in his speech that this year there will be a very substantia! fall in our overseas balances. That factor alone will force a reduction of liquidity in this country, which means that the banks can lend far less and money will be forced out into the unofficial banking system of which I have already spoken. They, in turn, will find money harder to raise. But they will be prepared to offer higher rates of interest. They are already clamouring for higher rates of interest, and they are being supported by the press of this country, regardless of the inflationary effect an increase in the rates of interest would have. That is one aspect of the Budget to which serious consideration must be given. A while ago I referred to the Loan Consolidation and Reserve Account, to which this year we are transferring £126,000,000 out of revenue. That account already has a credit balance of £208,000,000, all of which is in readily realizable Commonwealth Government securities, except for £21,000,000 which is invested in treasury bills. That enormous credit is there already and its investments comprise tangible and readily realizable assets.

When we on this side of the chamber criticize the Government’s economic policy from time to time,’ we are told that we are calamity howlers. Let me introduce a calamity howler other than myself. Let me introduce the Treasurer himself. On page 2 of his speech he said -

Prices and costs rose sharply over last year and, so far, the rate of increase does not seem to be slackening.

In other words, there is inflation. The Treasurer continued -

Shortages of key materials and of some classes of labour have appeared - clear signs that, once again, our efforts to expand are, in some directions, over-reaching our resources. The recent rate of imports also suggests that, notably though local supplies have increased, they are failing to match the rise in demand and this, in consequence, is spilling over into demand for imports. Speculation in shares and other securities and in land is disturbingly active and prevalent

What does the Treasurer propose to do about it by means of this Budget? I should like a member of the Government to tell me, because I cannot find the answer to that question. On page 4 of his speech the Treasurer made tha statement that the greater inflow of imports which is expected this year will, almost certainly, involve a substantial running down of our international reserves. He spoke about the use of monetary policy. The Senate will recall that in February last the Prime Minister indicated four avenues for attacking inflation. One of them was the restriction of bank credit. Let us see how effective the Government’s activity has been. Again I quote from Mr. Holt’s speech. He said -

However, trading bank advances have risen steeply in recent months and, for the year as a whole, showed a total increase of £99,00P,000.

I am certain that had I made these statements Government senators would have said I was a calamity howler; but that is the state of the economy to-day according to the Government’s own Treasurer.

Senator Scott:

– By how much did deposits increase?

Mr McKENNA:
TASMANIA

– I have not that figure before me at the moment, and I do not want to pursue that topic now. I am speaking on other topics. I have no doubt that deposits may have increased.

Senator Scott:

– They did.

Senator McKENNA:

– It is perfectly true that they would increase, but when the Government issues a prohibition against advances it is an admission of complete failure that they should have risen by £99,000,000, bringing a complaint from the Treasurer himself, who ought to be in control of the situation.

I should like to make one further reference to the Treasurer’s speech, and then I will pass from it. On page 10 he said something that really cheered my heart -

On the basis of existing taxation rates, total revenue in 1960-61 is estimated to be £1,572,600,000 which is £140,800,000 greater than actual revenue in 1959-60.

Without increasing any of last year’s rates of taxation, the Government would raise £.140,800,000 more revenue. Of course, that is due to the natural expansion of the economy. I used that term in 1954 to indicate that we would resort to that source to finance part of Labour’s proposals. It was scorned by the Prime Minister and every other member of the Government; but the fact was that right up to the time I spoke, it had happened every year, and moreover it has happened in every subsequent year. It is a sign of an expanding economy. More people are coming into it; more children are leaving school and coming into the work force and there is greater business activity. It is a natural expansion. So, without increasing taxation at all the Government will be £140,800,000 better off this year than it was last year. However, the Government is not happy with that situation. By way of additional taxation the Government will raise an additional £36,600,000 this year and £40,000,000 in a full year. That addition this year will make the new receipts £176,700,000. I admit that the Government has increased expenditure, the largest part of which is inescapable. The Government has increased its expenditure by £89,000,000, which leaves it £87,000,000 to the good. It is from that source that it gets the £80,000,000 to fill the gap in the loan programme just to enable the States to carry out their works programmes. Of course, the Commonwealth has already helped itself to £140,000,000 for its own capital works.

I pass now to the very important subject of inflation. I cannot omit to refer to the promise this Government made in 1949 to put value back into the £1. I recall a statement made by Senator Spooner in this chamber when the Opposition voted for a bill for a referendum to halt inflation, or to help halt it, in 1950. Senator Spooner said the matter was one for the people themselves to solve. It is true that the people have a task, but Governments also have a part to play and a responsibility. In short, the Government threw up its hands at the onset of inflation. And what did we find in their first three years in office? In 1950, the basic wage rose by 13s. a week through cost-of-living adjustments. In the next year it rose by 38s. a week. In the third year it rose by 31s. a week. So, it rose by £4 2s. in the Government’s first three years of office.

Senator Kendall:

– That included some loadings.

Senator McKENNA:

– No.

Senator Scott:

– Be fair about it.

Senator McKENNA:

– I am being completely fair. I will repeat my statement so that the honorable senator may check it and take the matter up with me at a later stage. That increase includes no loadings at all. I have taken cost-of-living adjustments alone; I have completely ignored the £1 increase granted in December, 1950. I have completely ignored any additions to the basic wage; I am talking about costofliving adjustments alone. The basic wage rose by £4 2s. in the first three years of the present Government’s term of office. By way of contrast, 1 point out that over the whole eight years the Labour Party was in office, although certainly we had controls, the basic wage rose by £1 16s.

Senator Wright:

– As a matter of interest, have you the figures for subsequent periods?

Senator McKENNA:

– Yes, I have available somewhere the figures right through. Honorable senators will recall that in 1953, cost-of-living adjustments were tossed aside and they did not come back-

Senator Wright:

– On a statistical basis.

Senator McKENNA:

– On a statistical basis, that is so. They were no longer applied to workers under federal awards. The basic wage, including all components, was £6 9s. when Labour left office in 1949. To-day it would be £14 12s. if the costofliving adjustments had been continued, but in actual fact, it is £13 16s.; it lags 16s. behind. A new index has been prepared and we are invited to consider it. I am not prepared to evaluate it until I have the information that I sought in the Senate the other day in regard to the pricings and weightings used in its calculations.

The inflation that I speak about has run almost without hesitation during the whole eleven years of this Government’s term of office. It is now a chronic ulcer in the vitals of the economy, and the damage that it has done to the pensioner class, to persons on fixed incomes and to our export industries, particularly our primary industries, is incalculable.

Senator Robertson:

– What about the general prosperity of the people, as evidenced by the savings bank deposits, which have never been higher than they are now?

Senator McKENNA:

– The honorable senator should recall that there has been a tremendous development in the savings bank field. Until recently savings banks were restricted to governments, but the present Government, by opening the door, has let the private trading banks into the savings bank field. That accounts very largely for the increase in deposits. The honorable senator must also take into account the fact that the figures we are talking about to-day are inflated figures, compared with earlier periods. We are dealing with a vastly depreciated currency. The position is entirely different.

Senator Paltridge:

– 1 invite the honorable senator to have a look at the figures for the Commonwealth Savings Bank, irrespective of the figures for the savings banks of the private trading banks.

Senator McKENNA:

– I take it that if 1 do not look at them the Minister will tell me about them when he speaks. 1 shall accept his invitation and have a look at them. He will appreciate that, having regard to the many hundreds of pages submitted to us in the Budget papers, one cannot have all the facts in one’s mind.

What has the Government done about inflation, particularly in recent times? What is its approach? It concentrates its whole attack upon the wage factor, lt approaches the Commonwealth Arbitration Commission and asks it to grant no more basic wage increases. What does it do to the other sections of the community? It lets them run free. Let me refer to the White Paper circulated by the Minister. I talked earlier about the need to condition the proportion of public investment to private investment. Let us have a look at the position of companies last year, as disclosed by the Treasurer. The total income of companies, including banks, was £694,000,000. They paid in income tax £228,000,000, which left them with £466,000,000. They paid in dividends £157,000,000, which left them with £209,000,000 in undistributed profits. They had more in undistributed profits than they paid in dividends. In addition, the depreciation allowances, as shown by the Commonwealth Statistician, ran to the tune of £470,000,000. The greater part of those allowances was in favour of companies. There may be some element of allowances to individuals, but the great bulk of it was in favour of companies.

So, as the Commonwealth Statistician shows, the companies of this country, after making profits, paying taxes and paying dividends, had left for the expansion of their businesses last year alone a total of £675,000,000, made up of £209,000,000 in undistributed profits and £470,000,000 in depreciation allowances reserved against profits. What does that mean to the ordinary people of Australia? It means that all the people buying goods and paying for services have not only paid enough to enable those companies to pay what they consider fair dividends for their shareholders but also enough to enable them to put away £675,000,000 more for their future expansion and development. This simply means that, uncontrolled as they are, they can produce what is, from their own viewpoint, a magnificent result, whilst the Government and the Commonwealth Arbitration Commission say to the great bulk of the workers of this country, “ You may have no increase “. Is it not time that the position was squarely faced? If the Commonwealth lacks power in the matter, is it not time that it said so, got the power and, having got it, did something about the position?

Senator Wright:

– To what power do you refer?

Senator McKENNA:

– Power to condition the economy to halt inflation. I refer to capital issues and the whole series of things which I mentioned earlier. Under the head of inflation, I want to make a rapid reference to the Tariff Board’s annual report for 1956. The board, as to whose competence and integrity everybody paid tribute throughout the past two days, had this to say -

Pay-roll tax is another example of a Government impost, right at the base of the cost and price structure which might be considered for removal. It may be true to say that every Et of income received by the Government in payroll tax means an increase in price to consumers of at least £2.

