Senate
5 December 1960

23^rd Parliament · 2^nd Session

QUESTION
- AUTOMOTIVE SPARE PARTS
QUESTION
- DECIMAL CURRENCY
QUESTION
- HOUSING FINANCE
QUESTION
- ROYAL AUSTRALIAN AIR FORCE
QUESTION
- COMMONWEALTH DEVELOPMENT BANK
QUESTION
- CONSTITUTIONAL REVIEW COMMITTEE
QUESTION
- IMMIGRATION
QUESTION
- IRON ORE
QUESTION
- JAPANESE TRADE SHIP
QUESTION
- SALES TAX
QUESTION
- HOVERCRAFT
QUESTION
- WATER SCHEME FOR WESTERN AUSTRALIA
QUESTION
- TASMANIAN SHIPPING SERVICES
QUESTION
- MACKAY AIR DISASTER
QUESTION
- LEGAL SERVICE BUREAU
ORDER OF BUSINESS
AUDIT BILL 1960
- Second Reading
NATIONALITY AND CITIZENSHIP BILL 1960
- Second Reading
NATIONAL CAPITAL DEVELOPMENT COMMISSION BILL 1960
- Second Reading
INSURANCE BILL 1960
- Second Reading
INDUS BASIN DEVELOPMENT FUND AGREEMENT BILL 1960
- Second Reading
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1960
- Second Reading
BILLS RELATING TO SALES TAX
- Second Reading
CRIMES BILL 1960
- Second Reading
PROTEST BY A.J.A. TO P.M
ADJOURNMENT
CRIMES BILL 1960
- Second Reading
SPECIAL ADJOURNMENT

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 2.15 p.m., and read prayers.

page 1999

QUESTION

AUTOMOTIVE SPARE PARTS

Senator LAUGHT:
SOUTH AUSTRALIA

– I direct a question to the Minister for Customs and Excise. Has> the attention of the Minister been directed to statements which were published at the week-end and attributed to Mr. Neale, the secretary of the Motor Traders Association of New South Wales, and to Mr. Daunt, secretary to the Federal Chamber of Automotive Industries, which, in general, highlight the fact that Japanese car parts with pirated Australian trade marks could cause fatal motor accidents if used in the repair of certain popular Australian, British and continental cars? In the same statement, it was claimed that customs officers had seized thousands of pounds worth of Japanese products bearing false Australian trade marks. Will the Minister state whether his officers have so seized Japanese products? What were the products and in what circumstances were they seized? If breaches of customs and trade mark laws are being so committed, can the Minister cause to be published in Japan the wide powers of inspection and seizure of his officers? Is it not possible for inspection by the Minister’s staff to be made in Japan prior to export of any articles that are liable to be seized, as this would act as a future safeguard to prevent the parts being available for use in Australia? In addition to representations made through diplomatic and consular channels, could this problem be attacked by referring the matter to the Japanese delegation aboard the Japanese trade ship which is now in Australian waters?

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

Senator HENTY:
LP

– I think it is true to say that the number of nominated

British migrants coming to Australia is decreasing, but the overall number of British migrants is not decreasing. The target of 34,000 British migrants which was set for this year by the department and the Government will be achieved. The honorable senator referred to the housing position. Both the Italian Government and the Dutch Government have arranged1 housing schemes for their nationals in Australia, and those schemes have been of great help and of great value. I am sure the Australian Government would give every encouragement to the United Kingdom Government or British building societies to arrange a similar scheme for British nationals in Australia. I am confident that many more British migrants, particularly full-fare migrants, would come to Australia df they could be assured by their own government that housing would be made available for them.

page 2001

QUESTION

IRON ORE

Senator SCOTT:
WESTERN AUSTRALIA

– My question is directed to the Minister for National Development. Last Friday 1 asked him a question in relation to the export of 500 tons of iron ore from the Scott River deposits. His reply to the question was to the effect that he would be making a statement on the subject in the Senate later. I read the statement with great interest, but it did not cover my question. I now ask: Will metallurgical information obtained as a result of the export of those 500 tons of iron ore to Germany and Japan be made available to the Western Australian Mines Department and the Commonwealth Scientific and Industrial Research Organisation?

Senator SPOONER:
LP

Williams, to prepare a report for the purpose of advising stevedoring authorities, harbour trusts and marine boards of the impact that this revolutionary technique in cargo handling may have on the whole maritime industry?

Senator PALTRIDGE:
LP

– I have not seen the statement attributed to Captain Williams, but I can well believe that he would have made such a statement. I have discussed this matter with him on many occasions. Frankly, I do not think that it would be necessary to set up a committee of the kind envisaged by the honorable senator, for the very good reason that Captain Williams, who is a well-known figure in Australian coastal shipping, has such a high reputation with shipping authorities and shipping companies that they watch with interest whatever he proposes, or whatever is done as a result of his chairmanship of the body which controls the Australian National Line. I take the opportunity to point out to the honorable senator that it was Captain William’s drive that was largely responsible for the construction of the wheat ships, which have meant so much to Australia; for the improvement of the original bulk cargo ships, which have meant so much to us in the carriage of bulk cargo; for the construction of the “ Princess of Tasmania “; and for the construction of the ship launched on Saturday last - the “Bass Trader “. I am sure that all the shipping companies and all those interested in shipping are already well aware of Captain Williams’s ideas on these various subjects and have taken careful note of them.

page 2003

QUESTION

MACKAY AIR DISASTER

Senator MCKELLAR:
NEW SOUTH WALES

– Is the Minister for Civil Aviation in a position to state when the report of the inquiry into the Mackay air disaster will become available?

Senator PALTRIDGE:
LP

– The committee of inquiry has completed the taking of evidence and is now engaged on the compilation of its report. I had hoped - and I think the committee of inquiry had hoped - that the report would be with me in sufficient time for it to be tabled in the Parliament before the Senate rose. I doubt very much whether that will now be possible, but I will release the report as soon as I get it.

page 2003

QUESTION

LEGAL SERVICE BUREAU

Senator WRIGHT:
TASMANIA

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

In what cities are Legal Service Bureaux carried on?
In each, how many legally qualified personnel are employed?
What was the annual cost of each bureau for the past three years?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– The AttorneyGeneral has supplied the following answer: - 1 to 3. In pursuance of section 10S of the Re-establishment and Employment Act 1945, which provides that the then existing Legal Service Bureaux should continue in existence, a bureau is carried on in the capital city of each mainland State, and in Canberra, Hobart, Darwin and Townsville. In the four less populous cities mentioned, the bureaux are carried on by the parttime service of officers of the respective Deputy Crown Solicitor’s staff, and costs are not separately itemized. In the bureaux in the capital cities of the mainland States, legally qualified personnel are employed as follows: - Sydney, 5; Melbourne, 3; Brisbane, 3; Adelaide, 1; Perth, 2. The cost of the bureaux in those cities for the past three years was -

page 2003

ORDER OF BUSINESS

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

– Mr. President, I move -

That Government business, Orders of the Day Nos. 1 to 11, be considered in the following order:- 1, 4, 5, 6, 10, 11, 9, 7, 8, 2 and 3.

That means that the order of business will be the Nationality and Citizenship Bill I960, the National Capital Development Commission Bill 1960, the Insurance Bill 1960, the Indus Basin Development Fund Agreement Bill 1960, the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1960, and then Sales Tax Bills (Nos. 1 to 9) 1960. We will then turn our attention to the Crimes Bill. I doubt whether we shall get past that point to-day. If we do, we shall turn to the National Library Bill 1960, and then to the Post and Telegraph Bill 1960.

Question resolved in the affirmative.

page 2004

AUDIT BILL 1960

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move -

That the bill be now read a second time.

The principal purpose of this bill is to delete from the Audit Act the requirements for the preparation of statements of sundry creditors of the Consolidated Revenue Fund and the inclusion of those statements in the annual report of the Auditor-General. The Auditor-General has, in the past, reported inaccuracies and drawn attention to deficiencies in these statements and, as the need for the information appeared to be doubtful, the Public Accounts Committee was invited to consider the matter. The committee, on which both sides of this House are represented, examined the principles involved and recommended in its forty-sixth report that the relevant provisions of the act be repealed.

In view of the committee’s recommendation the Government was not disposed to undertake the not insubstantial amount of work involved in compiling and presenting the lists as at 30th June, 1960. The bill has, therefore, been expressed to give effect to the recommendations of the committee and to operate retrospectively from 30th June, 1960. I commend the bill to honorable senators.

Debate (on motion by Senator Benn) adjourned.

page 2004

NATIONALITY AND CITIZENSHIP BILL 1960

Second Reading

Debate resumed from 1st December (vide page 1913), on motion by Senator Henty -

That the bill be now read a second time.

Senator RIDLEY:
South Australia

– The Opposition does not oppose this amending bill. We on this side of the chamber believe that the bill is simply and shortly described in the opening and concluding statements of the Minister for

Customs and Excise (Senator Henty) in his second-reading speech. The opening paragraph reads -

This is a very short bill to amend the Nationality and Citizenship Act and its purpose is to simplify the procedure which a migrant must follow when applying for Australian citizenship.

The concluding statement reads -

It will be evident that the bill does not interfere with the qualifications required of new citizens or the safeguards of citizenship, but is designed merely to give greater assistance to those wishing to adopt our citizenship.

As I have said, Mr. President, the Opposition does not oppose the bill.

Question resolved in the affirmative.

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

page 2004

NATIONAL CAPITAL DEVELOPMENT COMMISSION BILL 1960

Debate resumed from 1st December (vide page 1958), on motion by Senator Sir Walter Cooper -

That the bill be now read a second time.

Second Reading

Senator ARMSTRONG:
New South Wales

– The Opposition will support the second reading of this bill which seeks to amend the National Capital Development Commission Act, but when the committee stage is reached we will move an amendment designed to give the Public Works Committee some surveillance and control over new projects in the Australian Capital Territory. The amendment that we propose to move is -

That the provisions of the Public Works Committee Act 1913-1960 shall apply in relation to works and buildings proposed to be constructed by the Commission in like manner as they apply in relation to public works proposed to be constructed by the Commonwealth.

The National Capital Development Commission is the authority entrusted with the task of building this national capital, the growth of which has been so great in recent years that I do think even the most foreseeing of us can visualize what it will be like in the 1970’s. Canberra will be not only the site of the national parliament but, in years to come, it will be the showplace of the Commonwealth, and something of which we will all feel proud. Over the years there has been much criticism of the huge amount of money that is being expended in the development of Canberra, but whether money has been spent wisely in one direction or unwisely in another, all honorable senators will, I am sure, agree with the objective, which is the building in Australia of a line national capital.

In the last ten years we have seen Canberra develop in a way that was not thought possible twenty years ago, but, in making this the showplace of the Commonwealth, it is important that there be proper control and supervision over the buildings which are to be erected here. Personally, I do not mind if a mistake or two is made because this city is a great experiment in modern architecture and in all those things that go to reflect the culture of the Commonwealth. There may be some buildings here which are not pleasing to every one’s eye, but it cannot be denied that when the lakes bind all parts of the city together we shall have a magnificent national capital.

This measure confers upon the National Capital Development Commission power to control the designing and siting of buildings erected privately. It also empowers the commission to carry out works at the request of semi-governmental instrumentalities and similar bodies. It is important, in those circumstances, that complete power over these matters be vested in one authority. It seems to me that at the moment responsibility is spread over a number of departments which, from all accounts, are not able to bring in the trained staff necessary to carry out properly the various jobs that have to be done in the Australian Capital Territory. I repeat that the Opposition approves of this bill which seeks to vest these powers in the National Capital Development Commission. As I have said, we must have one competent authority upon whose shoulders we can lay full responsibility for making this national capital a great city of which we can be proud. The Opposition does not oppose the measure.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Proposed new clause.

Senator ARMSTRONG:
New South Wales

.- I move-

After clause 3, insert the following new clause: - “ (4.) After section eleven of the Principal Act, the following section is inserted: - 1 1a. The provisions of the Public Works Committee Act 1913-1960 shall apply in relation to works and buildings proposed to be constructed by the Commission in like manner as they apply in relation to public works proposed to be constructed by the Commonwealth.’.”.

– 1 am quoting from a statement by the Minister for the Interior (Mr. Freeth). For the reasons I have given, I regret to say that the Government is not prepared to accept the amendment.

Senator WRIGHT:
Tasmania

.-So far as 1 am aware this amendment comes before us without notice and ‘honorable senators have not had an opportunity to give it other than impromptu consideration. My recollection is that the discussion in this chamber of the Public Works Committee Bill 1960 embraced the question of whether the Public Works Committee Act applied to works under the jurisdiction of the National Capital Development Commission. 1 remember that at the time the view was put forward on the part of the Government that the mere fact that the execution of these works was the direct duty of the commission implied that the Public Works Committee should not scrutinize or be concerned with them. I do not think that that view could be said to have been agreed to in any positive way by this chamber, nor do I remember the drift of the discussion as indirectly indicating that that was the sense of its view.

I am pleased that this proposal has come before the chamber for decision. Before the discussion concludes, I should like to be informed precisely of the importance of the works undertaken by the commission in the Australian Capital Territory in relation to the total capital works expenditure of the Commonwealth. My recollection is that last year the works under the control of the commission involved the expenditure of some £12,000,000 and that this year the proposed works involve the expenditure of £10,000,000. My recollection is that expenditure on works in the Australian Capital Territory represented 27 per cent. of the total capital works expenditure of the Commonwealth last year. I am not certain whether that figure related to works under the control of the commission or to the total works in the Territory. If we have reached the stage of aggrandizing the National Capital to that degree, I think it is a matter for very earnest consideration whether the parliamentary committee that wc set up to scrutinize the Commonwealth’s public works proposals should not be consulted with regard to works in the Australian Capital Territory.

The Minister for Repatriation (Senator Sir Walter Cooper) has said that the commission is constituted of experts and that it has the assistance of advisory committees, but has it the assistance of or are its proposals scrutinized by any parliamentary committee? The question is whether or not this commission should have a completely independent hand to expend votes of £10,000,000 or £12,000,000 a year, without some prior consultation with a committee of the Parliament. What I say in this vein is in line with thought that has been held by me over a number of years. For six or seven years in this chamber I have pleaded and argued for the recognition of the Public Works Committee as a committee to undertake the general scrutiny of public works proposals, not merely those particular proposals about which the Minister thinks he should consult the committee. lt should be mandatory for proposals involving a certain expenditure to undergo the committee’s scrutiny before the Parliament is asked to appropriate money for them. I am glad to say that early this year the Government accepted that principle. I am not saying, of course, that I was the only advocate of it, but 1 sustained it in this chamber with determination. I am very pleased that the principle was accepted.

There is need to justify the contention that works which are the responsibility of the commission should be excluded from the operation of that principle. I should like to hear some detailed reference to the importance of the works under the commission’s jurisdiction and to the damage that would be done if a parliamentary committee had to be consulted before the plans of the experts and advisory committees, which were adopted by the commission, were actually implemented. It seems to me that inquiry and report by the committee make the necessary nexus between Parliament, which votes such large amounts, and the authority which expends them.

Senator Sir NEIL O’SULLIVAN (Queensland) [3.15]. - I strongly urge the Minister to give further consideration to this matter, lt seems to me to be somewhat of an anomaly that Commonwealth buildings and undertakings costing more than a certain amount of money are subject to prior examination by the Public Works Committee if they are outside the Australian Capital Territory, but are not so subject if they are within the Territory. If the Commonwealth Government itself is bound by the Public Works Committee Act, why should not a lesser body - a statutory body created by the Commonwealth - be subject to the same scrutiny? 1 strongly urge the Minister to give the matter further consideration because in the scheme of things tens of millions of pounds will be spent in the Australian Capital Territory and I think it is most important that that expenditure should be subject to parliamentary scrutiny.