In other words, the impost is doubled by the time it reaches the consumer. This year the Government budgets to collect £60,000,000 in pay-roll tax. Sales tax is in the same category. It is a charge that is passed on, with mark-ups as the goods pass through various hands, to the consumer. An amount of £180,300,000 is to be raised under that head this year. Sales tax and pay-roll tax will total £240,000,000. On the authority of what the Tariff Board has said, it is safe to say that they will add £480,000,000 to the cost structure of Australia.

Senator Laught:

– Did the Tariff Board say that about sales tax?

Senator McKENNA:

– No, I made that clear. The board referred to pay-roll tax. I made the comment about sales tax.

Senator Scott:

– The last estimate is yours.

Senator McKENNA:

– My very obvious and logical conclusion is that if the position is true of pay-roll tax, it is more true of sales tax.

Senator Scott:

– No.

Senator McKENNA:

– Of course it is. Everybody recognizing the need for an attack upon the cost structure to keep costs down, I invite somebody on the Government side to tell me what the Government has in mind in relation to taxes with these potent effects upon the cost and price structures, which we desperately need to reduce. The other aspect of sales tax is that it is imposed at a flat, uniform rate upon every individual in the country, without regard to his income or to whether he is rich or poor, or to whether he has little or much. Under this Government there has been an increasing development of the indirect taxation field as against the more equitable graduated scale of income tax.

Looking at the taxation field, we see the stops and starts of the Government. In 1956 it imposed a ls. increase of the company tax, and in 1957-58 it took off half of it. Then it re-imposed that amount this year. In relation to the income tax of individuals, there was a 5 per cent, reduction for everybody last year, which has been re-imposed this year. All confidence is destroyed in a Government that behaves in that way - that lives from month to month and chops and changes. The Australian Labour Party says that it is unfair to discontinue the 5 per cent, rebate. Individuals on the lower incomes should pay less tax than they do at present, and a higher rate of tax should be levied on individuals on higher incomes. In Australia to-day 75 per cent, of the taxpayers earn £1,500 a year or less. The 5 per cent, rebate on their income tax gave them an average of ls. 2£d. a week, but it gave to the 57 persons earning £50,000 a year or more something like £40 a week.

Senator Scott:

– But what will happen now?

Senator McKENNA:

– That money will now go back into revenue. If the Government did the fair thing it would pay more regard to the people on incomes of less than £1,500 a year. It should give a rebate of 10 per cent, lo those people and perhaps only 2 per cent, to the people who can well afford to pay a high amount in tax. The people at the top of the income scale could pay more than £40 a week without suffering hardship.

Senator Henty:

– That is not what you said on other occasions.

Senator McKENNA:

– The Minister may remind me of what 1 have said if he likes. The burden of taxation is increasing year by year. The average amount paid per capita, counting every man, woman and child in the country, is £155 12s. 4d. a year. That is an indication of how the Budget has been abused and misused unnecessarily and too heavily. The Government should use other avenues that are available to it for the raising of revenue and so reduce the burden of taxation on the people. 1 want to say something about defence. Last year, the Government spent £193,500,000 on defence. This year, it has budgeted to spend an extra £4,500,000, making its defence expenditure £198,000,000. The extra £4,500,000 will not provide Australia with any more bombers, fighters, submarines, guided missiles or military equipment of consequence. It is obvious that such new equipment is not contemplated. I remind the Senate that in April, 1957, the Prime Minister (Mr. Menzies) stated that Australia would manufacture a new fighter for the Air Force. He promised that the Navy would be re-equipped. We lacked ships of an appropriate kind, and the Prime Minister said that the Navy would be completely re-equipped. Defence missions have been abroad investigating new equipment. The Minister for the Navy (Senator Gorton) has stated that the Navy mission has submitted its reports and that they have been forwarded to the Minister for Defence. The matter is now awaiting a decision by Cabinet. It has taken three and a half years to reach that stage. The position with regard to the Air Force is even worse. We have an urgent need for new fighters and an even more urgent need for a new bomber to replace the Canberra. The Minister for Air (Mr. Osborne) has admitted that. As yet the mission that went abroad seeking new fighters for the Air Force has not submitted its report. Probably we shall know the outcome of its inquiries in the next financial year. The dithering and delay associated with our defence is disgraceful. Look at the amount of money that is now admitted to have been wasted on national service training. The sum of £150,000,000 has gone down the drain. The report of the Auditor-General for this year reveals instance after instance of waste and fraud in connexion with funds for defence services. His report should command the attention of every honorable senator.

Time does not permit me to deal with the paltry amount provided in the Budget for repatriation benefits. They are negligible, despite the fact that the Government expects to obtain an extra £170,000,000 in revenue. I noticed in to-day’s newspapers that the 400 delegates attending the conference of the New South Wales returned servicemen’s organization carried a resolution referring to the callous indifference to war pensioners shown by the Government in drawing up its 1960-61 Budget. What is true in respect of war pensions and repatriation benefits is also true in respect of other social service benefits. I will leave it to my colleagues to deal with those matters. The entire field of social services has been neglected .by the Government, particularly child endowment. There has been no change in the rate of child endowment for the second and subsequent children in twelve years. There has been no change in the rate of child endowment for the first child since 1950. The value of child endowment has disappeared almost completely. The Government has done nothing to increase maternity benefits. The Government has refused to increase the allowance provided for wives of invalid pensioners.

What is the general picture one sees in Australia to-day? Husbands are obliged to work overtime and their wives are compelled, in the face of inflation, to go to work. The old people in the community are now forced to do more housework and baby-sitting than ever before while their married daughters work. The picture presented of family life is not a very happy one. The Budget makes no attack on the cost structure. It gives no stimulus to export industry. We still have 44,000 unemployed, and we face a difficult position with our balance of payments.

I have made some positive proposals to the Senate. I have suggested constitutional change. I have suggested action that should follow the obtaining of constitutional powers. I have made suggestions for the improvement of the loan market and for easing the position of the States in respect of their budgets. I have suggested that the Government should draw on the surplus in the Loan Consolidation and Investment Reserve Account. I have asked the Government to make decisions on defence. I do not want to hear honorable senators opposite ask what the Opposition proposes. In the limited time available to me I have made some positive proposals, and it is up to the Government to accept its responsibility and answer my proposals instead of ignoring them as it has done year after year.

Senator GORTON:
Minister for the Navy · Victoria · LP

.- The first thing that I should like to say in reply to the Leader of the Opposition (Senator McKenna) is that I do not think I have ever heard a speech on the Budget in this Senate which dealt less with the detailed proposals put forward by the Government. 1 do not think that Senator McKenna attacked in detail any of the positive propositions that have been put forward by the Government as concessions of one kind or another to the people of Australia. I did not hear him attack in any detail the proposal to increase the rate of company tax by 6d. What he said with regard to the Government’s decision to withdraw the 5 per cent, rebate on income tax was the complete reverse of what he said last year about the Government’s decision to allow the 5 per cent, rebate. Last year, he said that the granting of the 5 per cent, rebate was a most insignificant concession to the vast majority of people in Australia. He used the words “ most insignificant concession “ in his speech on 19th August, 1959, reported in “ Hansard “ of that date at page 173. He said, in effect, that only the rich people would benefit from the concessions. If that were true then, the reversal of that decision this year can only bear hardly upon the rich people and cannot bear hardly upon those who were said to have had only an insignificant concession when it was given to them.

The second thing is that I join issue with the Leader of the Opposition when he says that he has made some positive proposals to the Senate for the bettering of the economy of this country. 1 certainly heard some positive proposals to the effect that the Constitution ought to be changed, and I heard a proposal to the effect that this Government, or any government sitting in Canberra, should be given powers to control, in detail, from Canberra, all the transactions of companies and individuals throughout Australia. That would mean that a government in Canberra could say, in effect, that you can, or you cannot, raise capital for this purpose or that purpose. It could say, not on economic grounds, but on any grounds, “ We, the Government, do not approve of the purpose for which you want to raise capital “. It could also say that it would relax import controls, or would control all consumer credit so that those seeking to buy on hire purchase could be told that they could or could not buy a washing machine, a television set, or whatever it might bs they wanted to buy on hire purchase. That is complete control of consumer credit, and that is the way it would be used.

We were told, of course - and 1 took particular note of the remarks of the Leader of the Opposition in this respect - that this complete and detailed control of consumer credit, capital issues, industrial relations and all the other things he mentioned, would be relaxed or expanded, as occasion demanded, at the whim of the Government sitting at Canberra. That statement was immediately followed by an attack upon the Government because it had used its budgetary power to correct inflationary conditions.

Senator Ridley:

– Without success.

Senator GORTON:

– I am told that the Government has used its budgetary powers without success. I am willing to examine that proposition. We were told in the closing phrases of the speech of the Leader of the Opposition that 44,000 people were unemployed in Australia to-day. That is a lesser number of unemployed than Australia has ever known, even though Australia has a greater population than it has ever known.

Senator McKenna:

– That is not so.

Senator GORTON:

– If the Leader of the Opposition disputes that statement I will listen to what he has to say; but the percentage of unemployment to-day is lower than Australia has ever known.

Senator McKenna:

– That is not what you said first.

Senator GORTON:

– Fewer people are unemployed in Australia to-day than Australia has ever known previously.

Senator McKenna:

– That is completely wrong. There were 16,000 unemployed at the time the Government introduced the little horror Budget.

Senator GORTON:

– If the Leader of the Opposition informs me that what I have said on that particular point is wrong, J will accept his word; but I nevertheless press the general statement I made that unemployment to-day is infinitely lower than it was at the time of a previous Labour government, to which an honorable senator who interjected referred.

The Leader of the Opposition made a definite statement that things would be much better if this Government did not use revenue for the purpose of assisting the loan raisings of the States but permitted the States’ expenditure to be met in an undisclosed way by raisings on the loan market. I have heard that argument before, and I indicate that I do not believe it. We were told that because the Commonwealth Government is meeting its own public works out of revenue, on which it is not paying interest, and because it is making up to the States the amount which the loan market will not provide and on which the States are paying interest, there is great imbalance in that the Commonwealth public debt is sinking rapidly and the States’ public debt is rising rapidly, and that this is all because of the action I have just mentioned on the part of the Government. That is simply not true. It is true that the Commonwealth public debt has been sinking lately, but we must remember that the greatest factors in the debt of the Commonwealth are war debts and repatriation charges from two world wars. The last war was the occasion of an immense rise in the public debt of the Commonwealth of Australia.

At 30th June, 1939, the Commonwealth public debt stood at only £317,500,000, and of that amount £186,000,0000 represented war debt from the First World War. The States’ public debt at that time stood at £897,000,000, or in round figures roughly three times that of the Commonwealth public debt at that stage. The effect of the war is shown in the figures for 1946 when, from £317,000,000 the Commonwealth debt had risen to £1,809,000,000 whilst the States’ debt had remained relatively constant, because of a general lack of public works throughout Australia, as it rose from £897,000,000 to only £905,000,000. Since that time, because the composite works of the States are more extensive than Commonwealth works, it is true that the immensely inflated Commonwealth debt has dropped from £1,809,000,000 to £1,650,000,000 - not an immense drop - while the States’ debt has risen from £905,000,000 to £2,390,000,000 because of the back-log of works, and a works programme greatly in excess of anything undertaken before the war due to a greatly expanded population. The State debt to-day is much less. It is approximately one and one-half times the Commonwealth debt, whereas before the war, and before the intrusion of war debt, it was three times the Commonwealth debt. That does not indicate an immense sinking of the Commonwealth debt because of Commonwealth works being financed from revenue, or an immense increase in the State debt. The position is, Sir, that the drop in the Commonwealth debt reflects some payment of war debt and some suspension of increased debt on the part of the Commonwealth for capital works, but it also reflects the fact that most of the capital works in Australia are carried out by the States. In 1939 the State debt was almost three times the Commonwealth debt, whereas now it is less than one and one-half times as large.

The projects on which the States make this capital expenditure are to a great extent self-amortizing projects in the form of electricity undertakings, large irrigation undertakings and things of that kind. I cannot see, Sir - and this is where I think the Leader of the Opposition did make a concrete proposal - that the people of this country would be better off if, as a first charge on the taxation revenue raised from them, there were a large interest bill in respect of works carried out by the Commonwealth Government. It seems to me that not only would the people of Australia, if they had to pay a high interest bill, have to pay more in taxes to receive from the Government what they are receiving, but there would be a greater difficulty in increasing our public works in the future. I believe that it is in line, not only with the Keynesian philosophy, but with a philosophy which the Opposition party itself has always supported up to now, that in times of great prosperity, when money is freely available, it is better to build capital works with taxation revenue - with money taken out of circulation - and in times of monetary tightness to use bank credit to put money into circulation.

I would turn to the proposal on defence which has been put before the Parliament by the Leader of the Opposition. We were told that an increase this year of £4,400,000 will not supply a great number of fighters or bombers, or ships or Army equipment. Quite clearly, an increase of £4,500,000 in a year, if that were all that were available for such equipment, would not provide a great deal of it; but that is not all. Year by year 15 per cent, to 20 per cent, of the total defence vote has been available for new equipment. That will continue during the present year, and in addition some of the increase in the defence vote this year will be available for that purpose.

Too often does one stand here, and in other places, and hear the question asked: What has Australia received for the money that has been expended on defence over the last ten years Too often we are told that £1,800,000,000 has gone on defence over a decade, and too often we are asked: “ What is there to show for it? What benefit has Australia got? “ That seems to be a reasonable question and one that needs an answer, until one remembers that an army, an air force or a navy is in the same position, in some respects, as an individual. During a year it needs to live; it needs to eat: it needs to be equipped; it needs to be transported; and it needs to be warmed. Those things account few an immense proportion of a vote for defence. If one can say to an army, “ You have had so many millions of pounds over the last ten years. What have you got to show for it? “, one is equally entitled to say to a politician, “ Over the last ten years you have eaten ten tons of meat and twenty tons of potatoes and you have drunk goodness knows how much water. What have we got to show for it at the end of that ten years except an ageing and obsolescent politician “ That follows the general argument that has been put before us.

Apart from bearing in mind the wars that have been fought by Australian forces in Korea and in Malaya, one must remember the maintenance requirements of the Army, the Air Force, and the Navy - a force in being greater than Australia has ever known before. One must remember that there has been provided for this force in being, nol great amounts of equipment, not amounts which would enable Australia, by itself, to fight a war, but better and more modern equipment in greater quantities than we have known before - quantities sufficient to help Australia make a contribution to a common effort.

Now, Sir, I want to turn to the Budget itself. Before I deal with the proposals in the Budget which have received no criticism and no attack from the Leader of the Opposition, I will deal with one or two proposals which have received criticism and attack. The Leader of the Opposition quoted to-day a statement, allegedly published in a Returned Servicemen’s League journal, to the effect that some members of the R.S.L. had met and had passed a resolution protesting against the callousness of the proposals for benefits to returned soldiers. I believe, Sir, that I am entitled to say that spokesmen for the R.S.L. throughout Australia made it perfectly clear that their first objective was that service pensioners should be given free hospital treatment for non-war-caused disabilities. They made it clear, as spokesmen for their organization, that that was their first objective, and that has been conceded to them in this Budget.

I heard no criticism from the Leader of the Opposition of the proposal that the means test should be really liberalized this year and that. I think for the first time, a real concession should be given to those who through thrift and industry throughout their lives, have managed to accumulate some property on which to retire. From now on, a person will not be debarred because he has saved and owns some property. He will merely be deemed to earn from that property £1 for every £10 worth of property that he has. He will thereby be saved from the necessity to sell or squander the property in order to become a charge on the public purse. He will be able to keep his property and pass it on to his descendants. There will be a reduced demand on the public purse, because the person concerned will be able to keep his property without being penalized and, at the same time, draw a pension. I have heard no criticism of that. 1 have heard no criticism to the effect that import restrictions should not have been removed, or that imports should not be allowed to compete with the products of protected industries, some of which, up till now, I believe, have used the fact that they were protected to keep the prices of their products higher than they would have been had there been full competition. If the removal of import restrictions has the effect of providing competition - competition which is not complete, because there is still tariff protection for Australian industries - and leads to a fall in prices, as has already been the case in some instances, surely that is a positive contribution to the battle against the inflation which so worries the Leader of the Opposition. Only at the very end of the honorable senator’s speech did I hear any criticism of the extent of the rise in social service pensions.

Senator Sheehan:

– That speaks for itself.

Senator GORTON:

– That was such a reversal of form that the absence of criticism did not speak for itself. On previous occasions, such criticism was vociferously voiced by members of the Opposition in most of the speeches they made, and for that reason I believe this aspect has not bulked largely as a means of attacking the present Budget.

There was the same lack of criticism when the Leader of the Opposition (Mr. Calwell) spoke last night in the House of Representatives. I have not heard any suggestion that payments to the States should be reduced. An agreement was reached last year which gave to the States the best deal that they have had in their history, in that it gave them’ not only an increased amount of money, but also, for the first time, the knowledge that, year by year, the allocation would be increased if their popu lation rose. This meant that they would be able to meet increased costs of servicing a greater population. Indeed, for the first time the States got a deal which promised them that, should the general level of prices rise, they would receive from this Government compensation, not merely equal to the amount by which their expenses rose as a result of rising prices, but equal to that amount, plus 10 per cent, of it. Surely, that was a significant contribution to the ability of the States to service increasing populations and to meet the demands of education and development, about which we have heard so much in the past from the Opposition in this Parliament and about which the present Government has done so much, both in the Budget now before the Parliament and in the previous one. I suppose it was for that reason that the Government’s actions were not criticized by the Leader of the Opposition to-night.

I sum up my comments on the Opposition’s attack on the Budget to-night by saying that the concessions which have been given were not attacked, nor were the increases to assist the States resisted. No specific proposals were put before the Parliament for attacking what the Leader of the Opposition regards as inflation out of control. All that we had placed before us were broad generalizations to the effect that this Government, or any other government in Canberra, should be given power through its bureaucracy, its Executive and its Public Service to reach into the economic life of every Australian individual and control it in detail, with no indication of how those controls would be used. If ever that kind of unrestrained and unrestricted power were reposed in a political party in this place, one of the first results would be the engendering overseas of such a lack of confidence in this country that the capital inflow which is coming to Australia now would cease immediately. Whether or not we regard that capital inflow as a good thing, it is incontrovertible that if it stopped coming we would face an immediate and an acute crisis involving massive unemployment throughout the country and a complete cessation in the development on which Australia relies, not only for economic security but also for political and material security.

If such complete and utter power over all aspects of industrial relations were to be vested in a political party in this place, I believe that the wages to be paid to workers throughout Australia would immediately become a political football. If that happened, and political parties went to the polls and attempted to bid against each other on the question of how much per week should be paid to workers in this trade or that, we should immediately run into crises of unemployment and misery. In spite of the difficulties which have been with us for ten years, and which have been met, this country is set fair economically. Our population is growing. Our resources are developing. For the first time, really, a full material life is being provided for 99.9 per cent, of the population. I think that Australia can continue to do that and to supply, not only a full material life, but also the inner satisfaction that a man derives from being able to build his own life in his own way. That is possible only if the controls suggested in every field by the Leader of the Opposition are resisted. When we had such controls, admittedly we did not have inflation, but neither did we have employment, goods and development.