Senator ARMSTRONG:
New South Wales

– Mr. Chairman, it is interesting to consider the Minister’s reasons for not agreeing to this amendment. First of all, he said that the Public Works Committee Bill passed this year provided that the Public Works Committee should not be consulted in regard to works in the Australian Capital Territory. But, as Senator Wright has pointed out - and we all agree - no such specific provision was made. On the contrary, it offends our common sense, and certainly no vote was taken on that aspect. Senator Wright has pointed that out very clearly.

I should like to go back to the other reason given by the Minister. He said that there are other safeguards. He said that the National Capital Planning Committee has more authority than the Public Works Committee and that it had sub-committees, experts and all the rest of it. But let us has a look at the operation of the planning committee. For instance, will the Minister tell us how often it meets, for what periods it meets, and whether in effect it is able to take more than a supervisory interest in what is happening in Canberra? He also referred to the Parliamentary Joint Committee on the Australian Capital Territory which, of course, has no real authority; it is a completely advisory committee. It advises the Minister and he need not take any notice of its recommendations.

In the light of Senator O’Byrne’s theory of a cycle of democracy, why should the Australian Capital Territory be exempt from parliamentary supervision? It is fundamentally wrong. If a mistake is made after a proposal has gone through the full cycle and the Public Works Committee has reported on it to this chamber and to another place, who can argue about that? At least the fullest scrutiny has been given. As Senator Wright has pointed out, many millions of pounds are involved. But, as I said in my second-reading speech, apart from the money, we want to make Canberra a great capital. I think that the Parliament should know what is happening. The final point that the Parliament is responsible for such works is very important indeed. I do not mind the Australian Capital Territory being an experimental ground for new types of architecture or for a resurgence of old types. In this Territory, finally, we should have examples of all types of architecture.

I just cannot understand the Government’s resistance to this amendment. The Public Works Committee has been part of our democratic way of life since 1914 - very early in federation. It has done an excellent job over the years. It is a safeguard, and time and time again its value has been proved. So, I cannot understand why the Minister adopts this attitude. To my mind it is a very weak argument to say that some other body takes the place of a parliamentary committee. I do not think anything takes the place of a parliamentary committee. We are sent here with a responsibility. I do not mind delegating part of that responsibility to a committee if that committee reports back to the Parliament. But does any one in this Parliament ever see a report by the planning committee? It is comprised of people from a number of capital cities and meetings are held in Canberra periodically - I do not know how often it meets. What it does is virtually secret. What the committee does is its business and does not become the business of the Parliament. The least we can ask is that in the development of this great capital, which we want to be the pride of Australia, developmental works shall come before the Parliament for consideration and approval. So, I press the amendment and I hope the Government will accept it.

Senator Sir WALTER COOPER (Queensland - Minister for Repatriation) [3.20]. - I believe honorable senators have gained the wrong impression of, or have misconstrued the reason why the National Capital Development Commission was brought into being. To bring in the Public Works Committee would destroy the very body that the Parliament has established to carry out works in the National Capital.

Senator Wright:

– Are you referring to the parliamentary committee?

Senator Sir WALTER COOPER:

– No, to the National Capital Development Commission, which was established under the act which this bill seeks to amend. That commission was specially established to supervise works in the National Capital. The commission is a statutory body, as are the Snowy Mountains Hydro-electric Authority, the Australian National Airlines Commission, which operates Trans-Australia Airlines, and other bodies which have been established to carry out certain work. There is no question of such works being referred to the Public Works Committee because the Parliament has specifically given those statutory bodies certain types of work to carry out.

Senator Armstrong:

– You would not compare the Snowy Mountains Hydroelectric Authority with the National Capital Development Commission, would you?

Senator Sir WALTER COOPER:

– The

Snowy Mountains Hydro-electric Authority is a statutory body, as is the National Capital Development Commission. The Snowy Mountains Authority has been established to carry out certain work in the Snowy Mountains and the commission has been established to carry out work in the National Capital. If the Parliament refers to the Public Works Committee works under the control of the commission, it is taking from that statutory body work which it has been specifically established to perform.

Senator Wright:

The Government and the commission should agree with the proposition that has. been advanced by Senator Armstrong. The press is giving great publicity to what is happening now in Canberra. It is estimated that the works programme this year will cost £10,000,000. When we passed the Estimates which provided for an expenditure of £10,000,000 by the National Capital Development Commission, I do not know whether we dotted any i’s or crossed any fs in finding out exactly how this amount was to be spent. The press has found numerous avenues of expenditure to criticize. If we are to develop a national capital which is worthy of the nation, it should be possible for us to know the cost of various projects and what is proposed to be done.

It is all very well to say that we have a committee of experts at work. A committee of experts can propose very grandiose schemes and not bother very much about what it will cost to put their ideas into operation if there is no one to scrutinize them. The Parliament is very generous, even in relation to the construction of other public works, in allowing an expenditure of £250,000 without the proposal being scrutinized by the Public Works Committee. The power of that body should be extended to allow it to inquire into projects which are estimated te cost less than £250,000. Honorable senators will remember that the Public Works Committee, which has been in existence for a considerable number of years, was set up to scrutinize, not to prevent or destroy, certain projects.

I remember the opposition that was engendered when it was suggested that the Public Accounts Committee should be reestablished. I understand that in the very early years of this Parliament there was a public accounts committee in operation, as well as a public works committee, but for some reason or other its use was discontinued. However, the Public Accounts Committee is to-day a live body which is presenting voluminous reports to the Parliament on many incidents in the administration of public accounts. As a result of the publicity that is given to those reports, greater care is being taken with public accounts.

If the affairs of the National Capital Development Commission were subject to the scrutiny of the Public Works Committee, we in this Parliament, and the press, would feel more satisfied about the expenditure that is incurred in the development of Canberra. There cannot be too much publicity and scrutiny in relation to this matter. The Government, and the commission, would do well to accept the proposal that has been put forward providing for the commission’s activities to be scrutinized by the Public Works Committee.

Senator O’BYRNE:
Tasmania

.- The explanation that was given by the Minister for Repatriation (Senator Sir Walter Cooper) was not sufficiently clear or definite to prove to the committee that the amendment which has been proposed has not a good deal of substance. The explanation brought to my mind the tendency that has grown up in various sections of the Public Service to show a distinct aversion to the activities of the Public Works Committee. For many years the committee had no power to examine all works above a certain value. It was able to investigate only proposals that were referred to it at tie Minister’s discretion. Occasionally a few crumbs were thrown on to the committee’s table, to keep it in existence, while many major works that had been originated by departmental heads or by Ministers proceeded without scrutiny. However, as has been mentioned in the debate, after many years of supplication the Cabinet saw fit earlier this year to amend the Public Works Committee Act to give the committee certain mandatory power. The original act provided that proposed works to cost more than £25,000 would be referred to the Public Works Committee for consideration, but that sum was changed to £250,000. What is the reason for the aversion of the various bodies, which propose to undertake works costing more than £250,000, to having them examined by the committee appointed by the Parliament specifically for that purpose, and to the committee reporting to the Parliament The bodies concerned should be very pleased that the nature of the projects they propose to undertake will be made known to the Parliament, as a result of the committee’s report, and also to the public. I am sure that they have nothing to hide. The fact is that if the committee, reports favorably on the erection of a building at a certain cost, everyone then knows that the money will be expended judiciously and that the work is a proper one to be undertaken. In addition, other factors, such as criticism by disinterested persons outside the Parliament, may be made known in the report of the committee.

I challenge the Minister’s contention that the only function of the committee is to report whether a work that is referred to is or is not expedient. If that were so, it would be a serious departure from the intention of the Public Works Committee Act. I think that members of Parliament expect more from the committee than merely a report about whether or not a certain work is expedient. Over the years, it has been the practice and the tradition of the committee to report on practically every aspect of the works referred to it. Of course, it is the prerogative of the Cabinet or the Executive to decide whether or not it will accept the advice tendered to it by the committee. It is not obligatory on the Cabinet to accept the recommendations of the committee, but at least, after the committee has considered projects and submitted reports on them, the Cabinet is aware of the various aspects that have been investigated by the committee. What is more important, the members of the Parliament generally know the nature of the committee’s consideration.

In this respect, the line of demarcation between the Parliament and the Executive becomes most apparent. We know of the power that is in the hands of the Executive and of the arrogance that is being shown by it to the wishes of the rank and file members of the Parliament. We, know of the gulf that is being created between the Executive and the ordinary members of the community. That is due, in part, to the stifling of criticism by ordinary members of Parliament, despite the fact that those members who serve on committees such as the Public Works Committee are able to show what is going on. Yet, we see the National Capital Development Commission being protected by the Minister because of his personal views on the work of the Public Works Committee. I feel that even he looks upon the committee as a nuisance because it may be embarrassing to him or to some of his departmental officers. I do not intend to sit here without protesting against the very weak explanation that has been prepared for the Minister for Repatriation to make. In other circumstances, I think that Senator Sir Walter Cooper, who was once a member of the Public Works Committee, would have been the first on his feet to acknowledge the justice of the case I am putting.

I do not mean that it should be obligatory to refer to the committee every work proposed by the commission; the committee should be able to choose major projects for the purpose of reporting to the Parliament on them and of keeping it informed of the circumstances surrounding them. As I see it, the committee is most interested in retaining the National Capital Development Commission and in extending its activities. I do not think that the committee wants to destroy the commission. We know of the magnificent work that it is capable of doing and of the calibre of the men who comprise it. We have no argu ment at all with the work of the commission, but we maintain that the principles that have been followed over the years should be followed in relation to the works undertaken by it, both now and in the future.

– Even a committee of experts?

Senator HENTY:

– -I think the National Capital Development Commission is quite a good body. It knows its work. Somebody said that £20,000,000 could be spent without any approval. That is not so. The approval of the Parliament would be necessary for the relevant appropriation measure. In fact, I very much doubt whether this motion is in order at all. I draw your attention, Mr. Chairman, to Standing Order No. 332, which says -

An Instruction can be given to a Committee of the Whole on a Bill to amend an existing Act, to consider amendments which are not relevant to the subject-matter of the Bill, but are relevant to the subject-matter of the Act it is proposed to amend, provided that such motion shall be carried by at least fifteen affirmative votes.

I do not think this amendment has anything to do with the act. It relates to the work of the commission, and I submit that it is out of order.

The CHAIRMAN (Senator the Hon. A. D. Reid). - I have been considering that point for some time and have also sought advice on it. I have listened to a very interesting discussion but I have come to the conclusion that I must now give a ruling on this amendment.

Senator Armstrong:

– You have not been asked for a ruling.

The CHAIRMAN:

– As chairman I have the right to give a ruling at any time. I could1 have done so right at the beginning, but I have delayed taking action to make sure that I would be fair. I have allowed the debate to continue, and in that way perhaps I have been weak, but I will not allow any further discussion. I will declare where I stand. My opinion - and I rule accordingly - is that the amendment is not relevant to the subject matter of the bill. It may be relevant to the principal act but, under Standing Order No. 332, an instruction must be given as set out in Standing Order No. 196A and notice of that instruction has to be given immediately after the second reading has been passed. That notice has not been given. Therefore I rule that the amendment is definitely out of order.

Senator McKenna:

– I object to your ruling, Mr. Chairman. The matter has been argued, and I do not propose at this stage to address myself any further to the subject. 1 think the feeling of the committee might well be tested in relation to it.

Senator Armstrong:

– Am I to take it, Mr. Chairman, that your ruling means that the Speaker in another place did not carry out his duties properly when he did not rule a similar amendment moved there to be out of order?

The CHAIRMAN:

– Order! No debate can be permitted now. On receipt of the terms of the objection, in writing, I must leave the chair and report to the Senate. (Senator McKenna having submitted in writing his objection to the Chairman’s ruling)-

In the Senate:

The CHAIRMAN:

– Mr. President, I gave a ruling in committee in relation to an amendment moved by Senator Armstrong. The amendment was that a new section, section 11a, should be inserted in the principal act, stating that the provisions of the Public Works Act shall apply to works and buildings proposed to be constructed by the National Capital Development Commission. I said that, in my opinion, that amendment was not relevant to the subjectmatter of the bill. I went on to say that it could be relevant to the principal act, but that the procedure required by Standing Order No. 332 and Standing Order No. 196a had not been complied with. Therefore, I ruled that the amendment was not in order. A motion of dissent from my ruling has been moved, and I now report that to you, Mr. President.

Senator McKenna:

– On behalf of the Opposition, I have objected to the ruling of the Chairman of Committees. The Chairman of Committees has relied for his decision upon Standing Order No. 332, which reads -

An Instruction can be given to a Committee of the Whole on a Bill to amend an existing Act, to consider amendments which are not relevant to the subject-matter of the Bill, but are relevant to the subject-matter of the Act it is proposed to amend, provided that such motion shall be carried by at least fifteen affirmative votes.

The Chairman of Committees takes the view that this amendment, whilst relevant to the act, is not relevant to the bill. That is the basis of his argument. That causes us to consider what the bill is. One finds that it is a bill for an act to amend the National Capital Development Commission Act, 1957. It is not a bill to amend the act in any limited way; it is purely a bill to amend the National Capital Development Commission Act 1957. So, from the title of the bill, the act is wide open to amendment.

If one considers Senator Armstrong’s amendment, one finds that it relates immediately and directly to the bill, because it provides that the provisions of the Public Works Committee Act shall apply in relation to works and buildings proposed to be constructed by the commission in like manner as they apply in relation to public works proposed to be constructed by the Commonwealth. The commission is a body that was set up under the National Capital Development Commission Act. The proposal is to bring works that are constructed under the aegis of the committee within the ambit of the bill.

I have only one further comment to make. The argument falls within a small compass. I agree with the thought in the mind of the Chairman of Committees that the amendment must be relevant to the bill. The bill being a bill to amend the whole act, I submit that the whole act is thrown wide open to amendment. That is the basis of the objection to the ruling.

Senator Spooner:

– I direct your attention, Mr. President, to Standing Order No. 201 which reads -

Any Amendment may be made to any part of the Bill, provided the same be relevant to the subject matter of the Bill, and be otherwise in conformity with the Rules and Orders of the Senate.

I point out to you, Sir, that the subjectmatter of the bill is the functions of the National Capital Development Commission. The amendment relates to the functions of the Public Works Committee. The amendment is not relevant to the bill because whilst the bill deals with the functions of one governmental authority, the amendment seeks to deal with the functions of another governmental authority.

Standing Order No. 332 provides, in brief, that the Senate can give an instruction to a committee of the whole to amend an existing act or to consider amendments which are not relevant to the subject-matter of a bill to amend that act. We claim that this amendment is not relevant to the subject-matter of this bill. Then Standing Order No. 196a provides that an instruction to a committee of the whole requires notice and can be moved only before going into committee on any question.

I base my case on two grounds. First, the amendment is not relevant to the bill, and secondly, it is beyond the power of the Senate to give an instruction at this stage.

Senator Armstrong:

– Senator Spooner quotes Standing Order No. 201 as his authority for arguing that the amendment proposed by the Opposition is out of order because the bill relates only to the functions of the National Capital Development Commission. He argues that the proposed amendment refers only to the functions of the Public Works Committee. I submit that his argument is fallacious. We are proposing that the Public Works Committee shall have an interest in ‘what is being done by the National Capital Development Commission. Our suggestion is that, the National Capital Development Commission having made plans and allocated funds for carrying out those plans, the proposed works shall be referred to the Public Works Committee. There are not two separate approaches at all; there is only the one approach in which the Public Works Committee is involved as an advisory and supervisory authority, if necessary, of the work of the National Capital Development Commission. In all the circumstances, I submit that Standing Order No. 201 has no application here.

Senator Spooner then quoted Standing Order No. 333, which provides that an instruction to a Committee of the Whole requires notice, and can only be moved before going into committee on any question. I remind the Senate that during the course of my second-reading speech I gave notice that I would be moving this amendment when we were in committee. I submit, therefore, that Standing Order No. 333 does not apply. In all the circumstances, I feel that this point has been taken merely to curtail debate, and we object to that.

The PRESIDENT (Senator the Hon. Sir Alister McMuIIin). - I uphold the ruling of the Chairman of Committees.

Senator McKenna:

– It is with regret that I move -

That the ruling be dissented from.

There are a number of reasons why I do so, but I think it better that I content myself with saying that I propose the motion on the same ground as that which I put to you, Mr. President, in the preliminary argument.

I add one word only relating to the propriety of the argument addressed to you by Senator Armstrong. I invite your attention to the exact terms of the proposed amendment. They are -

The provisions of the Public Works Committee Act 1913-1960 shall apply in relation to works and buildings proposed to be constructed by the Commission-

Senator HENTY:
TASMANIA · LP

– My copy reads, “ by the Commonwealth “.

Senator McKenna:

– I do not know where you got your copy. The one I have in my hand says “ Commission “. The proposed amendment continues - in like manner as they apply in relation to public works proposed to be constructed by the Commonwealth.

Senator Henty is looking at the last line of the amendment. In other words, the honorable senator was wrong.

Senator Henty:

– I admit that.

Senator McKenna:

– So it is completely clear that one cannot argue, that this proposed amendment is not relevant to the work of the commission. It is obvious that “ commission “ refers to the National Capital Development Commission, to which this bill applies.

What is the ambit of the proposal? We have set up a commission, and we of the Opposition, through Senator Armstrong’s amendment, now propose to say to that commission, “The works you are constructing will be subject to the scrutiny of the Public Works Committee “. That is not primarily or essentially a matter that is exclusively referential to the Public Works Committee. It is primarily a matter that relates to the commission and its work. Mr. President, I must confess that I cannot see the relevance of the argument which has been addressed to you that this proposal is restricted to the work of the Public Works Committee and has no relevance to the activities of the commission. Therefore, I submit that the proposed amendment is completely relevant.

Senator Spooner:

– I move -

That the question of dissent requires immediate determination.

I understand that the motion, if agreed to, will enable the Senate to deal with the matter now instead of its being held over to some subsequent date.

Question resolved in the affirmative.

Question put -

That the ruling be dissented from.

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

AYES: 26

NOES: 29

Majority . . 3

AYES

NOES

Question so resolved in the negative.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 2017

INSURANCE BILL 1960

Second Reading

Debate resumed from 1st December (vide page 1955), on motion by Senator Paltridge-

That the bill be now read a second time.

Senator McKENNA (Tasmania - Leader of the Opposition [4.20]. - The Opposition supports the measure.

Question resolved in the affirmative.

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

page 2017

INDUS BASIN DEVELOPMENT FUND AGREEMENT BILL 1960

Second Reading

Debate resumed from 1st December (vide page 1960), on motion by Senator Gorton -

That the bill be now read a second time.

Senator DITTMER:
Queensland

– This is a bill upon which there is a great measure of agreement between the Government and the Opposition. I do not think that my speech, therefore, will call for interjections. I agree fully with the Government in its decision to share in this great work. However, the Opposition believes that the Senate could have been given more details of the proposed work for the development of the Indus Basin. The Indus River is one of the great waterways of the world. In its upper reaches, it contains great volumes of water. At times, the lower reaches are subject to great flooding, but at other times there is only a trickle of water through the delta covering approximately 3,000 square miles. These fluctuations are a great handicap to the area that the river serves.

Australia is making a major contribution under this proposal to a great humanitarian work. Under this scheme, the area of irrigatedland in this part of the globe will be increased by approximately 60,000,000 acres. Although an area of approximately 130,000,000 acres is served by the Indus River and irrigation has been carried out for centuries, only about 30,000,000 acres are irrigated at present. This is done not by modern methods as we know them in Australia and in other parts of the world, but by direct river irrigation. There are no permanent canals and no pumping stations. On the tributaries of the Indus and on the Indus itself there are a number of dams, but they have never been utilized in the way we utilize dams. Throughout the years, both under British rule and since the separation of India and Pakistan, there have been constant disputes about the utilization of the water; not that coming from the western tributaries of the Indus, but from the eastern tributaries. There are five major tributaries. Three are known as the eastern group and two as the western group. Disputes have arisen over the years because India and Kashmir have each used water, and often when the flow is tapped for irrigation in the upper reaches, those lower down are deprived of their supply. This has led to disputes. In 1951, Mr. Eugene Black, of the International Bank for Reconstruction and Development, conceived the idea of an agreement between India and Pakistan for the utilization of this tremendous waterway and the elimination of at least this cause of the friction between them. The idea was developed, and as recently as September of this year the agreement covering the scheme was signed at Karachi between India and Pakistan.

Various members of the United Nations are coming into the scheme in a substantial way. Australia is coming in- to the extent of £6,965,000, New Zealand to the extent of £1,250,000, Canada to the extent of a little over £10,000,00, the Federal Republic of West Germany to the extent of £13,000,000, Great Britain to the extent of £26,000,000, and the United States to the extent of £79,000,000. All of these amounts are expressed in Australian currency. In addition, the United States will make a loan of 70,000,000 dollars to Pakistan. India has agreed to contribute £62,500,000. Pakistan will make not nearly so substantial a contribution, totalling less than £10,000.000. Each of the parties associated with the proposed development has shown tolerance and an appreciation of the value of the work.

Provision is made for the International Bank to act as administrator. The total cost of the work is estimated to be £440,000,000. A comparison of this cost with the estimated cost of the Snowy Mountains scheme, which I understand is £367,000,000, shows that the work will be gigantic. Something really worthwhile will be achieved. The expectation of life of the people in the areas that the rivers serve is about 30 years. This lack of longevity is in no small measure due to the famines that occur and to intense flooding, which results in great loss of human life. The scheme wilt lead to irrigation on modern lines and to flood’ mitigation. Many honorable senators will know that over the years the type of irrigation that has been used in this area has resulted in waterlogging and there has been an unexpected lifting of the watertable. The result is that salt has risen to the surface and land that was previously arable land is now desert. By proper, efficient and modern irrigation, much of this land can be reclaimed. It is estimated that 60,000,000 acres of land can probably be reclaimed and made to produce crops.

The main crops at present produced are wheat and cotton. Production, of course, is dependent on the seasons, which are variable. The river flow comes from the glaciers of Tibet, the melting snows of the Himalayas and other ranges, and the monsoonal rains that fall from July to September. These rains vary in intensity and on occasions the annual rainfall at Karachi has been less than one inch. On these occasions there have been terrific suffering, deprivation, and famine for the millions who live in the river basin. The present population of the basin is about 50,000,000. The irrigation that will follow in the train of this work will permit crops additional to wheat and cotton to be grown. These will include rice, barley, oil seeds and various types of corn. There will therefore be a greater range of production. It is estimated that productivity will be increased in value by tens of millions of pounds. The scheme will uplift the economy of the area and make a substantial contribution towards lifting the living standards of the people, which is something eminently desirable.

The bill provides for various contingencies. It provides that goods and1 machinery to be utilized in the scheme are to be purchased on a competitive market. Purchases will probably be restricted to the countries that are contributing. It is a pity that more are not contributing. In the event of disagreement between India and Pakistan, an arbiter is to be appointed. It is estimated that the completion of the work will take ten years. Knowing the history of such major schemes, we would not be surprised if it took much- longer and involved the expenditure of more money.

Foresight has been exercised in the provision that during the first ten years - after which the entire waters of the eastern tributaries, Ravi, Sutlej and Beas, will be available to India - India is to permit the release of water from these rivers to Pakistan. This period may be extended to thirteen years. The waters of the western rivers, Indus, Jhelum and Chenab, will be utilized without restriction by Pakistan, except that a certain volume may be used by India and Kashmir. There is provision for liquidation and the handling of affairs upon termination of the agreement for any reason.

The scheme, therefore, is fairly complete. Great credit is due to the United Nations, and particularly to Mr. Black for his work in this connexion as Chairman of the International Bank for Reconstruction and Development. There is an aspect of this matter other than the humanitarian aspect. We have for 43 years seen national and international communism at work - everspreading, with tentacles reaching everywhere. Many people throughout the world have come to accept the spread of communism as inevitable. In many instances the Communists have been able to overcome us economically in the conflict in Africa and Asia. Many African and1 Asian countries have come to accept neutralism as something which must not be departed from. This has resulted from the manifestation of the efficiency of Communists in many phases of human activity. I know that Pakistan has joined various pacts with the Western nations, but India in particular has maintained its stand of neutralism. This agreement is an example to those two countries and to other Asian or African countries that the Western world can do something for people who have been deprived of their natural human rights. We are showing that we can measure up to communism in efficiency, that the freedom of the Western world1 can thrive and that the human race need not necessarily accept as inevitable subjugation of the human spirit and deprivation of personal liberty. The scheme will make a contribution towards strengthening the economy of the area.

We support the scheme on the ground that it is humanitarian in approach and that we are conferring basic rights on people who have been deprived of them for centuries. We are waging an active economic war against the spread of international communism. We are persuading the people of the Asian countries that the Western world - by which I mean the Englishspeaking countries and those associated with them - desires to preserve freedom. The scheme will lead to the irrigation of 60,000,000 acres. It will turn desert into flowering country. Flood mitigation and control will provide constancy of water supply and in all probability will make worthwhile for cultivation 3,000 square miles of virtually useless delta land. It will make for cordial relations between the West and Asian countries, and between the two countries, India and Pakistan, which are most concerned. For these reasons, we of the Opposition have the greatest pleasure in supporting the measure and giving it our blessing.

Senator WILLESEE:
Western Australia

– As Senator Dittmer has said, the Australian Labour Party not only does not oppose, but supports the action of the Australian Government in making a sum of money available for this great project. I suppose, Mr. Acting Deputy President, that this is one of the most exciting and dramatic ventures in modern times - the harnessing of one of the really great river systems of the world being undertaken at a time like this, quite apart from the political implications attached to it.

Senator Dittmer has pointed out that a project involving a drainage basin which covers 372,000 square miles, with people ready, eager and waiting to utilize that area, is certainly something worthwhile participating in. When one realizes that the rivers which flow from Tibet, through Kashmir, and then turn south across the vast plains of Pakistan would be equivalent to a river flowing over similar country between Perth and to a point east of Adelaide, one can visualize what an enormous benefit such a scheme would bring to any country. Strange as it may seem, parts of Parkistan remind the traveller of some areas in Australia in which nobody lives. But the Pakistanis, with their genius for being able to utilize little bits of land with little irrigation, remind one of Australians in similar areas.

Pakistan’s problem, of course, is the fact that the Indus and its tributaries rise in or near India and with one exception the head works are all in India or Indian-held

Kashmir. One is in the section of Kashmir which is held by Pakistan. If the Kashmir dispute finally resolved in India’s favour, those head works would fall into India’s hands. That gives the problem a great deal of emphasis.

In dealing with the rivers, we should not overlook the political questions. This has been a problem between the lower states south of Bahawalpur and the northern states for decades, long before partition came about. It used to be one of the problems in the old princely states. The British, in their days in the undivided, untruncated India, used to come up against this problem from time to time. As a matter of fact, I think the problem existed at the time of partition. If I remember rightly, some sort of agreement had been reached, which was swept away at the time of partition.

The interesting part to me, Mr. Acting Deputy President, is that a small commission was set up, but this problem did not seem to have a great deal of significance in the political division of India and Pakistan. 1 suppose it is very easy for us, sitting here to-day, thirteen years later, to have hindsight and say that it should have had greater significance. However, it should not seem strange that in the turmoil of the days of partition, particularly when the British decided to go sooner than they had originally determined, this matter did not play a greater part. One of the rivers actually became the border between the two countries for about 150 miles.

One hesitates to say that the engineering problems are simple, but on the whole they seem to be. With our Snowy Mountains scheme, for 70 or 80 years there were all sorts of plans as to how the objective could be achieved, but we had to wait for a government which had the courage, made the financial arrangements and got the States to agree to go ahead with the project. Evidently, 100 years ago British engineers started on this Indus Basin project. They had already put in one of the greatest irrigation and canal systems in the world. It seems that the engineering side was not the most difficult part, but the magnitude of the project frightened the people of that day.

It is quite understandable that there should have been tremendous worry on the part of Pakistan and India, because the headwaters of the rivers are in one country and the rivers flow into the other, and particularly when one realizes how the Pakistanis rely on these rivers. So, there were all the ear-marks of a great deal of trouble and controversy; indeed, war could have resulted. In those days the Pakistanis used to point to the fact that the waters had been interfered with by people of India, and but for those warning notes there would have been nothing for the Pakistanis on the flats of lower Pakistan to do but to lie down and die, or go to war. The position was as serious as that.

However, they had to wait. One name which has not been mentioned is that of David Lilienthal. I understand that he went there to look at this problem, and because of his experience of the Tennessee Valley scheme in America he saw the country through the eyes of an engineer. It was useless to continue the argument about where the waters rose, and where they finally debouched into the Arabian Sea. He saw the problem as would an engineer and knew that the only thing to do was to treat it as one water scheme, as it was. He went away and wrote articles on it. Then the idea was taken up by Mr. Eugene Black, of the International Bank for Reconstruction and Development. Having David Lilienthal on the engineering side, Black, being a financier, immediately moved in on the financial side. The two men made a solid combination. Two world statesmen, Nehru and Ayub Khan, were big enough to see the possibilities. Imbued with the spirit of the United Nations, various countries came in to help. One interesting point is that Germany, for the first time, took a share in helping other nations. I think I am right in saying that. Another interesting point on the financial side is that Canada insisted that its contribution should be treated as Colombo Plan aid. Its contribution was an extra grant which it wanted regarded in the same spirit as its Colombo Plan aid.

I was in Pakistan in 1952, and that is why I see the importance of this project to-day. I remember speaking to a departmental head, Nasir Ahmad, who said to me: “You have been looking at the Kashmir problem, the political aspects and the cease-fire line. Have you a complete grip of what the canal waters mean to Pakistan? “ I frankly confessed that at that stage I knew it was a problem, but I certainly did not elevate it over the Kashmir question. After showing me a map and explaining the situation to me, he said: “ Pakistanis cannot live without the canal waters, and much as we think that we have every right to Kashmir, the fact is that we are living without it to-day. To lose it would be inconvenient to us and stop our development, and we would feel a sense of injustice. But if the canal waters are cut off there is nothing for the people to do but to lie down and die. It will mean that not thousands but millions of our people will face death.” When we talk to responsible people like that man and they hold their views as firmly and as undeniably as he did, we realize how serious the position is.

Another thing that impressed me was that whenever any one in Pakistan uses the word “ Punjab “ as that old land of five rivers, even the ordinary people say wistfully, “ Yes, that was before partition. It is now the land of three rivers.” Those people may nol: fully understand such things as irrigation and headworks, but this problem is deeply rooted in their minds. That is particularly so of people in the northern States.