Senator COLE:
Leader of the Australian Democratic Labour Party · Tasmania

– When one listens to what people are saying about the Budget, one wonders whether a budget really has been presented. It has hurt no one but it has helped no one. This year’s Budget is more of a psychological budget. It will be recalled that before it was presented there were rumours of increases of the excise payable on spirituous liquors, beer and cigarettes. The purveyors and the consumers of those commodities were so thankful when they learned that extra excise would not be payable that they forgot to criticize the Budget.

This Budget has not made any impact on the people or done anything to advance the development of Australia. It contains no incentive whatever. Being a young nation, we need an incentive to continue the work of development. Development means everything to Australia. One thing that must be conceded is that the presentation of this Budget is an attempt to check inflation. The Government’s action in bringing forward such budgets for some years now flows from the silly promises that were made in 1949 to put value back into the £1. and from the fact that the Opposition has made the Government a little frightened of the word “ inflation “. If Australia is to develop, we must expect a certain degree of inflation. For us as a nation to maintain the status quo is too dangerous. There can be no standing still in the process of development, but that is just what the Budget is designed to achieve. It has been designed to keep the country going, but it does not furnish an incentive for greater expansion.

We have too little time at our disposal to be able to afford to leave things as they are. If ours were a settled country like England, where there is very little room for expansion, perhaps we could afford to design a budget like the one we are now considering. But Australia is a young country with a sparse population and with large areas to be developed, and we just cannot afford to be frightened by the word “ inflation “ and to hold the economy where it is. We must strive for rapid expansion. I repeat that this Budget will not help us in that direction.

We are confronted by dangers from outside the country. We fear invasions from Communist countries to our north. We have huge tracts of land to develop, and we must fill this country with people. Let me say again that this Budget fails to rouse the enthusiasm of the people and to provide them with an incentive to develop the country. The Government, which is in control of the affairs of Australia’s small population of 10,000,000 persons, must give a lead. If it gives a lead, private enterprise will follow. Let us not be afraid of the word “ inflation “. If we are to progress, there must be a certain amount of inflation. But when inflation does occur, the Government must ensure that certain people in the community are not left behind in the race.

I now invite the Senate to consider the taxation aspect of the Budget. There is to be a rise of 5 per cent, in income tax. I do not believe that that increase will do any great harm to the people of Australia. In fact, it is my opinion that until the time arrived for them to complete their taxation papers 80 or 90 per cent, of the people were not aware of the fact that last year they were given a rebate of 5 per cent. The proposed increase of 6d. in the £1 in company tax is nothing to worry about. In view of the way companies are expanding and in view of the dividends they are able to pay as a result of the work of their employees, I should say they can well afford to pay - or repay, if one likes to use that term - the extra 6d.

Senator McManus:

– They could pay more.

Senator COLE:

– They could pay a lot more and still not be harmed to any great extent. Direct taxation as we know it in Australia is about the only fair method of raising revenue. It is about time we got rid of such insidious taxes as the pay-roll tax and sales tax, which greatly affect the person who should be protected - the family man. Perhaps some one will ask, “ Where will you get the money if you do away with those taxes? “ I point out that at the present time they are being paid by the people. There is only one fair way in which they can be replaced and that is by imposing direct taxation. I should say that the Government would save millions of pounds a year in the administration of its taxation laws if it abolished those forms of taxation.

Senator Marriott:

– Would the honorable senator abolish sales tax?

Senator COLE:

– I would abolish sales tax and the pay-roll tax and replace them with direct taxation on a graduated scale.

Senator Marriott:

– It would hit the working man.

Senator COLE:

– It would not hit the working man at all because generally speaking the working man is a married man with children and he pays little or no direct tax at present. I am speaking of the average wage-earner in this country.

Senator Gorton:

– If he has a wife and two children he pays £20 a year.

Senator COLE:

– He does not even pay that much tax.

Senator Marriott:

– He would pay a lot of income tax if sales tax were abolished.

Senator COLE:

– That is the fairest way. At present taxation is hitting the people who can least afford to pay it.

Senator Laught:

– Surely he does not pay pay-roll tax.

Senator COLE:

– He is the one who bears the burden of pay-roll tax because it is passed on to the workers. The man with a wife and children is the person who is paying these insidious taxes. The average wage- earner does not pay much direct tax. An honorable senator said he pays round about £20 a year. If he has a family he receives more in child endowment than he pays in income tax. The taxes of which I have complained should be abolished because they are hitting at the family man, and it is time the Government realized that. I know that approaches have been made to the Government from many quarters in respect of payroll tax, because it increases prices that the family man has to pay, and in respect of sales tax. I believe it is time the Government resorted to the fair method of taxation, which is direct income taxation.

Senator Hannaford:

– Why did Mr.

Scullin introduce sales tax?

Senator COLE:

– I am not worried about who introduced sales tax; I am just telling the Senate what should be done now.

While I am speaking about increases, I should like to deal with social services. It is proposed to increase pensions by 5s., but that is a very meagre increase indeed. It is a sop to the pensioners. It does not even make up for the cost of living adjustments which could have been made to pensions over the year. It does not improve the value of pensions at all. If we had been supported by the Australian Labour Party at various times when we have asked for cost of living adjustments to be added to pensions, pensioners to-day would be in a much better position than they are. even with an increase of 5s.

Senator Kennelly:

– Do you not remember that pensioners did receive cost of living adjustments, and that at their own request the system was abandoned?

Senator COLE:

– What pensioners?

Senator Ormonde:

– The pensioners’ organization.

Senator COLE:

– I shall come to the pensioners’ organization in a moment. This increase of 5s. amounts to a large sum of money out of the revenue of this country. The practice of granting 5s. or 7s. 6d., and then being called all the names people can think of because you do not make the increase 10s., is becoming quite old fashioned. It is time we tried to bring some reality into our social services.

An increase of 5s. is proposed. Maybe that 5s. would have been 7s. 6d. but for the pensioners of this country having made what I believe was a very bad mistake. In the Bendigo by-election the Combined Pensioners’ Association was foolish enough to attach itself to a political party and by so doing pensioners may have lost 2s. 6d. a week. The increase might have been 7s. fid., but now the pensioners have lost any political power they had by affiliating themselves with a political party. I know that the Combined Pensioners Association is becoming an instrument of the Communist Party. I can understand that because the president, Miss Marjorie Nunan is a well-known Communist.

Senator Ormonde:

– You are speaking of Victoria?

Senator COLE:

– Yes. She is the president of the association, and I am afraid these poor people are being used for political purposes. It is time they realized that the only people upon whom political pressure can be brought to bear for the benefit of pensioners would be the Opposition if it were the government.

Senator Marriott:

– Why not the Government?

Senator COLE:

– For the simple reason that 80 per cent., or maybe 85 per cent, of pensioners vote Labour and not Liberal.

Senator Marriott:

– You are kidding yourself there.

Senator COLE:

– At the present time 85 per cent, of pensioners vote Labour.

Senator Wright:

– Certainly not.

Senator Anderson:

– You are not suggesting that the Government paid any regard to that in deciding to increase pensions?

Senator COLE:

– I am saying that to-day 85 per cent, of pensioners would vote Labour, not Liberal. If a gallup pole were taken I think it would show that the figure is not too far out. By affiliating themselves with a certain party-

Senator Marriott:

– Are you saying this just because they left you?

Senator COLE:

– I am not talking about myself at all; it has nothing to do with me. I am just saying that they affiliated themselves with a certain party in a by-election and so have lost any political force they had. They did that in a by-election. Had they done it in a general election there may have been some sense in it. These poor people have been led astray in this way. 1 am afraid they will not receive much support from the Labour Party because, although in the Bendigo by-election mention was made of the fact that the Labour Party would support a pension at the rate of half the basic wage, I notice that in an article which has been published in the “ Pensioners’ Right “ the Labour Party has been taken to task and a scheme has been proposed whereby the pension would rise to only £5 14s. That is not much more than the Government is to provide this year. The means of providing pensions for the people are quite outdated, and it is about time the Government introduced a national insurance scheme. Such a scheme is the only means by which pensioners of the present and the future can receive justice. I noticed that Mr. Reece, the Premier of Tasmania, came out very solidly in favour of such a scheme, and I am very pleased to learn that he is at last copying our policy. I have mentioned this matter in four succeeding Budget debates. I am afraid that the recommendations of the federal conference of the Australian Labour Party are not in accordance with Mr. Reece’s ideas, because its policy is that national insurance schemes as alternatives to the present pensions scheme should be opposed root and branch as they represent an unfair taxation system and increase inequality in the distribution of the national income. I can see that Mr. Reece will be in trouble with his own party.

A national insurance scheme would allow reasonable pension or superannuation payments and would enable the housing lag to be overtaken. A person starting work at eighteen or twenty years would pay into the scheme and acquire an equity increasing until, when he reached 65 years of age, it would be about £5,000. Upon his getting married at about 25, the Government could lend him money, on the security of his equity, to enable him to buy or build a house. He could repay that advance, with appropriate interest, over the 40 years that he would continue to be a wage-earner; and when he reached 65 years his equity under the national insurance scheme would be preserved intact.

Senator Kendall:

– He can do that through an ordinary insurance company.

Senator COLE:

– That is so, but this would be a national insurance scheme and it would overcome our housing problem almost overnight.

Senator Marriott:

– At what age would a person start to contribute?

Senator COLE:

– When he started work.

Senator Mattner:

– What would the weekly contribution be?

Senator COLE:

– The amount to be paid in and the amount to be drawn out cannot be given off the cuff. If the honorable senator will come to my room, I shall give him a lesson on national insurance. Such a scheme is essential if justice is to be given to pensioners and the means test, which is causing a great deal of trouble, is to be abolished.