Another interesting point is why this problem did not play an important part at the time of partition. One would have thought that both countries would have regarded it as very important. From the Pakistani point of view, one wonders why that did not happen. From what I can ascertain, India took this view: “ Pakistan has agreed to this. She knows perfectly well where the rivers run and where the headworks are, and after all we have only a quarter of the irrigated area and she has three-quarters of it. That is a fair enough agreement. Evidently the Pakistanis have adopted the attitude that custom and usage over 100 years have established the various areas which are to use these waters. The lower Iberian States undoubtedly have their rights. These disputes have been going on over the years and clear-cut divisions of territories have been made. Therefore, custom and usage over the years are the guiding factors. Apparently the commission is trying to solve this difficult problem in relation to rivers, canals and railways in the best possible way. You cannot cut those services down the middle. They are economic necessities to both countries which must work out between themselves a system of joint control. Later, when the canals are developed - as engineers have long known they must be - there should not be great difficulty because of the previous joint control. The agreement by India and Pakistan on the Indus Basin scheme has led to what can be regarded almost as a cease-fire in the battle for irrigation waters which was threatening to develop into a major conflict. That makes it all the more wonderful that a solution to this long-standing problem has been found.

This subject provides a most interesting study, which ever way you view it. When you consider this vast area of about 2,000 square miles with a rainfall ranging from 5 inches in the centre, to between 20 inches and 30 inches in the north and 10 inches near the Arabian Sea, you will realize the magnitude of the problem. Apparently the alluvial soil is not bad. The flat country has advantages for irrigation but it also has some disadvantages in that there is the seepage of salt - the Indians call it thur- about which Senator Dittmer spoke. So the engineering aspect of this proposal is also very interesting.

When we raise the standard of living ot people in this area it will not be a matter of increasing a farmer’s production from say four bushels an acre to eight bushels an acre. Hitherto when the crop failed the people died. People who until now have existed on a bare living scrounged out of a little piece of ground with the help of irrigation, will have something to live and work for. It is not a case of lifting them to an income similar to that earned by an Australian farmer, for example. We shall lift them from nothing to being land holders and farmers in their own right with farms on which the soil will be pretty good. I understand that not much fertilizer has been used in these areas to date. So, the provision of irrigation water will be a tremendous help in their battle to make a living out of ground that many people in Australia would not bother to look at. This proposal will bring about tremendous development.

At present there are two major matters of dispute between India and Pakistan. This agreement will go a long way towards resolving one of them, and I think we have the right to hope that it will go a long way towards resolving the other - the Kashmir question - because the shadow of that dispute has hung over the canal waters problem, not only because the head works are in that area, but also because of the whole political question. Australia had a very early connexion with this dispute through Sir Owen Dixon whose report unfortunately was not accepted for reasons over which he had no control although 1 understand that it was appreciated because of its fairness, the work that was put into it, and the international reputation that Sir Owen Dixon enjoys.

The next problem is to ensure that the scheme is carried on to completion. You do not get men like Ayub Khan and Nehru every day. Any one who has been to India knows how hatred can blow up. This is likely to happen particularly as there are thousands of people still in refugee camps. This is a running sore on the feelings that have been created over the years. The scheme must rest on people in the lower levels, lt will have to be carried on by them and chey will have to work side by side day after day. If the work is carried to completion, a lot will have been done on the human side of the matter.

The United States of America again has gone to the fore with its usual generosity. As Senator Dittmer has pointed out, certain men have played notable parts in formulating this agreement. There was Mr. Lilienthal, Mr. Eugene Black and his assistants and the two great leaders of the nations concerned. A tribute is due also to the bank itself, without which Mr. Black would not have been able to move, and to the subscriber countries. As I have said, it is interesting to see that West Germany has agreed to participate in the scheme, and it is pleasing that the Australian Government, which frowned on the Snowy Mountains scheme when it was first put into operation, has learnt its lesson in the past twelve years and has not hesitated to associate itself with a similar project even though that project is many miles from Australia.

Every person of goodwill hopes not only that the scheme will be a great success, but also that it will foreshadow greater things for India and Pakistan, which are both members of the British Commonwealth of Nations.

Senator CANT:
Western Australia

– I do not oppose the bill, nor do I oppose Australia’s entry into the field of assistance for under-developed countries, but I am of the opinion that charity begins at home. The population of any country is measured by the availability of its water supply. I appreciate that there are people in Pakistan and India who are not able to obtain a standard of living comparable to that which is enjoyed by the Australian people, and I realize, too, that those countries are overpopulated and that Australia is underpopulated. One of the ways to increase the population of Australia is to develop our available water supplies. This is the driest continent in the world. A normal year’s rainfall would cover the surface of this country to a depth of only H inches. In the United States of America, which has an area comparable to Australia, the rainfall would cover the surface to a depth of about 10* inches. Another factor to be taken into consideration when discussing Australia’s rainfall is that most of our rivers are close to the coastal belt and that most of our water flows into the sea.

With a rather low rainfall and with the bulk of our water flowing into the sea, it is essential that we should conserve all of our available supply. Shortly after the war, the Chifley Government entered into an agreement with the Government of Western Australia to subsidize on a £1 for £1 basiswhat is known as the comprehensive water scheme in the south-west of the State.

The ACTING DEPUTY PRESIDENT (Senator Anderson). - Order! I do not want to cut across the honorable senator’s remarks, but I point out that the bill beforethe Senate relates to an agreement for the development of the waters of the Indus River.

Senator CANT:

– Yes, Mr. ActingDeputy President, I know. I am criticizing the spending of money collected from the Australian taxpayers for the development of the Indus Basin, when that money could’ be more profitably spent on the development of water supplies in Australia. As 1 have said, the Chifley Labour Government entered into an agreement with the Government of Western Australia to subsidize on a £1 for £1 basis the comprehensive water scheme in the south-west of the State. Shortly after the Menzies Government came to office, the comprehensive water scheme was reduced in size. The development of the scheme was undertaken on a smaller basis. The Government of Western Australia recently applied to the Commonwealth Government for further financial assistance for the development of the scheme. To the best of my knowledge, the Commonwealth Government has refused to subsidize the work of the State Government in completing the scheme.

The object of the Indus Basin development scheme is to use the water of the Indus River for irrigation schemes in the countries through which the river flows and to give the people of those countries the opportunity to develop land that cannot be developed at present because of lack of water. I remind the Senate that the Commonwealth Government has made available to the Government of Western Australia the sum of £3,000,000 for the development of the Ord River scheme, which requires the expenditure of approximately £20,000,000. In the Ord River area we have a large black soil plain which could be developed by irrigation. The £3,000,000 that has been made available by the Commonwealth will result in the development of only fifteen farms. There is no guarantee from the Commonwealth that the additional £17,000,000 that will be required for the construction of the main dam on the Ord River, and which will make possible the irrigation of approximately 200,000 acres, will be forthcoming.

I point out, too, that if dams were constructed on the Fitzroy River-

Senator Hannaford:

– We are discussing the Indus River, not the Fitzroy River.

Senator CANT:

– That is true. The Government proposes to spend the Australian taxpayers’ money on the development of the Indus Basin, and I am saying that that money could be spent on the development of Australian rivers.

Senator Wood:

– That is so.

The ACTING DEPUTY PRESIDENT. -Order!

Senator CANT:

– Apart from the Fitzroy River, a tributary of that river could be dammed at Diamond Gorge, and if a dam were constructed there, more water could be retained than is held in the holding areas of the Snowy Mountains scheme. The damming of another tributary of the Fitzroy - the Margaret River - would make available much the same amount of water. Yet, we are prepared to spend outside Australia, over a period of approximately thirteen years, about £7,000,000 of the money of the Australian taxpayers. No money is forthcoming for schemes that would open up virgin country in the northwest of Western Australia. I believe that charity begins at home. We should have a surplus of money from our own developmental works before we spend money out of the country. Let us assist other countries by all means, but do not let us neglect Australian developmental works.

Senator GORTON:
Minister for the Navy · Victoria · LP

– in reply - I am pleased that a bill of such undoubted importance to the world as a whole as the one we are discussing should be passing through the Parliament on the initiative of the Government and with the support - not merely the lack of opposition - of the Australian Labour Party, as voiced by Senator Dittmer and other honorable senators opposite. A mighty co-operative effort is being made. The. significant fact is that two countries which have been at loggerheads for years because of a territorial dispute affecting the very waters with which we are here dealing, have managed, to some extent at any rate, to resolve that dispute without resort to force. With the assistance of other countries, they have reached an agreement which will affect the lives of 50,000,000 people and lead to the economic development of 30,000,000 acres of land.

In relation to the argument put forward by Senator Cant - and I heard some agreement coming from an isolated quarter on this side of the chamber-

Senator Wood:

– That is right.

Senator GORTON:

– I should say that no one suggests that we are wasting money by helping to raise the standards of living of the millions of people to our north.

When we make a contribution which renders more remote the use of force where force might otherwise be used, and when, by doing that, we contribute to construction instead of destruction, I certainly do not think that we are wasting the Australian taxpayers’ money.

Senator Cant:

– I did not say that.

Senator GORTON:

– I certainly do not agree that such assistance should not be given until all the demands of every State and every parish have first been met. I certainly do not share that conviction.

I conclude my remarks by saying how pleased I am that the majority of honorable senators on both sides of the chamber, with some dissent from both sides, are sufficiently broad-minded and internationallyminded to agree that the action that the Australian Government is taking in this respect is for the good of the world as a whole and, therefore, must also be for the good of Australia.

Question resolved in the affirmative.

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

page 2024

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1960

Second Reading

Debate resumed from 1st December (vide page 1894), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator RIDLEY:
South Australia

– When the debate was adjourned last week, Mr. Acting Deputy President, I was briefly tracing the history of the vehicle building industry from its birth as a result of a decision by two companies in South Australia - the Holden and Richards organizations - to embark on the mass production of motor bodies. I had said that that decision was prompted by the loss of shipping during the First World War, which had made it impossible to bring to Australia complete motor cars or bodies, or even complete panels for the manufacture of car bodies in Australia. I had compared the assistance that had been given to the industry by the Labour movement, both industrially and politically, with the lack of assistance pro vided by the present Government and governments of a similar political colour throughout the years. I had also shown that there had been a complete lack of co-operation by industry generally with the vehicle-building industry. While speaking in the debate, Senator Wright quoted figures to illustrate that, whatever might be said of industry generally in Australia, the motor car industry had succeeded in producing itself out of the inflationary tendencies that had affected industry as a whole. On one occasion Senator Wright said -

I have often rallied to the call which has gone forth on my side of politics and which suggests that the only way in which to extricate yourself from an inflationary condition is to produce your way out of it.

Later he gave figures to show that, disregarding the increase in sales tax on motor cars, the actual increase in the price of most cars had been only £2 or £3. Senator Wright also pointed out that there had been an increase in the wages of the workers, due to inflation, without any increase in real wages. 1 do not wish to develop this argument further, because I believe that many other honorable senators wish to speak in this debate, but I point out to Senator Wright that it is surprising that arguments similar to those which he has put forward in this chamber have been placed before the Commonwealth Conciliation and Arbitration Commission, and have been advanced in discussions with the employers in the motor manufacturing industry by the Vehicle Builders Employees Federation throughout the years. In other words, it is possible to establish, on figures different from those advanced by Senator Wright, that, when treated in isolation, the vehicle building industry has been efficient and could have paid increased wages which would have constituted an increase in the real wages of the workers without aggravating the inflationary conditions.

It think it is admitted - at all events it has not been denied - that the vehicle building industry is one of the most efficient industries - if not the most efficient industry - in Australia to-day. It has also not been denied, as other spokesmen have pointed out this fact, that the motor car manufacturing industry in Australia is as efficient as its counterparts in other countries. We therefore come back to the question of whether or not the proposed increase in sales tax can either impair the present position or assist in the desired economic direction. Of the four speakers who took part in this debate before I rose, three have agreed that whilst the imposition of sales tax on the products of this industry in an endeavour to slow it down undeniably causes hardship and unemployment, and throws a spanner in the works in respect of the plans and programmes of the companies, in a four-year period the increased tax becomes absorbed into the price of a motor car. The result, as pointed out by Senator Cole, is that people either buy lower-priced cars or drive around in second-hand vehicles. Senator McKenna, Senator Cole and Senator Wright traced the effect of sales tax on this industry from 1956 to the present time. They adduced arguments to prove that while the increase in sales tax caused unemployment and a backlag and threw the industry into confusion for a little while, after four years the position was back to what it had been at the beginning of that period. They pointed out that, four years after the increase in sales tax, we were asked to apply the same cure as we applied in 1956.

I do not think we can accept the arguments advanced in support of an increase in sales tax to-day. The whole history of similar impositions of sales tax in the past proves that, if this measure is agreed to, we can look forward to increasing the sales tax on motor cars to 50 per cent., or even higher, in 1964 or thereabouts. History proves that, while the imposition of sales tax has caused’ all the ups and downs in the industry that have been referred to by Senator Wright, it has eventually been loaded into the cost structure. The cost of a motor vehicle is affected and the effect is felt throughout the economy. It is well known, and has been argued previously, that not all purchasers of motor cars buy their vehicles for travelling to and from work or for pleasure. A large percentage of the motor cars purchased are bought by firms for use in their businesses and they pass on the cost to the consumers of their products. I agree 1,000 per cent, with Senator Wright when he says that sales tax is not an anti-inflationary measure. The whole history of this country has proved that sales tax, in the final analysis, has an inflationary effect. As I have already instanced, three of the four speakers who preceded me in this debate agree that the imposition of sales tax is not the correct way to control any alleged or real over-production in the motor body building industry or to prevent the industry from making too great a demand on the available man-power. The “ Sun-Herald “ yesterday, in its section, “ Financial Review “, published an article under the heading, “’ Stop-go in motor industry “. This article, which I quote to show that, it is not only speakers in the Senate who recognize the truth of the arguments that I have put forward, states -

The “ stop-go “ pattern of motor registrations over the past ten years is shown in the accompanying graph.

The graph shows the figures quoted by Senator Wright last Thursday evening. The article continues -

Far from evening out demand into steady growth over the period, official credit and sales tax policies have accentuated the booms and slumps. After the recession of 1952, demand had slipped into top gear again by 1955, when it was suddenly cut off with the sales tax increase in the Little Budget of 1956.

The trade coasted along for the next couple ot years, when pent-up demand again started to make itself felt, building up to the peak year of 1960. A further lift in sales tax on top of credit curbs threatens to turn the cycle sharply downwards again. The pattern could then repeat itself again - brakes on for a couple of years while buyers postpone their buying until the pent up forces of demand break out into another boom. Effects of both the 1952 and 1956 “ stop “ signs were felt for a couple of years before demand broke through the barriers again. Once the cycle has been established it may be hard to counteract. Certainly official policy in recent years has helped to accentuate it.

Even if the 40 per cent, sales tax bill is defeated, the industry will probably face some slowing down in local sales as credit curbs and the normal market cycle take effect. A conservative concern for this future - and for increasing competition from new models - was probably behind Southern Motors’ cancellation of its l-for-4 bonus, and the heavy plough-back of profits this year by the local Holden distributors, John A. Gilbert, Stack, W. H. Lober and C. V. Holland.

But the total number of cars on the road will continue to grow and, for the next year or so, some will have to do a bit more work than usual.

Business should continue to be good for companies such as Automotive Components in the parts and servicing business.

I think that article illustrates quite clearly that the majority of people in Australia who have given any thought to the problem that faces us to-day are comparing the present position wilh what has happened in the past.

Senator Wright indicated that if he thought this increased sales tax was to be of limited duration, and would be taken off at some reasonable time in the future, he would view the matter in a different light. 1 can only say that if a sales tax measure were brought in with a time limit attached to it, it would be probably more disastrous in its effects than if the tax were imposed for an indefinite period. I do not mean to imply that once a sales tax has been imposed it cannot be taken off again, but I think it is fantastic to imagine that the Government could impose a sales tax for a period of six months and expect anybody other than a mentally incompetent person to purchase a car during that period of six months.

Senator Branson:

– That has not been suggested.

Senator RIDLEY:

– No, but there was mention in some of the newspapers that Senator Wright had suggested that there should be a time limit on the bill. I do not think that Senator Wright did suggest that. I think Senator Wright’s suggestion was that if he believed, from his knowledge of the history of sales tax, that the new impost on motor cars would be removed after it had slowed down the industry for a certain period, he would view the measure in a different light. He went on to say, however, that the history of sales tax legislation indicated that once a tax was put on it did not come off. I do not think I need to emphasize that sales tax, once imposed, can be removed only with approximately the same degree of secrecy that attended the introduction of the proposed increase we are now considering.

Senator MCKELLAR:
New South Wales

– I support the measure. The action of the Government has not been taken without a great deal of thought. Cabinet was faced with a difficult situation at a difficult time and I think it is to the credit of the Government, in view of the opposition facing it, and its knowledge of the unpopularity of restraints such as this, that it decided to go on with the economic curbs that are required to correct the position.

The Government was faced with the necessity to stabilize the economy. Several things could have been done, but first of all the Government had to consider what could be done in the quickest possible time to correct the situation in the most substantial manner. One of the measures - and I repeat the word one - decided upon by the Government was the imposition of this increased sales tax. I realize that in the minds of many people there are no virtues at all in sales tax, but at least it must be conceded that the action of the Government has the virtue that the tax can be just as easily removed. Senator Ridley has just pointed out the fallacy of imposing sales tax for a specific period. I think his point is quite obvious to every one. The Government, through the second-reading speech of the Minister for Civil Aviation (Senator Paltridge), who represents the Treasurer in this chamber, stated without any qualifications at all that this measure would be reviewed as soon as possible in the light of the economic position. We cannot expect the Government to do any more than that. We could not expect the Government to say that it was imposing this tax for twelve months or nine months. I think that what has been stated is all that we can reasonably expect.

In view of the economic situation of Australia it is absolutely necessary to make use of the capital that is available to us. It must give us food for thought that an amount of about £212,000,000 is involved in the hire purchase of motor cars in this country, and that that is an increase of £35,000,000 on last year’s figure.

Senator Cole:

– How much is involved in television sets?

Senator MCKELLAR:

– Not very much at all. I shall have something to say later on about television sets in reply to a states ment made by Senator Cole. About £200,000,000 is spent overseas on items connected with the motor industry. Chief amongst those items is steel. I said last week that the production of steel in Australia is rising to what would have been regarded as a fantastic figure before this Government came into office. But still we are not producing enough steel for our own requirements. A shortage of steel means that reproductive works that should be undertaken are not being undertaken. The motor industry is using what is considered, perhaps, to be more than its fair share of this commodity.

Senator Branson:

– With a result that the needs of farmers have to be cut down.

Senator McKELLAR:

– Speaking of farmers, I am told on very good authority that it is impossible to buy a new header or harvester in Australia to-day. I cannot vouch for that, but I make the statement to the Senate on very good authority. That is one of the reasons for this measure. The use of so much steel by the motor vehicle industry is hindering the manufacture of articles that can be used in a more productive way. Steel, of course, has been in short supply for a very long time.

I should like to emphasize that not one supporter of the Government has any animosity towards the motor vehicle industry. It is a great industry, particularly so far as South Australia is concerned. The industry has manufactured one of the best cars in the world, most suitable for Australian conditions. I am not an agent for the Holden car, but I do say that it is eminently suitable for Australian conditions and the production of the car is, I think, a great credit to the company concerned.

The statement has been made that this measure will mean a large increase in unemployment in Australia, but I do not think that statement will stand up to examination at all. No doubt there will be some unemployment, and that is regrettable, but there are other jobs to which men put off from the motor industry will ‘be able to go. Any dislocation in employment is unfortunate and most unsatisfactory to the people concerned, but it is far better to have merely some dislocation in employment than to have unemployment. We are not faced with unemployment. We have in Australia, as we all know, over-employment. That is a position which does bring about some headaches, but we would rather have headaches from over-employment than headaches from some other causes we can think of. Prominence has been given in the press recently to statements that the actions of the Government will cause unemployment. But if we cast our minds back, we cannot remember the same newspapers praising the Government for actions which have increased employment. If we trace this Government’s record back over the last ten years, we find just that. No mention has been made of the huge increase in employment resulting from this Government’s policies, but immediately there is a comparatively small drop in employment the fact is headlined. Australia is one of the few countries in the world in which there is, on an average, one motor car to every four persons. Until recently motor vehicles were being registered in Australia at the rate of over 900 a day, every week in the year.

Senator Ormonde:

– They will not be registered at that rate any longer.

Senator McKELLAR:

– If the honorable senator will only realize it, that is one of the reasons for introducing this measure. The petrol refining industry was given a great fillip by the abolition of petrol rationing by this Government, and we have adhered1 to that policy ever since. This Government has established six refineries for motor spirit in Australia. In 1949, we were distilling 461,000,000 gallons a year. By last year, the figure had jumped to 1,141,000,000 gallons. I remind the Senate, too, that primary producers will still be paying only 161 per cent, sales tax on utilities and trucks. I point out, too, that other measures being taken in relation to the sales tax are also designed to help the primary producer.

Much criticism has been levelled at the Government on the ground that the measures taken by it over the years have been of a stop-gap nature. Let me deal with some of them. The 1952 Budget was shaped to withdraw something over £100,000,000 of the cash available for spending because the conditions prevailing at that time demanded a reduction in the purchasing power of the community. On the other hand, the 1958 Budget was designed to inject up to £110,000,000 into the economy in order to sustain the purchasing power of the people. There was nothing contradictory in those actions. The broad’ policy objective has been continuing expansion and development. That policy has not changed, and it has been very successful. As circumstances have changed, so have the measures to attain the objective of stability and development been changed.

What I am saying is that the Government is determined to create conditions which will sustain in the future, and for the sake of the future, the great development which has been achieved in the past decade.

Let us have a quick glance at that record. First, our population is increasing by more than 200,000, or 2.4 per cent., each year. This is one of the highest rates of increases in the whole of the Western world. Employment is at record levels. The number of registered vacancies is 50 per cent, greater than the number of registered unemployed. Earnings are high and rising. I should like honorable senators opposite to note that since this Government took office, average male earnings per week in real terms - that is, at constant prices - have gone up by 27 per cent. This rapidly expanding, fully-employed, well-paid work force has produced a community with tremendous purchasing power. New houses and flats are being constructed at a record rate. These are the visible signs of the real prosperity, based on extraordinary growth and production, which has occurred during the life-time of this Government.

Let us now look at rural production. It increased by 331 per cent, in 1959-60, despite the slight downturn last year due to seasonal conditions. This expansion has been achieved with virtually no change in the numbers engaged in production. According to the Australia and New Zealand Bank Limited, factory production has increased by over 80 per cent. Steel production has increased by 2,300,000 tons. Electricity generated has increased by more than 150 per cent. More than 80 per cent, of the farms in New South Wales now have rural electricity, compared with 20 per cent, before this Government took office. The production of superphosphate has increased by 67 per cent, or by almost 1,000,000 tons a year. In the eleven years since 1948-49, total private capital investment has been no less than £10,546,000,000. For 1959-60 alone, it totalled £1,313,000,000. I could go on for the next half hour quoting figures to show the advancement made by this country and the prosperity it is enjoying. Do not honorable senators want this state of affairs to continue? I cannot make them out. If they want prosperous conditions to continue, if they want Australia to progress, they must support this measure. As I mentioned earlier, what ever action the Government took would have been unpopular with the section of the community most affected by it. On this occasion, the motor industry is the one affected most. The Government knew that whatever it did would be unpopular, but, despite that, it decided to do what it considered would be in the best interests of Australia. That is the reason why I support the measure.

Senator TOOHEY:
South Australia

– I oppose the measure. It should be remembered that the motor body building industry of Australia has been singled out on more than one occasion by this Government for the imposition of a penalty; but nothing so savage as the penalty proposed now has ever been inflicted upon this industry before. Whilst they are fresh in my mind, perhaps I should refer to the statements made by honorable senators on the Government side about the impact that this increased tax will have on the motor body building industry. It will be remembered that Senator Anderson told us that the Government’s intention was not to reduce employment in that industry. Since then, Senator McKellar has stated emphatically that the bill is designed to reduce employment in the motor body building industry. The Treasurer (Mr. Harold Holt) also indicated clearly in his statement that it was intended to reduce employment in this industry. It would appear, therefore, that Senator Anderson is very much out of step with his two colleagues. Unfortunately, I am compelled to agree with both the Treasurer and Senator McKellar that this measure will cause unemployment in the motor body building industry.

Despite all the side issues that have been canvassed during this debate, I think the argument can be reduced to three simple points. The first is whether the bill before us is an anti-inflationary measure. The second is whether it will have some impact on one of Australia’s leading industries. The third and most important point raised by the Government in justification for the proposed action concerns the relation of the motor body building industry with overseas balances, with imports into Australia and with the general economy. I suggest that Senator McKellar’s eulogy of the Government’s alleged achievements in the economic field during its term of office was entirely irrelevant. If we to are arrive at a proper understanding of the measure, it is essential that we get back to simple considerations.

In recent years the sales tax on motor cars used by the general public - I refer to vehicles other than those used for business purposes - has increased from 16J per cent, to 40 per cent, in quick stages. On each occasion there has been a severe dislocation of the activities of the motor body building industry. One fact which the Government seems to have lost sight of, but which was very clearly demonstrated during the war years, is that that motor body building industry is one of the most efficient industries in Australia. When this country found itself in very dire straits indeed, this industry was able quickly to gear its activities to the war effort on a larger scale and in a more efficient way than any other industry in the country. If this industry is weakened, if anything is done to dislocate it, then, to that extent, the defence potential of the country is weakened. It cannot be denied that in the Second World War, General Motors-Holden’s Limited, and Chrysler Australia Limited to a lesser but still notable degree, did great things in putting Australia on a war footing. Had those two industries not been operating efficiently at the time - and that efficiency has been maintained - our war effort would have suffered considerably. It is an act of folly at this time to consider steps to weaken this important industry further.

I come now to the role of the motor body building industry in the general scheme of imports. In justification for these measures, the Treasurer (Mr. Harold Holt) and various speakers on the Government side who have followed him, have said that too great a measure of our imports has been diverted to the motor body building trade. Frequent reference was made in that connexion to steel. If there is a shortage of steel in Australia, it is to the external discredit of the governments. I am not so much worried about apportioning the blame and trying to score off governments on this matter because it is too important. However, it will be remembered that in the early days of the past decade, a distinguished South Australian set out to make governments alert to the serious position that was even then developing in the steel industry in Australia. I refer to Mr. Dickinson, who was Director of Mines in South Australia until a few years ago. He repeatedly alerted, not only the South Australian Government but also Australia in general, to the fact that the steel industry was not keeping pace with the general expansion of Australia. What a tragedy it is that to-day the Treasurer is trying to justify the dislocation of one of our greatest industries with the excuse - and it is only an excuse and not a reason - that the industry concerned is making too heavy a demand on the steel industry.

Sitting suspended from 5.45 to 8 p.m.

Senator TOOHEY:

– Mr. President, when the sitting of the Senate was suspended for dinner, I was referring to steel. I stated that I felt that this Parliament, and the State governments generally, had: not given sufficient consideration to the subject of steel, and with relation to the claim that had been made to the effect that the motor body building industry had been responsible for the shortage of steel in Australia I stated that that industry was being made the scapegoat for the shortage. Nothing would convince me to the contrary. It is interesting to note that although those who have sought to justify the attack that is being made by means of this bill on the motor body building industry have referred repeatedly to the demands that are made by that industry on the steel industry, no supporter of the Government, from the Treasurer (Mr. Harold Holt) down, has indicated the extent to which the motor body building industry has made demands on imported steel.

It would have been interesting to us to have been told of the percentage of imported steel that has been used in the production of luxury-type motor cars. It would have been interesting for the Senate to have been informed of the percentage of imported steel that comprises what are known as imported panels, which are assembled in this country. Motor car bodies in which these imported panels are used have little or no Australian content. Had the Government in this bill directed its attention to that aspect of the industry, there would have been some sanity or common sense in the measure. But no dissected figures have been supplied to us. Only the bald statement has been made that the motor body building industry of this country has made excessive demands on the supply of steel. I say that it has done nothing of the sort. If the figures in relation to the use of steel had been dissected it would have been shown that, contrary to what has been said - but not proved - by spokesmen for the Government, the motor body building industry of this country has not made a disproportionate demand on the supply of steel compared with other national requirements.

Another argument that has been advanced in support of the dislocation of the motor body building industry is that generally it has made excessive demands on imports of rubber and petroleum. I remind honorable senators that in the capital cities throughout Australia in many instances trams have been replaced by diesel operated buses, which make a tremendous demand on rubber and on petroleum products. This established fact has been skilfully evaded by Government spokesmen who have sought all along the line to make one industry - an efficient industry - the target of their attention and the scapegoat for the shortages that are evident in this country, because this Government and other governments did not have enough foresight to make sure that a sufficient supply of steel would be available consistent with the expansion that was taking place.

I noted when it was claimed earlier in this debate that similar action when taken in Great Britain had resulted in the dislocation of the motor body building industry in that country and had damaged the British economy - I refer to the action that was taken by the British Conservative Government along lines similar to the sharp increase of sales tax on motor cars proposed under this bill - Senator Hannaford, on the Government side, stated by interjection that that action had had nothing but a beneficial effect. That contention is not supported by Mr. Daunt, secretary of the Federal Chamber of Automotive Industries in Australia who, in drawing a parallel with the motor industry in the United Kingdom, had this to say -

Because of a high purchase tax on cars and restrictions on hire purchase, there is considerable depression and short employment in the vehicle manufacturing industry in the United Kingdom. The falling off in domestic demand and the consequent higher unit cost of production are inhibiting Britain’s penetration of .foreign markets. . . . The British motor industry is the U.K.’s biggest exporting industry.

Whilst I do not suggest that Mr. Daunt is an unchallenged expert on the question of the effect that similar action taken by Great Britain had on that country’s economy, I am prepared to recognize him as one who has equal authority with Senator Hannaford. Whilst Mr. Daunt’s statement does not completely disprove the statement that was made by Senator Hannaford, at least it makes the honorable senator’s statement open to challenge. I feel that we should pay as much regard to Mr. Daunt’s statement as to the statement of this Liberal senator from South Australia.

Senator Hannaford:

– I said that the British action had a stimulating effect on British exports.

Senator TOOHEY:

– I say that it did not, and I am not prepared to agree to the bald statement that has been made attributing the shortage of steel in Australia to the motor body building industry, which apparently Senator Hannaford made without producing figures to substantiate his claim. The motor body building industry is a basic secondary industry in South Australia. As Senator Ridley has rightly said, it is used as a measuring stick when the secondary industries in South Australia are being considered. Any depression or recession in the motor body building industry in South Australia is speedily reflected throughout the whole of the economic life of the State. It has been truly said that 11 per cent, of the work force in South Australia is directly employed in the motor body building industry. If there is added to those directly employed the number of persons indirectly employed on this work by General Motors-Holden’s Limited and Chrysler (Australia) Limited, it will be seen that this industry employs a substantial proportion of the work force in South Australia.

None of us can say with any degree of certainty the unemployment that will occur in the motor body building industry in South Australia as a result of the action that is proposed by the Government under this bill. But let us pluck a figure out of the air; let us say that 2,000 people in the industry in South Australia will become disemployed

Senator Ridley:

– That would be a conservative number.