In the not-far-distant future the Government must do something about an anomaly in social service benefits. It will be remembered - I understand under pressure from the British Medical Association - that the Government passed an act providing that if a single pensioner had an income over £104, or if a married pensioner had an income over £208, he would be ineligible to receive free medical and hospital benefits, although he would be entitled to receive a full pension.

Senator Kendall:

– That will be changed under this Budget.

Senator COLE:

– No. The Budget provisions have nothing to do with it. I refer to the medical and hospital benefits of a pensioner who is on superannuation. A superannuation benefit of £4 is very little today. A great number of persons who worked in the railways and who took only eight units of superannuation receive £208 a year, although some looked ahead and took ten units. A railway man in Devonport took eight units, which entitled him to £214 10s. a year, which is £6 10s. over the limit to qualify for free hospital and medical benefits. Not long ago he was unfortunate enough to have to undergo a serious operation, which cost over £200.

Senator Anderson:

– He could contribute to a medical benefits fund in the normal way; he would not get the benefits for nothing.

Senator COLE:

– Although he is a full pensioner, he has lost all his medical benefits.

Senator Marriott:

– He could subscribe in the normal way to a benefits scheme.

Senator COLE:

– He should not be required to do so.

Senator Laught:

– The line has to be drawn somewhere.

Senator COLE:

– The line should be drawn, if it is drawn at all, having regard to the income he is permitted to earn in addition to his pension. It should not be drawn at the £4 a week level but at the £7 a week level. That pension anomaly should be cleared up very quickly. The rate of pension for totally and permanently incapacitated pensioners has been increased, but the Government should allow the wives of T.P.I, pensioners to obtain free medical attention. Many of these women have spent a lot of time and energy in looking after their husbands and in so doing have become ill themselves. Despite that they are not entitled to free medical attention. I am sure that the Minister concerned would like to provide free medical attention for the wives of T.P.I, pensioners if the Treasury would permit it.

A little while ago I spoke about the family man - the forgotten man as far as all budgets are concerned. One way in which we can do justice to the family man is by increasing the rale of child endowment. Child endowment has not been increased for many years, despite the fall in that time in the value of money. I have already said that I am not afraid of inflation provided that child endowment keeps pace with rising costs. Child endowment is the only way in which the wage-earner with a family can receive justice. Under our wages system it is very difficult to differentiate between a married man and a single man. The only way to help a married man is through child endowment. I hope that the Government will give serious consideration to this matter and will take some action along the lines of my party’s policy. It is not necessary for me to repeat our policy here because it is well known to-day throughout the length and breadth of Australia.

Senator Marriott:

– Do you know what implementation of your policy would cost?

Senator COLE:

– Yes, I know that, but I do not have time to deal with that aspect to-night. It is time that people in receipt of superannuation received an increase in the value of their units Most people in receipt of superannuation are former employees of Commonwealth departments. The Government should raise the value of superannuation units. These people also are in need of help in these days of inflation. Give them a chance. However, if superannuation payments are increased I remind the Government that a person in receipt of more than £4 a week by way of superannuation would lose his hospital and medical benefits. That matter would have to be dealt with before superannuation were increased. Many people in receipt of superannuation, particularly former railway employees, are on eight units and any increase in their superannuation would mean that they would cease to obtain free medical and hospital attention.

I turn now to the defence of this count y. Defence is vital to us and to the people who will follow us. We do not want wasteful expenditure on nuclear weapons. What we need are efficient conventional weapons that would be used if we were attacked. I believe that a nuclear war is very far distant. If we did engage in a nuclear war it would not matter much whether we were prepared for it or not. We in this country do not have the productive capacity nor the wealth necessary to arm ourselves for nuclear warfare. Any war in which we become engaged will be a localized conflict in which conventional arms will be used. The Government should concentrate on conventional methods of training and the use of conventional weapons.

The civilian population should be trained in the action that it should take if a nuclear war did eventuate. That is as far as the Government should go with regard to a nuclear war. lt should provide finance for the States so that the civilian population may be trained in the steps that it should take in the event of nuclear warfare. If a nuclear war did break out the civilian population would suffer most. Whether civilians take correct precautions could determine whether we perish from the face of the earth or not. I appeal to the Government to set up a central administration in civil defence which could assist the States in their civil defence programmes.

One of the most important aspects of defence is internal defence. The position in Australia to-day is such that the Commu nists could take over almost at will. The Government will do nothing to stop Communist take-overs in various sections of the community. For example, in Canberra itself a fight is taking place between the Building Workers Industrial Union, which is Communist controlled federally, and the Amalgamated Society of Carpenters and Joiners. The Building Workers Industrial Union is not registered with the Commonwealth Arbitration Court. The Amalgamated Society of Carpenters and Joiners is a nonCommunist controlled union. Members of that union cannot enter the Australian Capital Territory as unionists because the B.W.I.U., which is affiliated with the Trades Hall, will not allow them to become members of its organization. Before a person is allowed on a building job he has to become a member also of the B.W.I.U., otherwise a strike will be called. This is happening right in the Government’s own Territory where it supervises the letting of contracts. For that reason 1 say the Government is doing nothing about the internal defence of this country which to me is the most important aspect of defence right at this moment.

The Government will not act on political levies. It would not act in the Hursey case when it could have done certain things. It has not acted on the report on indemnity payments which were thoroughly examined by a Senate select committee. No action has been taken on the recommendations that were made by the Petrov commission. No wonder the Communist element in this country is, as it were, simply fingering its nose at authority. This Government is not doing anything about the Communists. I hope that when we bring in a bill dealing with political levies the Government will support it. I hope that it will at least give some support for this internal fight for the defence of Australia against its Communist enemies.

Senator Anderson:

– What do you mean by saying, “ When we bring in a bill “?

Senator COLE:

– A private bill will be brought in dealing with political levies. If the Government will not bring it in, we will.

Another subject of the Budget with which I wish to deal is development in Australia. I know that we have a great Minister for National Development. I should like to see him given full power to go ahead. He is a visionary who looks into the future. He has capabilities, but he seems to be hampered in carrying out his ideas, lt may be that he is hampered because of lack of money, but I should like to see him given full control in this respect. The development of Australia calls for greater immigration, lt is absolutely essential that we bring into this country more and more immigrants. We have not the time or the numbers to build up by natural increase our population sufficiently rapidly to meet our requirements. We need migrants to help us in our expansion. Let me take Tasmania as an example of a State where we have prospects of great expansion. An overseas mission led by the State AttorneyGeneral reported that the prospects of expansion in Tasmania are very bright. In the not far distant future tremendous expansion will take place in the paper industry in the Huon Valley and the Mersey Valley, where millions of pounds will be spent. We do not want to find that we have no people to fill the jobs that are offering. Tasmania has been forgotten to a great extent as far as the immigration plan is concerned. We need immigrants for the development of Tasmania, just as Australia as a whole needs them.

Our development is taking place in the wrong direction. It is centred in the big cities.

Senator Kendall:

– That does not apply in Queensland.

Senator COLE:

– Queensland is a tremendous State, and I know that its less populous areas are being developed. I hope that State’s development will continue on those lines. I am referring to Melbourne, Sydney and other centres where industries are being developed with the result that tremendous problems in regard to transport and the supply of food are arising. It is about time that the Government took action to transfer industries from the cities to country areas. There is only one way in which that can be done, and that is by establishing the financial and economic climate to induce industries to go to country areas. This could be done if the Government were to tax factory and industrial sites in the cities and provide cheaper factory sites in the country. This would allow for the differentiation of costs in the city and the country and would help to provide the right economic climate for the development of country areas. Factory sites should be taxed first, and later commercial sites could be treated in the sameway.

I shall deal now with the subject of Housing. Once again the Government has made provision for housing finance for theStates. I wish to speak particularly of the provision in respect of co-operative housing societies. By this means the Government is supplying the answer to the problem of providing our young people, and those not so young, with homes. Senator Spooner should be congratulated on what he has done in this field. As we know, 30 per cent, of the money allocated to the States for housing has to be set aside for cooperativehousing society purposes. In Tasmania, of course, the co-operative housing societies are not receiving all that money; a lot of it is being used by the Agricultural Bank. We hope that when the housing agreement, is next reviewed, the money that is at. present going to this bank for housing, purposes will be channelled into its correct, place, that is, the co-operative housing field.

From time to time reference is made to the provision of money at low rates of interest for housing. There is one aspect of that matter that I should like to place before this Parliament. Earlier this evening, the Leader of the Opposition (Senator McKenna) dealt with the matter of charging the States interest on money that they borrow from the Commonwealth. A similar thing is happening with money for housing. 30 per cent, of the money granted by the Commonwealth to Tasmania for housing purposes is ear-marked for co-operative societies, this money is handed over by the Tasmanian Treasury to the Agricultural Bank, and merely for handing over the money to that bank a charge at the rate of one-half of one per cent, is imposed, thus raising the interest rate from 4 per cent, to 4i per cent. This transaction involves only the handing over of the money. The Agricultural Bank then passes the money over to the co-operative societies, which it charges interest at the rate of one-quarter of one per cent.. Therefore, interest at the rate of three-quarters of 1 per cent, on the amount involved goes to the State Treasury.

Senator Kendall:

– Is the Agricultural Bank a State bank?

Senator COLE:

– Yes. Over a period of 31 years, the additional charges payable by home builders amount to a considerable sum of money.

Mr. President, this Budget has caused hardly a ripple on the surface of the Australian economy. It is a hold fast budget, which has not given to the people of this country the incentives that we hoped would be given. I suppose that we can look forward to a more energetic budget in 1961. We hope that it will be a budget that Wl. give greater benefits to all sections of the community, particularly family men and those in receipt of fixed incomes. 1 hope that the Government will keep in mind some of the things I have mentioned tonight, with a view to incorporating them in its next budget, so that the people of Australia will get a fair deal all round and, most important of all, so that Australia will progress and develop at a very fast rate in a very short period of time.