Senator TOOHEY:

– I agree. What guarantee have we got that the men who will be displaced from the industry will be absorbed in other callings? What guarantee can Senator Hannaford or any other Liberal senator from South Australia give me that the men who will be disemployed in consequence of this action by the Government will in fact find other employment in South Australia? If they had to go to some other State to find employment, would not the Government’s action amount to conscription of labour? It would be nothing else. The Government’s action will result in these men being displaced from the motor body building industry, and the Government is leaving it to chance whether they will be absorbed in other industries.

Time is not on my side. I merely want to reiterate that no spokesman on the Government side has said anything to prove the contention that by increasing the sales tax on motor cars, and thus inflating the cost of cars, the effect of the measure will be anti-inflationary. It is ridiculous to say that this is an anti-inflationary measure. lt will add to the cost structure. It will add to the wages bill. It will create dislocation and trouble in an industry which has proved its worth in this country. I hope, therefore, that the Senate will reject the bill.

Senator WOOD:
Queensland

).- I speak to this bill after giving it a great deal of consideration. All the reports published prior to the making of the financial statement by the Treasurer (Mr. Harold Holt) on behalf of the Government led me to believe that the main problem facing this country was the shortage of overseas credits. To my surprise, when the financial statement was made it seemed to concentrate more on the internal problem than on the external problem. The Government set out the difficulties facing the country more or less in the following order: First, inflation; secondly, over-employment - which is tied up with inflation; and, thirdly, shortage of foreign exchange.

That is the impact that the Government’s economic statement made on my mind. But I think that the greatest problem we have at the moment is the shortage of credit overseas. This is a problem about which I have spoken in the Senate as much as has any other honorable senator on the Government side. It was evident to me for a number of years that it was essential for the Government to set its mind to the task of increasing Australia’s earnings overseas. After all, a country is like an individual in that it must live within its means unless it wants to go bankrupt.

The problem before this country for some time has been to earn sufficient money overseas to enable us to import goods as freely as we desire. As we all know, for a number of years we had in operation in Australia a system of import licensing which controlled the flow of goods into this country, so that we would live within the means that we gained from our exports. That situation has changed in recent times. The former buoyancy in the prices paid for our primary products sold overseas has been replaced with lower prices, and the results have shown clearly just how much this country relies upon its great primary industries for its well-being. I repeat that it has been evident to me for a long time that the essential problem to be solved in Australia is how to increase our overseas earnings.

I may be critical in the course of this speech, but I hope that I will also be constructive. I think that when one criticizes something one should also try to suggest some constructive alternative to whatever it is he is criticizing. The first question to be asked is: How did our present shortage of foreign exchange occur? 1 think it can be fairly said that it occurred primarily because the Government abolished import controls. In my opinion, if import controls had to be abolished, it should have been done progressively. Everybody wishes to see trade flowing as freely as possible and to eliminate as many government controls as possible; but it is unfortunate that the way in which the Government has dealt with import controls has engendered in the minds of many importers the fear that the abolition of import licensing will not last. Of course, it is easy to be wise after the event, but my own feeling is that it would probably have been wiser for the Government to lift import controls section by section. It could have lifted controls on, say, one-quarter of our imports, and when the importers had had an opportunity to discover what the buying demand in Australia was, some satisfactory basis of importing those items could have been arrived at.

I believe that what is happening now is that many importers are bringing into the country more goods than are necessary. That is what happened on the last occasion when import licensing was removed. It is unfortunate that the importing side of Australian business has in some cases not shown more responsibility in this matter. Importers should have appreciated the position when the controls were lifted, and shown a more sensible approach to importing. But what do we find to-day? It is possible to walk into some stores and find imported canned chicken, imported deepfrozen chicken, imported frozen peas, and so on. Surely to goodness there is no need to import items of this sort which we are quite capable of producing for ourselves, to as high a standard as represented by the imported commodities. At kiosks and such places at airports and elsewhere one can see for sale Dutch and Swiss chocolates at much higher prices than those at which Australian chocolates are available. All this indicates to me some lack of responsibility on the part of importers, who have not lived up to the trust that the Government reposed in them when it lifted import controls.

I think that if import controls had been removed in sections, confidence would have been built up in the minds of importers and we might have had from them a more sensible approach than they have shown so far. In any event, we are now in the position of being short of overseas exchange, and the next question is: How can this shortage be overcome? The Government’s proposed increase of the sales tax on motor cars comes in here, because imports for the automotive industry are one of the elements which the Government has in mind in relation to the foreign exchange problem. My own feeling is that if we are in a desperate situation the Government has to face, up to the necessity of reimposing import licensing. If the matter is really serious, and requires to be dealt with urgently, I cannot think of anything else that would do the necessary job as quickly, in order to give us a breathing space - because some breathing space is necessary if the Government is to develop an imports policy with some permanency of character. It is a permanent solution to the imports problem that we really want.

My other suggestion for a fairly immediate solution to the problem also relates to motor oars. Some few years ago I made a speech in this Senate, dealing with this very problem. That speech was made on 15th September, 1955, during the debate on the Budget, and in it I pointed out particularly that the manufacturers of Holden cars had stated that they were selling some cars in New Zealand. I stressed that Australia should encourage, the export of cars to other countries, in order to earn foreign exchange. I think it would be a very good thing if the Government arranged conferences with manufacturers and other business people in an attempt to make them see the necessity of aiming in certain directions. For instance, the Government could point out to car manufacturers how essential it is for them to help the country in order to help themselves. In every car made in Australia there is always an import element involved. The Government could point out to the car manufacturers that, instead of relying on their sales to the Australian market alone, they should attempt to sell some proportion of their production overseas in order to earn foreign exchange. This would to some degree at least offset the cost to us in foreign exchange of the import element in Australianmanufactured cars, lt should be put strongly to the manufacturers that it is essential for them to earn Australia some foreign exchange by exporting some of their production, if necessary by selling their cars more cheaply overseas than they are sold on the Austraiian market - even at cost. In this way they would be helping Australia and helping the Government, which allows them, in the first place to import their requirements.

Senator Buttfield:

– That is a very nice thing for one of my colleagues to say.

Judging from the telegrams that I have received from all over Australia, not only from individuals but from the motor industry, it would seem that the industry is very happy that some of us have taken an interest in this particular tax. Whether the honorable senator has an individual case or two in mind I do not know, but I can show him plenty of telegrams that have come from every State in Australia. Some of them have come from the State that he represents - Western Australia.

– I will come to that. As I say, the Tariff Board’s staff will have to be provided with houses, and the total cost of moving the board from Melbourne to Canberra will be probably in the vicinity of £1,000,000. Senator Scott asked me whether I did not think we should build up our National Capital. Of course we should, and industrialists should also be able to build up their industries, and people should be given an opportunity to buy the things they want. If we tell people to cut down their spending, should we not set them an example? In Canberra we are to have a lakes scheme which is estimated to cost £2,500,000. By the time it is completed, and bridges are built and boulevards constructed around the lakes, the cost will probably be closer to £6,000,000. While I agree that the National Capital must be built, if this is a time of inflation, a time when we are short of materials and labour and many other things, surely we, as a government, should set an example and show that we can do what we are asking other people to do. Until we do so, I do not think the people will be very impressed with our exhortations. We will have to practise what we preach.

Let me make another observation in the few minutes remaining to me. In the controversy that has resulted from the introduction of this legislation many comments have been made. Of course, the newspapers have made a feature of the argument that has centred around it, and many views have been expressed about what certain senators are going to do and say. Within the last few days I read some remarks concerning Senator Wright and myself. I shall speak only for myself, because I am sure Senator Wright is able to look after himself. I read a statement in the press the other day to the effect that Senator Wright and myself are nonentities. We come from different States. I do not think that Senator Wright is a nonentity in his State. If I am a nonentity in my State it does not matter very much. I read also that Senator Wright and I are going to vote against this measure for the purpose of self-glorification. If I, as a Liberal senator, vote against this legislation - and I am sure this goes for Senator Wright too - it will not be for the purpose of self-glorification, because a vote of that kind will entail very great responsibility, and the possible consequences are such that no senator would vote in that way simply for self-glorification. I want to make it quite clear that I do not take this stand for the purpose of ;self-glorification, for publicity, grandstand ing or limelighting, or because of any holier-than-thou attitude. The way I vote will be determined only by a sincere belief that it is the right way to vote. I have always adopted that kind of attitude throughout my public life, right from the days when I was interested in civil administration in the city of Mackay.

Some newspapers asked what right the Senate has to knock back legislation of this character which has been passed by the House of Representatives. This is a federal system, and the people in this Senate are elected, just as are the members of the House of Representatives. If we look at Mr. J. R. Odgers’ book, “ Australian Senate Practice “, we will find on pages 167 to 172 many examples of cases in which the Senate has requested alterations to money bills, and has had those alterations made. In the report of the Select Committee appointed to consider and report upon the Constitution Alteration (Avoidance of Double Dissolution Deadlocks) Bill, dated 28th November, 1950, paragraph 115 says -

Going back to 1939 it is well to place on record the performance of the Senate as a States House in connexion with the Gold Tax Bill 1939. This Bill was introduced by the Menzies Government and it came 10 the Senate on the 20th September, 1939. Western Australian Senators objected to the measure on the ground that the proposals would retard the expansion of the gold-mining industry in Western Australia. At the time there were three Labour and three non-Labour Senators from Western Australia. Although the Menzies Government was in a majority in the Senate, the Bill was defeated on the second reading when two of the nonLabour Senators from Western Australia joined with the Opposition in defeating the Bill. (The other Western Australian non-Labour Senator was a Minister and no doubt considered himself bound to support the Ministry.) Then there is the Senate’s record on the Tariff, which is of great consequence to the States. The records of the Parliament bear testimony to the fact that, on tariff questions, party affiliations have been subordinated to State interests.

The Senate has exercised its powers in the past. It has power to reject a bill such as this.

When votes are checked in this chamber they are not counted on a party basis. Ti two or three senators from this side vote with the Opposition, the result is determined merely on the numbers of senators voting for and against. As I said at the beginning, Mr. President, this question has caused me a great deal of concern. Whichever way I vote, I will do so after having given the matter a good deal of thought. 1 know that if I vote for the legislation, it will be said that I have submitted to pressure and so on. If I vote against it, it will be said that I am voting against my Government and trying to wreck it. However, the only way I can vote in this chamber is the way that I conscientiously believe to be right for the people of this country and of my State of Queensland in particular. When I cast my vote, it will be cast according to my conscience.

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

– in reply - I would like to assure Senator Wood, who has just resumed his seat, that every one of his colleagues who will be voting on this measure will be voting according to his conscience. The honorable senator does not enjoy any exclusive property in respect of conscience or conscientiousness. Senator Wood took a long time to get to the subject of sales tax. He addressed himself to a variety of subjects. He spoke with scorn of the fact that in some stores in Australia to-day it is possible to purchase snails in aspic and frogs legs. I suggest to the honorable senator that if he pursued his inquiry just a little further he would soon discover that articles such as these come into this country as a result of reciprocal trade with other countries, to which we sell our wool, wheat and other products. He spoke of the potential of the tourist industry, of what might be done with the film industry, and of what might be done to develop a market for coal in Japan. All these matters, of course, are important, but the matter that the Senate is considering to-night is a measure which will have an immediate effect on economic circumstances which require immediate attention.

It may be well for the Senate to remind itself of the circumstances which prompted the Government to introduce this measure. It may be well to do so, because Senator Wood inquired why we had discriminated against the car industry and why we had picked on the car industry. May I state the reasons? The level of car registrations in Australia is rising. When the Treasurer (Mr. Harold Holt) made his economic statement last month, he said that until the end of October registrations were occurring at the rate of 330,000 a year, or, I remind the Senate, more than 1,000 for every working day. But since he made this statement the rate has increased and now registrations are not at the rate of 330,000 a year, but at the rate of 357,000 a year.

Senator Wright:

– Have you the figures for cars alone?

Senator PALTRIDGE:

– No, that is the number of vehicles. The rate of expansion of the motor vehicle industry has set up demands on capital and resources that are adversely affecting other industries. I do not think that that would be denied. No primary producer would deny it. This industry is demanding labour at an increased rate of 9 per cent., as against a rate for general industry of 4 per cent. It is creating a demand for hire-purchase finance that is increasing year by year to the detriment of other borrowers. It is creating a run on overseas funds which has increased remarkably; it was almost 25 per cent, in the last period for which figures are available. The total demand that this industry makes on our export funds runs at a figure which is 20 per cent, of our total imports.

Faced with this set of circumstances, the Government decided that action should be taken. I remind the Senate that those who vote against the bill will express the view that this action should not be taken to rectify the position and that the position should be left unaltered. We believe that a restraint should be placed on the industry. We believe that it should be a restraint not to hurt or to cripple but to curb the rate of expansion which is so obviously out of proportion to the rate of expansion of other industries.

The measure is opposed by the Australian Labour Party. That is not very surprising. The Labour Party, in its view, is here to oppose, and, for that reason, I do not want to say a great deal about the case that was put by the Opposition. I did permit myself something of a wry smile when I heard the. Leader of the Opposition (Senator McKenna) advocating the cause of the Australian motor manufacturing industry; only a few months ago he was demanding that action through taxation be taken against this industry, which was a monopoly and a canker within the Australian economy. He says now, “ You will not cut down the run on overseas funds; you will not restrain internal demand and thus restrain inflation”. With that characteristic tear jerk, with which we are all familiar, he said, “ You will create raging unemployment “. If ever two ideas were in conflict, one with the other, surely these are they. That is the measure of the opposition of the Labour Party.

On this occasion, two senators who sit behind the Government as members of the Government parties have expressed opposition to the measure. Senator Wood seemed to rest his main opposition on a fear of unemployment. I have given figures to show the rapid rate of expansion of this industry in recent years. Further figures, which I will give later, will show quite plainly to Senator Wood that unemployment of the type that he fears will not occur and in fact did not occur when sales tax was increased in 1956. What happened was that there was an initial restraint from which the motor industry recovered by virtue of an expanding industrial activity and of an increased population. While there was then, and will be on this occasion, some displacement of labour, it is perfectly obvious that in the state of overfull employment which exists in Australia there will not be anything of the unemployment which Senator Wood fears.

Senator Wright opposes the bill because he says that it will not restrain domestic inflation, nor will it assist the overseas position. He opposes the bill on the one hand because he says it will not be effective, and Senator Wood, on the other hand, because he says it will be too drastic. As a guide to what will happen in this year of grace let us see what happened in 1956. I propose to use the registration figures that were quoted by Senator Wright during his speech on this bill. In 1955, a total of 168,914 vehicles were registered. Early in 1956, the sales tax on motor vehicles was increased. In that year 143,000 vehicles were registered - a decrease of approximatly 26,000 compared with the figure for the previous year. In 1957, the figure rose to 149,000 - an increase of almost 5,500 on that for the previous year. In 1958, the number rose to 154,800 - an increase of about 6,000 on that for the previous year. In 1959, the number rose to 163,174. Those figures are significant. In 1955, registrations totalled 168,914; in 1959, the figure was 163,174. In other words, over a period of some four and a half years the number of vehicles registered declined initially and rose subsequently, because of natural expansion, to approximately 163,000. The figure reached in 1959 did not equal the 1955 figure.

During that period there was a restraining influence on the purchase of cars within Australia. There was a restraining influence on the use of overseas funds and on labour. But during that time the industry was in no sense stultified. Expansion was taking place within the industry. A greater degree of assembly of motor vehicles was undertaken in Australia. New ancillary factories were created here. At the same time, the sales tax kept registrations to a manageable limit.