Senator LAUGHT:
South Australia

– I rise to support the motion for the printing of the Budget Papers. I should like to congratulate the Treasurer (Mr. Harold Holt) on the Budget which, after many months’ deliberation and consideration, he introduced in another place, and copies of which have been circulated amongst us. I notice that Senator Cole is about to leave the chamber. Before he goes, I should like to congratulate him on his thoughtful contribution to the debate, which lasted over SO minutes. I shall not attempt to follow him down every lane that he traversed in his discussion of the Budget, but I was rather interested to notice that he, on behalf of the Australian Democratic Labour Party, did not advance any forceful arguments about how the prosperity of the country is to be sustained or increased. He dealt mainly with a redistribution of the money that private enterprise earns. I thought that some of his ideas for redistributing this money were most interesting, but rather extravagant.

One of the honorable senator’s suggestions that intrigued me was that the pay-roll tax and the sales tax should be completely abolished. In one hit, the honorable senator would abolish these forms of taxation, at a cost to the revenue of £240,000,000 a year. Of course, that amount would then have to be raised, as the honorable senator admitted when replying to interjections from this side of the chamber, by income taxation. In order to make up that leeway, the income tax payable by individuals would have to be increased by 50 per cent. As I have said, Senator Cole expressed some grand ideas for distributing money, but I was rather disappointed when he did not voice any practical ideas for raising the money or for increasing the national income so that money would be available for the schemes he propounded.

Sir, this Budget is quite an interesting one. One can detect in it attempts to guide the broad trends of the economy in the direction of well-established goals. Obviously, we want to ensure a continuing growth of population in this country. Since the previous Budget was introduced, the population has increased by 300,000 persons. By 1970, we hope that Australia will have a population of 15,000,000 and, consequently, an increased industrial potential.

The Leader of the Opposition (Senator McKenna), in his address earlier this evening, referred extensively to the conditions that obtained in this country when the late Mr. Chifley was Prime Minister. As is well known, Mr. Chifley vacated office towards the end of 1949. Senator McKenna indicated that he was wedded to the economic structure of that time. Let us consider the development that has taken place since 1949. The facts are really exciting. In 1949, the average weekly earnings in Australia were merely £8 18s.; today, the average is over £21. Savings banks deposits have doubled since 1949, and what is also very important is that the amount of savings through insurance has virtually trebled. The savings banks deposits are equivalent to an amount of £145 for every individual in the country, South Australia leading with an average of about £170 per head of population. In 1949, I believe that approximately one person in seven owned a motor vehicle; to-day, approximately one person in four owns a motor vehicle. In 1949, one person in ten had a telephone, compared with one person in five to-day. It is rather interesting to note that air-conditioning units are now being made in Australia at the rate of about 60,000 a year. The number of houses and flats in Australia has increased by 30 per cent, in the last ten years. What is more important - I know that this is disappointing to the Opposition, in view of the theory that was propounded by Mr. Dedman, who was a Minister in the previous Labour Government - is that in 1947 54 per cent, of the homes were owned or being purchased, compared with 75 per. cent, to-day.

We are proud of the development that has taken place in this country, which has been accomplished on the basis of Budgets like the one that we are considering tonight. The preceding nine Budgets introduced by this Government brought about an economic climate conducive to the achievement of the staggering and exciting results that I have mentioned. There is virtually full employment in Australia at the present time. Assuming that there are 40,000 unemployed, we know that there are far more than 40,000 vacancies to be filled. Forty thousand unemployed, in a work-force of approximately 4,000,000, means that only about 1 per cent, are unemployed.

The Budget is in key with the economic climate that exists at the present time. It is interesting to note, however, that the Government is keeping a very close watch on the economy. In October last, the Prime Minister (Mr. Menzies), ever a watchful individual, decided on three or four basic moves which have shown excellent results in the period since then. You will remember, Sir, that the Government decided to intervene in certain proceedings before the Commonwealth Conciliation and Arbitration Commission because, in its wisdom, the Government considered that the economy could not digest the recently awarded margins and basic wage increases. That was a courageous and proper move, in distinct contrast to the recent action of certain Labour governments in the States in intervening in court proceedings for the purpose of attempting to introduce a 35-hour working week in important industries, particularly the coalmining industry in New South Wales.

The Government has virtually removed import licensing, and industry now has the widest scope for expansion. We see important new machinery coming to Australia to help boost production. In this respect,

I am disappointed that the Government has not seen fit to allow the Ligertwood committee to consider the question of depreciation allowances for industry. Alternatively, something might have been done about that matter in the Budget now before the Parliament. I admit that the Government has considerably increased depreciation allowances, particularly those affecting primary producers, but it has done nothing in the Budget to provide for depreciation allowances in respect of buildings in which the new machinery that I have mentioned is being housed. It is interesting to note that the Budget makes provision for increased depreciation allowances for certain types of buildings erected by primary producers, but there is still something lacking in the Government’s thinking with regard to depreciation on buildings used in industry generally. I am sorry that the Ligertwood committee has not been permitted to inquire into this matter.

I come now to the depressing subject of speculation in land, particularly suburban land, which was referred to in the Senate during question time’ this afternoon. I understand that this Government has no power to control the buying and selling of suburban or sub-divided land, but I think it could exercise a very powerful and wise influence by calling together the State Attorneys-General or Ministers for Lands, as the case may be, and discussing with them the important problem of suburban sub-division. This matter is affecting the Federal Government here in Canberra, as a question that was asked this afternoon indicated, and it also affects all the State governments. I was interested to hear an announcement that the Attorney-General of South Australia was taking the matter up with the South Australian town planner to ensure that before land is made available for sub-division in that State the subdividing entity deposits with the Government the capital cost of certain services, such as roads, water, sewerage and electricity. By providing that the capital moneys that a State government normally has to find shall be provided by the person who desires to sub-divide, a curb will be placed on sub-division. That could well have the effect of keeping in check one of the factors which make the building of new homes such an expensive proposition to-day.

The Federal and State Governments could confer on such important matters, as the State Attorneys-General and officers of the Commonwealth are conferring on company legislation, with a view to having each State pass the same kind of legislation and, in that way, attempt to cope with a problem that has got somewhat out of control.

In answer to the question whether the Budget guides the economy in the right direction, I say, yes, although I propose at a later stage of my speech to explain why I think the emphasis is in not quite the right place. We must remember that we are living in a fast-changing world. Two and a half years ago there were approximately 80 nations comprising the United Nations. To-day there are well over 100, if we include forthcoming adminissions. Two years ago, Belgium was a vast colonial power in Africa. To-day, it has not a colony left. The history of the world is changing, almost from month to month. Consequently, I think that the Budget, with the delicate touches that the Treasurer (Mr. Harold Holt) has applied here and there to matters of taxation, is in keeping with the fast-moving times in which we live.

Senator McKenna clamoured somewhat for alterations of the Constitution. He stated that the Constitutional Review Committee had made certain recommendations. My recollection of the recommendations is that the committee was pressing for a unitary system, rather than for a federal system such as that which we have enjoyed for the last sixty years. It appears to me that the sovereignty of the States would become meaningless if the controls suggested by Senator McKenna were imposed. I suggest that, if the Australian Labour Party were to press the vast constitutional changes to which Senator McKenna referred, it would be confronted with the great problem of having those changes approved by the people. They would have to be approved by a majority of the people in Australia and by a majority of the people in a majority of the States. So, four of the six States would have to be behind the changes that have been suggested. My prediction would be that the proposed changes would not be accepted.

One of the significant aspects of the Budget is the provision for payments to the

States. Year after year the State Treasurers complain about the amount of money that is allotted to the States. But this year no State Treasurer could fairly complain. From Consolidated Revenue there will be paid to the States a sum of £350,000,000, which is an increase of £30,000,000 or nearly 10 per cent. Moreover, the States will get an additional £2,000,000 for their roads programmes and State universities will get an extra £3,500,000. The allocation for universities will rise from £7,500,000 to £11,000,000. Loan council raisings will total £230,000,000 - an increase of £10,000,000. This money will be utilized for State works and housing. So it will be seen that the Budget makes generous provision for the States. The Government, by recognizing the sovereignty of the States and their needs for education, water supply and other services, has displayed a very great interest in their welfare. It should be remembered also that this Government has to carry the responsibility for imposing income tax and for any shortfall in loan raisings.

Let us see what the States are doing with the money that is allocated to them. Being a South Australian, I have had a look at the documents that were recently submitted to the South Australian Parliament by Sir Thomas Playford, the Premier and Treasurer of that State. I am very proud of the fact that he expects to expend in South Australia this year £32,000,000 from loan raisings, including £5.000,000 for housing and electricity. That gives the lie direct to the baseless attacks that were made on Sir Thomas Playford in another place during the last session. The honorable member for Kingston (Mr. Galvin), the honorable member for Hindmarsh (Mr. Clyde Cameron) and other Opposition members attacked Sir Thomas and alleged that he was neglecting the welfare of South Australia by withdrawing from the Commonwealth Grants Commission scheme. The documents presented to the South Australian Parliament clearly show that South Australia is up and doing in relation to the additional money for which provision has been made in this Budget.