Senator Wright addressed himself to the effect that the proposed increase might have on exports. The story told by the figures in relation to exports is an interesting one. In 1955-56, the total value of exports in this field was about £772,000. In 1956-57 - after the sales tax had been increased - exports were worth £1,834,000. In the following year the value of exports of motor vehicles dropped to £1,110,000, but that was mainly due to the imposition of restrictions by the New Zealand Government. In 1958-59 the value of exports rose to £1,412,000, and in 1959-60 the value of exports hit an all-time high of £2,119,000. It will be seen that the value of exports rose after the imposition of a tax which it is now said will adversely affect the export market.

Senator Cooke:

– That happened in spite of the Government’s action, not as a result of it.

Senator PALTRIDGE:

– Those are the figures. If Senator Cooke wanted to speak in this debate I have no doubt we would have heard him, as we usually do, in silence, but not with much attention.

I have quoted those figures to show that although the increase in tax in 1956 did impose a restraint on the trade, it nevertheless had the effect of promoting an expansion within the trade which was not disproportionate to the expansion going on elsewhere within the economy. This is precisely the reason why it is now necessary for the Government again to move. Government action is necessary at this stage not because the motor industry is causing a record level of registrations, but because it is taking from other industries, due to its robustness, resources which those other industries need. If you are to establish an export market it is imperative that the goods you export be costed as cheaply as possible. When exporting industries are forced to compete for essential materials with an industry such as the motor industry, they find themselves unable to compete on overseas markets. Take the case of primary industries. Is any primary industry in Australia opposed to this measure? Senator Wood seems to think that some of them are. I will have more to say about this matter in a minute or two, but I assure Senator Wood that primary industries are not opposed to this measure, because they know how difficult it is to get farm machinery, wire and steel posts with which to carry on their industry. lt has been said - I repeat this - that the effect of this tax will be kept under review. Something that Senator Wright said in his speech suggested that if he could feel confident that this tax was of a temporary nature he would feel better about it. As a matter of practical administration, how could a government give the assurance that Senator Wright seeks? Does he suggest for one moment that, except in the most general terms, a government could say that this is a temporary measure to remain in force for so long? Could it say even that it is a temporary measure? Such statements would bring chaos to the industry. They would create the very unemployment that Senator Wood fears so much.

Something has been said about the nature and source of criticism of this measure. We in Australia live to-day in a fairly realistic atmosphere. We who spend our lives in the political arena in this country know how politics are played to-day. Trade unions are not slow to get in touch with their federal members when legislation which affects them is before the Parliament. Trade associations are just as quick to act. Senator Wood, apparently, takes some satisfaction from the fact that he has received a number of telegrams sent on behalf of the motor industry in my own State, Western Australia. Of course he has. I was in Western Australia the week-end before last. While I was there, I interviewed a number of motor traders who are friends and acquaintances of mine.

Senator Cole:

– Still?

Senator PALTRIDGE:

– Of course they are. I told them precisely where I stood and where the Government stood, and their reply was, “ All right. We shall get in touch with Senator Wright and Senator Wood “. Those honorable senators have received telegrams, and I am glad they have them.

Another aspect of Senator Wright’s speech should be referred to. I have mentioned the reaction of primary industry. I was intrigued by the honorable senator’s reference - his tribute, almost - to the Minister for Trade (Mr. McEwen). The honorable senator, very properly, paid high tribute to the Minister for his efforts to correct Australia’s trade position and to the remarkable achievements which he has brought about.

Senator Wright:

– Positively.

Senator PALTRIDGE:

– Positively! But the honorable senator must know that the Minister for Trade supports this measure. Would he do so if it were damaging to his own policies? Would the party which he leads in this Parliament support this measure if that party thought that the primary industries would suffer as a result of the proposal to which this bill will give effect?

Senator Wright:

– It was not a personal matter. On the occasion which I mentioned, the Minister received representations as a representative of the Government.

Senator PALTRIDGE:

– As the honorable senator said, the Minister acted as a representative of the Government.

It has been suggested further, in a vague, nebulous and airy-fairy way, that, whatever we do otherwise, the imposition of additional sales tax is not the right way to give effect to the Government’s measures. I put it to anybody who wishes to consider the matter that, in the light of our experience, this is in fact the best way to achieve the quick result that we want. It cannot be correctly said, as some people have tried to suggest, that in achieving the quick result that we want we are imposing some extreme hardship on the people of Australia. In this country, Mr. President, there is one motor car to every four persons. I heard

Senator Kennelly the other day rather gilding the lily when he told the Senate that in Victoria there was one car to every three and a half persons.

Senator Kennelly:

– One registered vehicle.

Senator PALTRIDGE:

– I accept the correction. In Victoria, there is one vehicle to every three and a half persons.

I think it can be fairly said that some people approach this problem along a pretty narrow road. I remind the Senate that this sales tax proposal does not stand in isolation. It is one of a number of measures recently announced by the Government. It is part of a plan the main objective of which is the conservation of overseas funds.

Senator Cant:

– The Government has not completed last year’s plan yet.

Senator PALTRIDGE:

– I suggest that if my friend, Senator Cant, or any one else would like to destroy the overseas loan market and overseas confidence in this country, such a purpose could best be achieved by the Australian Government’s failing to take resolute action such as will win the confidence of overseas investors. 1 know that that argument does not appeal greatly to honorable senators who sit opposite. I address it particularly to Senator Wood, who has expressed some concern about overseas funds and the confidence of overseas investors, and who has emphasized their importance.

I think it has been amply demonstrated that, in the existing economic circumstances, this measure is prudent and wise. It is designed to restore to the economy the stability which has been upset by what may be described as the temporary excesses of the motor industry. That the Government’s measures are unpopular in some quarters does not deter us. As we are frequently reminded by the Opposition, this Government has now been in office for eleven years. During that time, it has from time to time felt compelled to take action regardless of whether it was unpopular. This is not the first time that the Government has felt it prudent and necessary to take action which appeared to discriminate against one industry. We have taken prudent and necessary action for eleven years regardless of a discriminatory effect against one industry.

Who will gainsay the fact that over the eleven years during which this Government has been in office, as a result of the work, initiative and resourcefulneses of the Australian people, taking everything into account, we have seen expansion and development of a kind never before experienced in this country?

Some people say that on this occasion their judgment as to whether the sales tax on motor vehicles should be increased from 30 per cent. to 40 per cent. is better than the judgment exercised by the Government. No question of principle is involved. It is a matter of judgment whether the motor industry should be for the time being subjected to sales tax at the rate of 40 per cent. I ask the Senate to regard all those things that have gone before, as well as the rate of progress and expansion that has been maintained under this Government’s administration, and to trust the Government’s judgment on this occasion.

Question put -

That the bill be now read a second time.

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

AYES: 29

NOES: 29

AYES

NOES

The PRESIDENT:

– The numbers of “ Ayes “ and “ Noes “ being equal, the question is resolved in the negative.

page 2044

BILLS RELATING TO SALES TAX

Motion (by Senator Paltridge) put -

That the second reading of the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1960 and of the Sales Tax Bills (Nos. 1 to 9) 1960 be made orders of the day for the next day of sitting.

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

AYES: 29

NOES: 29

AYES

NOES

The PRESIDENT:

– The numbers of “ Ayes “ and “ Noes “ being equal, the question is resolved in the negative.

SALES TAX BILLS (Nos. 1 to 9) 1960.

Second Reading

Consideration resumed from. 1st December (vide page 1894), on motion by Senator Paltridge -

That the bills be now read a second time.

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

AYES: 29

NOES: 29

AYES

NOES

The PRESIDENT:

– The numbers of “ Ayes “ and “ Noes “ being equal, the question is resolved in the negative.

page 2044

CRIMES BILL 1960

Second Reading

Debate resumed from 2nd December (vide page 1998), on motion by Senator Gorton -

That the bill be now read a second time.

Upon which Senator McKenna had moved by way of amendment -

Leave out all words after “ That “, insert “ the bill be withdrawn . and redrafted because it fails to repeal objectionable features of the Crimes Act, including political and industrial offences and the death penalty, and because it fails -

to preserve the rule of law and the principles of natural justice in trials for serious offences;

to achieve certainty and precision in the definition of these offences;

to ensure the application of long established rules excluding evidence of the character of an accused person on trial for these offences; and

to guarantee freedom to do anything In good faith of a substantially religious or humanitarian character “.

Senator KENNELLY:
Victoria

.- I suppose, Mr. Deputy President, that it could be called rather an anti-climax to rise and discuss another bill at this moment.

However, I believe that the Crimes Bill 1960 should receive the deepest consideration of this House, because it is an extremely serious bill. It is true that the bill, in the form in which we have it before us, differs very greatly from the bill that was originally introduced in another place. The Minister who introduced the bill in another place more or less implied in his second-reading speech that the only people who would oppose the bill - which, at that time, of course, was in its original form - would be members of the Communist Party. The implication was that there would be no other opposition to the bill. Without doubt, as the provisions of the original bill became known to the people of this nation there arose widespread objection to it in a number of different sections of the community. One of the big church organizations expressed its view on the bill, and views opposing the measure were also expressed by civic bodies, people and organizations interested in civil liberties, the trade unions - which play a most important part in the nation’s affairs - and even by that great organization of blackcoated workers, the Australian Journalists Association. The last case is most interesting because, as a rule, like other black-coated workers journalists allow others to do their fighting and they take the cream. But at least in this instance they did come into this fight.

The result of all that opposition to the bill as originally submitted to the Parliament was that the Attorney-General (Sir Garfield Barwick) initiated in another place 22 amendments to the bill, some of them of a major nature. To my mind this was certainly a tremendous climb-down. But it was a good thing for the people of this country that at least after his trip to the United Nations which, one could say in passing, could not have been considered a very happy one in view of the events there, the Attorney-General did submit those 22 amendments to improve the bill.

Now let us consider the bill in the form in which it has come before this House. The Labour Party says without hesitation that the bill fails to repeal objectionable sections of the original act. The Labour Party is concerned with sections 30j to 30r, under which participation in a strike may be punishable by imprisonment for one year. I admit that those provisions have been in the act since 1926 and that I cannot recall an occasion on which they have been used but that does not mean that the provisions ought to remain. The day may come when some one will use them. The Opposition believes that persons should have the right to refuse to work if they do not believe that the conditions under which they work or their rates of remuneration are just.

Another provision contained in sections 30j to 30r allows the deportation of members of bodies declared to be unlawful associations by the High Court of Australia or a Supreme Court. What is meant by “ unlawful associations “? A man might classify a number of associations as unlawful if he desires to take the trouble to do so. He may not like them. I saw things happen in Australia in 1939 and 1940 and in the years of the First World War which I believe would shock any one. During those years the security of the country was more or less in the hands of the Army, and many people were placed behind barbed wire. Therefore, the Opposition believes that these sections should receive some consideration. We believe that it is not in the interests of this country that they should remain.

We believe that there should be amicable understandings between the employees and the employers. We believe that a man is worthy of his hire, and that if he desires to fight for just wages by abstaining from work, even to the great annoyance of a section of the people, that is his right. I candidly admit that long strikes cause very grave hardship as a rule, particularly to the wives and families of the men concerned. The history of the lot of the man of toil - the man who has nothing to sell but his labour power - shows that if he had not taken action over the long years, however much of a nuisance it may have been considered, he would not have achieved even conditions that he has to-day. Over the long ages, workers throughout the world have won improvements, not by wishing for them, but by fighting for them. Some of the fights, thank goodness, have not been of long duration. Others have. Therefore I believe that legislation which makes a person who goes on strike liable to a penalty, as this legislation does, is bad.

Section 13 of the act allows any individual to institute proceedings for summary conviction instead of that responsibility being exercisable only by the AttorneyGeneral. Under section 30ab, the AttorneyGeneral, if he believes that a person has in his possession any information relating to an unlawful association, can require him to answer questions, furnish information and allow inspection of documents. If the person concerned does not comply with that provision, he is liable to a penalty of six months’ imprisonment. That is contrary to every principle of British justice of which we have heard. I suppose that we have all used that term “ British justice “ over the years. Under section 30ab of the act a man could be forced to supply information which would incriminate him. Under the American Constitution, a citizen of the United dilates of America cannot, on any account, be forced to incriminate himself. The Opposition believes that that is a good law, and that we can lose nothing by copying a good law so that our people may be placed on an equal footing with those of the United States of America. 1 believe that section 30h is tremendously wrong. It permits the acceptance, as proof of membership of an unlawful association, of the fact that a person has attended meetings, distributed literature or spoken publicly in advocacy of the objects of the association. 1 think that a lot of us could have been found guilty under this provision because of things that we did in our young days and, as to some of us, in our not so young days. I remember, as a young boy, going to the Yarra Bank in Melbourne. I enjoyed going there. The Industrial Workers’ of the World Organization was at the height of its activity around 1916 and I enjoyed its rallies. Even then I did not altogether agree with what the members of that organization said. In view of section 30h of the act, it is very fortunate for some people that Hyde Park in London is not situated in this nation, because a lot of the speakers there would certainly come under this section. Some say, “ The act has not operated so far, so why worry? It will not operate in the future “. One never knows what the future holds. It is always wise to guard against the future when people have power without knowing how to use it properly. The Labour Party believes that there should be substantial amendment of some of the existing sections in the act and that some of them should be repealed altogether.

This bill creates new offences and makes provision for very heavy penalties therefor. One of those offences is treachery, the penalty for which is life imprisonment. No doubt we will have plenty of opportunity to read the definition of that offence when we get to the committee stage. Sabotage is another of those offences. After what we have just gone through - I admit that the strain upon me was not so great - I do not propose to read the definitions of these offences just now, but will leave them, as I said, until the commitee stage. I merely remind the Senate that the penalty for sabotage is fifteen years’ imprisonment. It is the duty of my leader, of course, to speak for my colleagues; but I believe I am voicing the sentiments of all of them when I say that not one of us on this side of the chamber wishes to see this country of ours harmed. I also believe that, if it can be proved that a person has committed espionage against Australia, he should be dealt with. The same remark applies to the offences of treachery, treason and sabotage. But we believe that the act which brings a person within the scope of the legislation should be proved.

We of the Labour Party do not believe in imposing the penalty of death. I defy any one to rise and say that statistics relating to criminal proceedings show that there has been a reduction of crime in countries that have adopted the death penalty. I do not think any one has been hanged in Queensland for many years, but no one would suggest that there are more murders in that State than there are in Victoria. However much I deplore the crime of espionage. I do not believe that the imposition of the death penalty would prevent that crime being committed. It seems to me that the person who drafted this bill must have thought of the Old Testament and of the words “An eye for an eye and a tooth for a tooth “. However effective that approach may have been in days gone by, it does not work now. One wonders why this provision for the death penalty should have been Included in this legislation when it has been shown throughout the civilized world that it does not act as a deterrent.

Very vague phraseology is used in the bill, particularly in the clause which deals with prohibited places. I know of areas in Melbourne where one could get very near to prohibited places. In fact, only dive or six strands of barbed wire would -separate a person from such places. I am informed, though, that there are peace officers on duty. I think in particular of one which is a very hush-hush place. If a person were to pass by there and some one else believed ‘that it was his intention to gain information, the first person could ‘be sent along to a court and could be convicted if at some time or other he had belonged ito some undesirable organization. Every one knows that I do not support the Communist Party; but I am bound to say that, according to the vote of the people of this country and whether we like it or not, it is a legal political party. I am apprehensive abo’U trie fact that even a member of the Communist Party could be convicted and sentenced without .proof of his commission of the act complained of. I am a little concerned when I recall that as a young lad back in 1916 with eyes and mouth open I listened to some of the very good orators of the group .known as the “ Wobblies “. To include vague phraseology in such a bill is a shocking thing to do.