I wish to say a word or two about the increased benefit that will accrue to pensioners following the alleviation of the means test. It should be pointed out to members of the Parliament that in this Budget provision is made for the expenditure of £163,000,000 for age, invalid and widows’ pensions, £74,000,000 for child endowment, and £74,000,000 for composite health services. Let me give an illustration of the manner in which the amelioration of the means test will operate, particularly in regard to property. Prior to the presentation of this Budget, if a person owned property - 1 do not mean a house, furniture or motor car, but investments, money, shares or a second house - of a value of £200 or more, there would be an erosion of that person’s pension. If the value of the property was more than £2,250, the pension would be completely wiped out. But this Budget gives most imaginative treatment. It provides that if a pensioner is an elderly soul and receives no income from his property, he can still get a pension of £192 if the property is valued at £2,700. If the value of the property is £4,200, the pension will still be £42. The pension will not cut out until the value of the property exceeds £4,610. That provision could benefit hundreds of thousands of people throughout the Commonwealth. When the proposal is put into effect in a few months’ time pensions will rise in a marked way. The penalty for thrift that has been bedevilling the social services scheme since 1910 will largely be wiped out. The Government has been very courageous in taking this action.

Let me also remind the Senate of other social service benefits that this Government has introduced. I refer to the free milk scheme for school children, free medical and pharmaceutical benefits for pensioners, a living allowance for tuberculosis sufferers, and a national campaign that has had the effect of virtually wiping out tuberculosis, which twenty or 30 years ago was a dreadful scourge. It is well for honorable senators to recall that special contributions have been made to mental health services and that a constant fight has been waged by Commonwealth sponsored research organizations. It will be seen that this Government has a proud record in the social services field.

I believe, however, that there are a number of matters to which the Government could give attention. I shall mention one to-night, and I am very disappointed to note that no reference has been made to it in the Budget. It will be recalled that in last year’s Budget provision was made for rather dramatic increases in postal, telegraphic and telephonic charges. The Government certainly did some remarkably imaginative things. It made the airmail rate the same as the ordinary mail rate for the average letter. It introduced the Elsa system, which has been a great boon to country telephone users in particular. However, in the last Budget the Government promised that it would set up a committee to inquire into the method of keeping the Post Office accounts. Over the last twelve months, at question time I have been constantly inquiring about the progress of this committee. I am very disappointed that in the Budget and the documents presented by the Government in connexion with the Budget no reference has been made to the committee’s coming to a conclusion which has been acted upon by the Government.

So, in conclusion, I ask the Minister for Customs and Excise (Senator Henty) to urge upon the Government the desirability of introducing a system to keep the Post Office accounts in order. Over the last six or seven years this matter has been reported upon, first, in one of the early reports of the Public Accounts Committee, and then year by year in the report of the AuditorGeneral. Of course, last year the matter figured prominently in the Budget; but still there does not seem to be any set method of presenting the Post Office accounts.

I believe that until this vast organization, the greatest employer of labour in this country - the Post Office - has an accounting system which is clear, concise and businesslike, we as a Parliament shall not be thoroughly aware of the position with regard to postal services and proper charges for telephones, telegraph and so on. I support the motion for the printing of the papers.

Senator TANGNEY:
Western Australia

– Mr. Deputy President, I am a little sympathetic with the Treasurer because, like myself, in the last few years he has found the economy in a state of galloping inflation and, like myself, he has not been able to find an antidote to the inflation which has beset the nation. So he has brought down this Budget which has been received, even by his greatest friends, with the coolness which is typical of the contents of the Budget.

Senator Laught, who has just resumed his seat, said that the Budget had a delicate touch. I should say. it was really a bit sick. In another place the Minister for Trade (Mr. McEwen) said that the Australian economy was balanced on a razor’s edge. Therefore, in the Budget, the Treasurer has increased the sales tax on electric shavers. That is the kind of thought one has when one considers this Budget, because it is so disappointing, lt is a Budget which absolutely belies what the Government has been at great pains to make us believe over the years, that Australia is a nation enjoying great prosperity. Mr. Holt now tells us that because that prosperity has advanced too fast he has to apply the brake. The tragedy is that the brake is being applied to those sections of the community which can least afford to have it applied to them.

The Minister for the Navy (Senator Gorton) spoke about the lack of reference to the social service provisions in the Budgel in the speech of the Leader of the Opposition in the Senate. Senator McKenna dealt with the Budget as a whole, and left the particulars of it to be dealt with by the rest of the Opposition. I believe that particularly in the realm of social services the Government is deserving of the greatest censure. In a budget which deals with over £1,500,000,000, all that is granted to pensioners by way of relief is 5s. a week, less than 9d. a day, at a time when prices are rising so drastically that even the Treasurer is beset with all kinds of difficulties in trying to improve the situation. 1 am referring only to those pensioners who receive the basic pension and not to those who will gain by any amelioration of the means test.

Although this small sop has been given to some pensioners, there are others who are even worse off. In particular, there are the wives of invalid pensioners who are still expected to exist on the 35s. a week which has been their lot for some time. When one realizes that an invalid pension is not payable at all unless a person is at least 85 per cent, disabled, and the wife’s pension is not payable unless she stays at home to look after that pensioner and has no other employment, one can see how the standard of living of an invalid pensioner and his wife is seriously restricted, and it must almost be a crime against the State to expect them to live on a little over £3 10s. a week.

So, Mr. Deputy President, we intend to attack this Budget not only with destructive criticism but also, I hope, with constructive ideas, to show that we are not an irresponsible party making all kinds of wild statements because we happen to be in Opposition. We recognize that we represent an important section of the Australian community, and in the very near future we will be faced with the responsibility of government in this sphere.

In the words of the Treasurer himself in the prelude to the Budget, Australia is fast becoming a nation of speculators. Although speculation is one of the causes of the inflationary problem which besets Australia, nothing very much is being done in this Budget to curb that speculation. In order to curb the rash expenditure of pensioners and others in receipt of social service payments, in only a couple of cases is any relief given to them in the way of increased payments. . I commend the Government for what it has done in granting the extra allowance to totally and permanently incapacitated pensioners in the repatriation field. However, I also believe that the medical benefits in repatriation hospitals, which will be provided for veterans of the Boer War, are long overdue. The Government believes it is doing a great service in this regard, but I should like to ask the Government how many Boer War veterans are still in the community to take advantage of this offer at this time. For some years the Opposition has been endeavouring to have Boer War veterans regarded as worthy of repatriation benefits, and now, when the youngest of them must be at least 78 years old, the Government is claiming great credit for giving repatriation benefits to Boer War veterans, and is claiming that it is one of the really good things it has done in this Budget. I should say I could count them on the fingers of one hand.

Senator Henty:

– In Tasmania there are more of them than you have fingers on your’ hand.

Senator TANGNEY:

– I have not lived in Tasmania, and I am not referring to all Boer War veterans. I am referring to those who will be claiming these benefits.

I am also pleased to see that those veterans of World War I. who are receiving service pensions are to be entitled to receive treatment in repatriation hospitals, irrespective of whether or not their disabilities are war-caused. Why could not the Government go a little bit further and give medical treatment to all those who served in World War I. - a band of men which is rapidly decreasing - whether or not their disability is war-caused? Why not give all World War I. veterans the benefit of repatriation hospital treatment and medical treatment where necessary? It would be a great help to them. It would enable them to recover much more quickly from their illness in the company of their old comrades, or if they were not to recover, at least they would die in an atmosphere of peace in a repatriation hospital. Over the years I have received many requests from members of ex-servicemen’s organizations asking for medical treatment from the Repatriation Commission.

Debate interrupted.

page 212

ADJOURNMENT

Perth Airport

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Senator CANT:
Western Australia

– I rise to address myself to the report of the Public Works Committee that was presented to-day by Senator O’Byrne. It deals with Perth airport. The report is not bound to be adopted by the Government. There are three ways in which it may be dealt with, lt may be adopted and implemented; it may be left to lie or be put in a pigeon-hole; or the matter may be referred back to the committee for further report. I urge the Government to adopt and implement the committee’s report and to extend the facilities of Perth airport to the standard required by jet aircraft. The people of Perth, and of Western Australia generally, are entitled to that. Opportunities for the development of Perth will be severely restricted unless provision is made for an international .airport that may be used by jet aircraft. Evidence was given to the committee at Perth to the effect that Western Australia was being severely handicapped because businessmen would not use piston-engined aircraft. They want more modern aircraft and, as a result, when they come to Australia they go to Darwin and through to Sydney, Melbourne, or Adelaide, but not to Perth. In addition, as honorable senators are no doubt aware, in 1962 the Empire Games will be held in Perth. I believe that unless there is at Perth an airport capable of handling jet aircraft, visitors to the games will be limited and the State will not get the benefit of the advertisement to which the games will entitle it.

The committee reported that the extra cost involved in bringing the airport to the international, standard for jet aircraft would not be very great. Much of the work required for that purpose would in any case have to be done. The committee reported that the north-south runway, which is 4,810 ft. long, was inadequate in length for the Super-Constellation and Electra aircraft at present using the airport, but that it was adequate in strength for them. With overlaying and rolling it would be made adequate in strength, although inadequate in length, for big jet aircraft. If the north-south runway is to be put in order for Constellation and Electra aircraft, certain work will have to be done on it, and the extra work involved in making it suitable for big jet aircraft would not be very much. The committee stated that overlaying of the runways would have to be carried out, possibly within the next five years, even if big jet aircraft did not use the airport. Therefore, the work that will ultimately have to be done in Perth is being delayed for only a very short period.

An inter-departmental committee made recommendations, and the Government seemed to be frightened at the amount of money that would be required, according to that committee, to bring the airport to international standard. The Public Works Committee stated -

When the inter-departmental committee, set up to report to the Government on major civil aerodrome works, was studying the proposals for the Perth airport, the cost, additional to the £300,000 for the work suggested under the reference before your Committee, was estimated to bc approximately £750,000.

The main components to make up this figure were -

Extension of north-south runway from 6,500 ft. to 8,500 ft. . . . £185,000.

The committee came to the conclusion that the minimum length of runway required for a Boeing jet aircraft with a 25,000-lb. payload was 7,450 feet. So the length of runway recommended by the interdepartmental committee was somewhat greater than that required for this purpose and, as a consequence, somewhat more expensive to construct.

The committee estimated that road deviations would cost £160,000. That amount has been reduced to £35,000 because of the offer of the Western Australian Government to do the major part of that work. The Western Australian Government’s share of the cost of road-works will exceed by £5,000 the amount that the committee recommended for extension of the north-south runway to take Boeing 707 aircraft. Implementation of the recommendations of the inter-departmental committee would have cost the Government £1,030.000. The Government proposes to spend £450,000 on buildings and associated works to bring the airport terminal up to international standard. The cost of associated engineering works will be £280,000. Yet, even after that expenditure, the airport will not be capable of handling jet aircraft. The north-south runway will be 6,500 feet long and the north-east-south-west runway will be 6,900 feet long. According to Qantas Empire Airways Limited, a minimum length of 7,450 feet is required. The cost of lengthening the north-south runway and strengthening the north-east-south-west runway, which were the works into which the committee inquired, would be £300,000.

It is not certain that the Government will proceed with that proposition, but that was the matter that was put before the Public Works Committee, and upon which it reported. The committee has suggested, or at least implied, that the runways be brought up to international standard. The committee has reported separately upon the terminal building and associated works. If the two matters had been referred together to the committee, it would not have recommended one without recommending the other. It seems that the cost of the terminal building would not be warranted if the runways were not extended to conform to international airport standard. The additional cost of the airport over the amount of £300,000 which the Government was prepared to spend when it gave the committee authority to inquire into this matter will be £120,000. That sum is made up of £85,000 for extensions to the north-south runway and £35,000 for road deviations. That amount of £120,000 could well be exceeded. I think that the Minister for Civil Aviation (Senator Paltridge) knows that the committee found that if the improvements to the Boeing 707 aircraft do not reduce their take-off distance, it is possible that the runway will need to be extended to 7,900 feet. That would be done at an additional cost of £40,000. So the maximum amount that would be required to bring the Perth airport to international standard is £160,000 and the minimum amount is £120,000.

Qantas has said that it is only a possibility - not a probability - that the extra distance on the runway will be required. The views of Qantas are expressed by the committee in paragraphs 58 and 59 of its report in which it says -

  1. The representative of Qantas Empire Airways Ltd., expressed the strong desire of his company to operate jets through Perth, explaining that if the north-south runway is extended to enable Boeing 707 aircraft to operate with a load of 25,000 lb., his company would operate through Perth with jets by the beginning of 1962, by which time the existing fleet would be fitted with ducted fan engines.

Those are the engines which are expected to reduce the length of runway required by those aircraft. The report continues -

  1. He informed your Committee of his company’s estimate that it would cost £200,000 per annum less if two Boeing services were routed through Perth each week instead of operating a shuttle service with Super Constellation aircraft. Apart from the difference in cost, the need to provide a shuttle service between Sydney, Perth and Singapore is wasteful of aircraft lime.

So, if Qantas, for the expenditure of an extra £120,000, is able to operate through this airport, it alone will save £200,000 a year. The benefit to the Commonwealth

Government and the people of Australia would be very great over a period of years. The 25,000 lb. payload is the maximum for Perth airport because of an agreement between the airline companies. The committee refers to this matter in paragraph 42 of its report in which it says -

  1. The smaller payload of 25,000 lb. would give an acceptable and profitable commercial operation to Qantas. In any case, this figure is the maximum the company can carry between Perth and Singapore under the tripartite pool arrangement between Qantas, B.O.A.C. and Air India International.

The committee did not recommend an inferior air strip in order to obtain a smaller payload out of Perth airport. No matter what type of strip you have there at present, you would not be able to take out a heavier payload in the face of the agreement that I have just referred to. lt would be an asset to Western Australia to have this international airport before 1962 in order to assist in the organization of the Empire Games. In paragraph 73 of its report the committee states -

  1. Having regard to the facilities available in the Perth area, the whole of the civil engineering works proposed could be completed within a period of fifteen months from commencement of construction.

So all that remains now is for the Government to adopt the report of the Public Works Committee and set the machinery in mo:ion for the construction work to be performed. If this were done the Perth airport could become an international airport capable of accommodating jet aircraft by the time the Empire Games are h;ld in 1962. I urge the Government to adopt and to implement the report.

Senator VINCENT:
Western Australia

– I do not apologize for detaining the Senate at this late hour because this subject, besides being of importance to Western Australia, is of the greatest significance to the Commonwealth. I refer, of course, to the report of the Public Works Committee in relation to the establishment of an international airport at Perth.

Let me say a few words about the significance of such an airport to the Commonwealth. The geographical situation in Western Australia in relation to Asia and the Indian Ocean makes it clear that an international airport in Perth is imperative from a defence viewpoint. It is obvious to anybody who looks at a map of the Indian Ocean that Western Australia is of the utmost strategic importance in the defence of the Indian Ocean. Therefore, it is vitally important that Perth should have an airport of international standard. The Government should give most earnest consideration to the report and recommendations of the Public Works Committee.

Apart from the international importance of such an airport in Perth there can be little doubt that it would be of the greatest significance to the Commonwealth. Western Australia is a relatively backward State and its geographical situation means that its air transport needs are different from those of the rest of Australia. A modern international airport is a necessity for Western Australia.

Western Australia is embarking on an accelerated industrial and commercial programme. We look to the people of Southeast Asia for new markets. Our trade with those nations is increasing and Perth is the natural port for the shipping of produce, and also for communication with Asia and Africa. Western Australia’s growth industrially and commercially, apart from other factors, warrants early consideration by the Government of the establishment of an international airport in Perth. I am not unmindful of the work that the Minister for Civil Aviation (Senator Paltridge) has done in the past in relation to Perth airport. I know that he has the utmost sympathy with our claims, and I am certain that he will do all that he can to persuade the Government to carry out the recommendations of the committee.

Senator Cant referred to the cost that would be involved in bringing Perth airport up to international standard, but 1 do not think that cost is of any great significance when it is related to the importance of the project. In this modern age we must move with the rest of the world. Lack of an international airport in Western Australia will be a great handicap in the near future. I feel that it is a must so far as Western Australia is concerned. I therefore heartily support the recommendations of the Public Works Committee and earnestly hope that the Government will give very serious and sympathetic consideration to them.

Senator DRAKE-BROCKMAN:
Western Australia

– I, like Senator Vincent, think that this is a vital matter to Western Australia. We have a report presented by a committee composed of five Government supporters and four members of the Opposition. This committee went to Perth and took evidence on a number of days. After deliberating, it presented a unanimous report. I agree with all that Senator Vincent has said, and I therefore add my support to these recommendations. I hope that the Government will consider them in a very favorable light.

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

, - I very well comprehend! the enthusiasm of my Western Australian colleagues for any project which has to do with civil aviation in Western Australia, a State which comprises one-fifth of the entire Commonwealth. I comprehend their enthusiasm for this project because civil aviation has always played a remarkable part in the development of that State. It should never be forgotten that the first commercial airline in this Commonwealth was operated in Western Australia from Geraldton to Derby, and that that airline beat the famous Qantas into the field by something like nine or ten months. Ever since the establishment of that airline, air communications have meant possibly much more to Western Australia than they have meant to States on the eastern seaboard which are more closely settled. So, I look at this problem, and at the report of the Public Works Committee, with Western Australian understanding.

But, Sir, all these problems have to be regarded against a background of financial realism. Some of the things that the Government has to look at, apart from the attractiveness of establishing airports at any point in Australia, is the expense that is involved. Looking at the expenditure which has been incurred since the war, it is worth noting that this country has spent £40,600,000 on airports alone. On the provision of our remarkably efficient airways system we have spent something over £8,000,000. Other expenditure on the provision of assets associated with airports or airways has totalled £4,700,000, making a grand total of nearly £54,000,000 of this type of expenditure since the war ended.

Senator Vincent:

– Have you got a breakdown of those figures as far as Western Australia is concerned?

Senator PALTRIDGE:

– I have not the figures with me, but Senator Vincent prompts me to say that this Government’s expenditure - indeed that of post-war governments - in Western Australia on civil airlines has not at any time been meagre. On the contrary, it has been generous. Senators Vincent and Cant, particularly, will know of the establishment and maintenance of airports not only along the north-western coast but also at places in the north-western Kimberley areas remote from the coast. Even though I have not the precise figures before me, they will have cognizance of the expenditure incurred in the establishment and maintenance, particularly maintenance, of these airports in the post-war years. Senator Vincent’s question reminds me also of the continuing expense which the Commonwealth has incurred quite cheerfully and without complaints of any sort, in the standardization of airlines in Western Australia, and also of the most recent action of the Commonwealth in the provision of improved aircraft for operation in that State.

All these things indicate that the Government is alive to the particular needs of Western Australia for aviation communications. This Government has incurred considerable expenditure to upgrade the status of the Perth airport. The opening up of Cocos Island initially made Perth an important link in the international sphere. Negotiations undertaken by this Government with South Africa led to the establishment of the Qantas service to Western Australia and the reciprocal service conducted by South African airways terminating in Perth. I mention these things simply to indicate that the Government is not unaware of the importance of civil aviation to Western Australia, and has not neglected the development of civil aviation in that State.

The present plans for Perth envisage the expenditure of £1,100,000. The very interesting report submitted to-day by the Public Works Committee puts the proposition that by ah expenditure of a further £120,000, possibly rising to £160,000, that airport could be upgraded to full jet standard. All I can say at the moment is that the report has been submitted, that it will be studied with great interest, and that the Government will no doubt have a look at this proposal again in the light of the findings which have been presented by the Public Works Committee.

Question resolved in the affirmative.

Senate adjourned at 11.29 p.m.

Cite as: Australia, Senate, Debates, 24 August 1960, viewed 22 October 2017, <http://historichansard.net/senate/1960/19600824_senate_23_s18/>.

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