Let us consider the term “ levies war In legal circles that term has a different meaning from that attributed to it by the ordinary layman. What concerns me about certain of the provisions in this legislation is that it is not necessary to have proof of the acts complained of but that provision is made for the known character of the accused to be taken into account. I can recall a few of the members of the I.W.W. - the Industrial Workers of the World - being sentenced to sixteen years’ and 21 years’ .’imprisonment during a campaign of hate. A hate campaign can be easily started in this country. Everybody knows that the people’s minds are steeped in whatever four men in this country want to instil into them. Williams, Packer, Henderson and Fairfax control the press of .the nation. As I have frequently said, they also .control the main wireless stations and .the major television stations. They can get together and inflame the people’s minds. There does not need to be a state of war. What could happen then? It is not enough ,to suggest what would happen; 1 am concerned with what could happen, because .a major consideration would be the circumstances existing at a particular time. Therefore I say that the vagueness of the phraseology of this bill should give every person considerable thought. There is not , one senator on either side of this chamber who does not desire to have the country protected. We all want it protected, but we have also a responsibility, when considering legislation of this kind, to make the legislation as precise as words can make it. I believe that in this case it is not precise, and it is this defect that causes me grave concern.

The bill introduces a new concept in that it requires loyalty to countries other than Australia. lt could conceivably be an offence to assist a country with which Australia enjoys friendly relations. I heard Senator Hannan make his speech, and I thought then of the blood that runs through his veins and the blood that runs through mine. I heard what he said about this bill, and I remembered what happened in Ireland not so many years ago. We could have in this country a group of people of Irish extraction who do not agree with the set-up in Ireland at the moment and who favour a united Ireland. Of course, I am not like Senator Hannan, whom I regret is not present at the moment. I do not put people out of meetings. I do not like to be put out of a meeting myself. But the matter goes further than that kind of consideration.

To my mind the most dangerous trouble spot in the world to-day is Cuba. If any one reads the history of Cuba he will ask himself, “Why should the Cuban people not have better conditions than those under which they have been forced to live for many years, and which can only be described as shocking? “ If war broke out between the United States of America and Cuba - I sincerely hope that it does not, but I do not like the present situation, with the United States Marines on Cuba’s doorstep - and any .one of us got up and said a word in favour of Cuba after the United States was made a proclaimed country, we would face a strong possibility of getting into trouble. No one can say that in this day and age w£ should agree with a provision that would involve such a possibility.

I have no unfriendly feelings towards the United States of America. We owe that country a great debt of gratitude. This does not mean, however, that it is always right. Nor does it mean that we are always right. I have read a little about Cuba, however, and I give the Castro regime a lot of credit for what it has done, because it is improving the conditions of the ordinary people. Perhaps I should take the opportunity of saying that now, because I may not be able to say it after the bill is passed.

Senator Ormonde:

– You can say anything here.

Senator KENNELLY:

– I realize that, but I also believe that once a law is passed we should respect it. I think the proposed law is bad. I do not think it is needed. If the Government has a reason for proclaiming a particular country in preference to another, let it tell us what it is. If this legislation is aimed at a particular country, tell us what that country is. We are not an unreasonable group of people, and we want to know. As the bill is now drafted, 1 cannot see how any one will know. I believe this legislation will provide a tremendous feast for the lawyers. As a rule lawyers look after themselves pretty well at any time, but when legislation is passed in the form of that which we are now discussing, they are provided with a feast.

I say again that any provision to allow evidence of known character to be introduced is extremely dangerous. It is contrary to British practice, and British law. We stand up in this Parliament and proclaim our belief in British justice which gives the lowliest citizen the same rights as those enjoyed by persons in the highest positions in the land. We boast of our glorious freedom. Yet we are confronted with this legislation which will allow evidence to be given that an accused person was a member of some organization or other in his youth. Certain senators on the Government side have, at one time or another, changed their political opinions. We also have some on our side. I cannot see any merit in this provision concerning evidence of known character.

Now I come to another aspect of the legislation that has caused me grave concern. It is true that the Government has amended the bill in another place so that acts done in good faith shall not constitute an offence under the sabotage section. However, while there remains in the bill the provision regarding evidence of known character, the trade unions will continue to be concerned about it. The trade unionists constitute as loyal a body of men as there are in this country. They have always been concerned for the welfare of the nation. They have proved this in the two great conflicts in which we have been involved. During the last war in particular they worked long hours so that not only our own servicemen but also those of other countries that helped to keep us out of danger could be provided with munitions and fed. Why should we include in our legislation provisions such as this, which can only cause them a good deal of concern?

Trouble could break out on the waterfront. It could start, for instance, over certain provisions in the Stevedoring Industry Bill, which caused a week’s stoppage in Melbourne, where the seamen claimed to be entitled to lift passengers’ luggage and take on some stores. The men on the waterfront said that it was their job, and they really believed that it was. They believed it so strongly that they stopped work for a week. It is true that they are led by Jim Healy and one or two others, but they are not as easily led as some people believe. They have minds of their own. Decisions to bind thousands are not made by a couple of hundred. As a rule, the vast majority of them attend stopwork meetings. Like all other sections of the community, many of them no doubt have hire-purchase commitments and so on. They do not readily stop merely for the sake of stopping.

I admitted at the outset that this bill was much better than the bill which was originally introduced, but it still leaves these men guessing; they are not sure whether their actions come within the ambit of the bill. I am always afraid, in times that are not normal, that some person, believing that he is right - many people believe they are right when they are wrong - will do some act that will bring him within the scope of provisions such as these. One does not know the extent to which these provisions would be used against, say, men who stopped work for what they believed to be a just cause, when they were working on a ship being loaded with provisions or munitions for Malaya, though this may not have anything to do with the dispute. Because of the vagueness of the provisions and the lack of definition, the unions have a perfect right to be extremely suspicious.

– I am as delighted as you are. The Government has had this problem solved for it by the amount of hire purchase taken by the workers. By clever advertising, firms induce people to get themselves involved in hire purchase, and the good lady at home, sees that the breadwinner does not lose much time in disputes. That is the reason for the decrease in the number of hours lost. But still, I want to see the workers happy and contented. I want to see them working under good conditions and without any uneasiness of mind. I do not want them to stop pressing their claims if they think they have a grievance; I do not want them to suffer any grievance. In the world in which we live on this side, an injury to one is an injury to all. If there is a wrong, we want to see it righted, and we do not recognize any claims that the time is inopportune.

The provisions of this bill are creating uneasiness amongst the trade unions. It is true that the demonstrations that were held here did not achieve much, but at least they showed that there is a grievance, and they showed this by weight of numbers. I am a great believer in numbers. A great many bills have been submitted to the Parliament, and they have dealt with virtually everything under the sun; but the unions showed by numbers that they believe they have a grievance against the provisions of this bill.

Senator Ormonde:

– The numbers were here to-night!

Senator KENNELLY:

– Perhaps we should not barrack about that. As my friend knows better than I do, it is always wise to be humble in victory.

This bill is wrong. It is creating a set of circumstances that will not help the Government. I do not say that the matters that I have envisaged will occur next week, next month or next year. I do not know whether they have actually happened since some of the bad provisions were put into the old act as far back as 1926. I am one of those who believe that there should never be bad legislation, because those who have the responsibility for applying the provisions of such legislation may change, and I am always careful about the future. I believe that where there are penalties such as those provided under this bill, it pays a person to be wise and to be careful. This bill affects not only the trade unions but also a great many other people.

I want to be clearly understood: I would not be backward in dealing with people who had committed these grave offences against this nation, if it was proved, according to the principles of British justice as they apply in this country, that they were guilty. I want to protect this country, but I want a person accused of these offences to have the rights that other accused persons have.

He should have the same rights as a person who is accused of murder has - and I suppose that murder is the worst crime in the civil code. If such a person cannot afford to engage a lawyer, a lawyer is provided for him. His character is never taken into account, until the jury has delivered its verdict. His character is not used in an effort to obtain a conviction. Some frightful crimes have been committed in this country, as in other countries, but persons accused of them have been given certain rights under the law. We do not think that the provisions contained in this legislation are in the interests of the people of Australia. People of all shades of political opinion, even supporters of the Liberal Party, are opposed to this measure. The provision relating to a person’s known character is most obnoxious. Is a person an anarchist or a Communist because he distributes a certain type of literature? Today, all political parties, even the Liberal Party, are swinging to the left. However, the Liberal Party is very slow in making its turn to the left.

I deplore the introduction of the bill at this time. No restraint should be placed on the freedom of the subject except where his guilty intention is proved. I often wonder whether the Minister for the Navy (Senator Gorton), who introduced this bill in the Senate, ever read the works of that great liberal thinker, John Stuart Mill. He wrote a splendid essay on liberty. His work has been read by many people in all countries of the world, because I have no doubt that his essays have been printed in all languages. Bearing in mind the words of John Stuart Mill, I cannot understand what motivated the originators of this bill.

Is this bill the aftermath of the Petrov inquiry? If there was a political dud in the history of this country, it was the Petrov inquiry. Is this bill introduced as a justification for spending thousands of pounds on the Petrov inquiry, which enabled the Government parties to win an election? That may be the Government’s excuse for introducing the bril, but it is certainly not justification.

I am sure that this bill will receive very serious consideration in the committee stage. It is a bill that lends itself to debate in the committee stage more so’ than m the second-reading stage. Earlier to-night we saw how some honorable senators exercised their right to vote as they saw fit. I hope that they will continue to exercise that freedom and that the 42 amendments to be moved by the Leader of the Opposition will receive the support of a majority of honorable senators.

Senator CAMERON:
Minister for Health · Victoria · LP

– I oppose the bill because it proposes to confer practically unlimited power on persons who deal with the law, particularly judges. My experience during two world wars has convinced me that it is very dangerous to confer unlimited power on representatives of the law, because in 90 per cent, of cases such power is abused.

During the First World War I took an active and prominent part in the campaign against conscription for overseas service. I told the working people that any proposal to restrict their individual liberty should be opposed. I told them that any action designed to reduce their standard of living should be opposed. For stating the case in such simple terms 1 was attacked by my opponents throughout Western Australia. Ultimately the issue had to be decided by referendum. According to the late Sir George Pearce, in his book, “ Carpenter to Cabinet “, the Senate forced the Government to submit the conscription issue to a referendum. Practically every referendum seeking unnecessary powers for the Commonwealth has been defeated in this country.

On one occasion during the Second World War, when I was a Minister of the Crown, a security officer interviewed certain executive officers employed at the Department of Aircraft Production depot at Fishermen’s Bend. He obtained information which he reported to his superior officer, Mr. W. B. Simpson, later Judge of the Supreme Court of the Australian Capital Territory. The security officer reported to Mr. Essington Lewis, who was then chairman of the Aircraft Production Committee, and Mr. McVey, now Sir Daniel McVey, who was secretary of the committee, that the information he had obtained was of such a nature that it would assist the enemy. Mr. Lewis and Mr. McVey were quite perturbed about the matter and it was suggested that the executive officers concerned should be suspended. I was asked what I thought about the matter. I said that before I expressed any opinion I wanted to confer with Mr. John Storey in order to ascertain exactly what had happened. I found that the information that had been supplied to the security officer had been published weeks previously. It was quite harmless. The security officer wanted these men suspended and possibly interned.

I had similar experiences in respect of other establishments where security officers had interviewed persons who worked on aircraft and who, it was suggested, had passed information which was likely to assist the enemy. These experiences convinced me that the men who were selected to represent the law at that time were quite unsuited to the task. I cannot see that this bill is likely to bring about any improvement.

The present Prime Minister (Mr. Menzies) commented on the dangers to liberty as far back as 1939. In that year, speaking in a debate which arose from the presentation of the annual report of the Department of External Affairs for 1938 by the late Sir Henry Gullett, Mr. Menzies stated in his reply to Mr. Frank Brennan, then member for Batman -

I believe that, just so long as the world has to remain under arms, wondering when a war is going to be forced upon it, just so long will representative institutions in democratic countries be in a stale of real danger, because inevitably, in those circumstances, we must intensify authority and tend to restrict liberty.

Not very long before, Mr. Menzies and Sir Winston Churchill, who was then Mr. Churchill, had made very eulogistic references to Hitler, the ruler of Germany, who had demanded extraordinarily wide powers.

As a result of my experience, and my reading and study through the years concerning the actions of the representatives of the law, I find myself in complete agreement with the late Clarence Darrow, who was in his day the most able lawyer in the United States of America. He was able to win cases in which other lawyers would not even accept briefs. He was extremely successful, and he was acknowledged by those engaged in the law and by most people in the United States as the ablest lawyer of his day in that country.

In his book, “ Grime - Its Cause and Treatment “, which was published in 1 922, Clarence Darrow expressed a significant opinion about judges when he stated -

Judges are neither infinitely bad or infinitely good. They come from the ranks of lawyers and for the most part from those who have been long in defending property rights . . Few of them have much knowledge of biology, of psychology, of sociology, or even of history. . . .

And I would add “ of anthropology “. Very few lawyers with whom I have come in contact have any knowledge of anthropology, however well qualified they may be in the law. Anthropology is the science of man. It is the most important of all sciences and the least understood.

Clarence Darrow excelled in his knowledge of this science, and his wide knowledge and his ability to state a case, even before a hostile judge, enabled him to win practically every case that he undertook to defend.

Ten years after writing “ Crime - Its Cause and Treatment”, in 1922, Clarence Darrow had something more to say about judges in his book, “The Story of My Life “, in which he wrote in these terms -

As a rule judges are stolid and unemotional and their knowledge is purely conventional . . . Most judges have neither the experience nor the imagination to comprehend life, and of course they are not scientists, and few of them know much about the causes that produce actions.

That is to say, men and women act in certain ways. Why do they act in those ways? Clarence Darrow answers that question in the same way as do many wellknown criminologists: Man, for all practical purposes, is a mechanism, and he is constantly responding to external, internal and conversational stimuli. The way in which he acts depends mainly on his environment. The manner in which he has been reared and educated inevitably plays its part. But very few representatives ot the law understand that. Most of them act on the assumption that man is possessed of a free will and is responsible for his actions. Anthropologists, neurologists and others who have studied mankind know, as the result of their study, that the situation is quite different and that, as I have said, man is mainly a creature of his environment. So we find men acting in ways which we approve or disapprove, as the case may be. It all depends on their reactions to the external, internal and conversational stimuli to which they are subjected.

In 1928, Dr. Max Schlapp and Edward H. Smith wrote “ The New Criminology “. It must have taken them quite a long time to write. In that book, they went exhaustively into the matter, and they stated exactly what was written subsequently by Darrow in 1932, when he pointed out that judges need to be better informed than they are in order to do justice to their fellow men. History shows that this is the case. There has recently been published a book entitled, “ The Law versus the Trade Unions “, which was written by D. N. Pritt and Richard Freeman. The writers discuss the word “ conspiracy “. At page 19, they state -

An interesting comment on the law of conspiracy, attributed to Jeremy Bentham, was quoted by the Home Secretary, Mr. H. A. Bruce, in the debate on the Trade Union Bill of 1871, to which further reference is made on p. 49: “The word conspiracy served Judges for an excuse for inflicting punishment without stint on all persons by whom any act was committed which did not accord with the Judges’ notion concerning the act in question.”

In other words, as the writers of this book say, the judges acted as a law unto themselves. There are two approaches, as always - the subjective and the objective. Many people present the picture in its word form as they would like it to be presented - either favorably or unfavorably. Judges act in the same way. A recent report of a case in Bombay is useful as an illustration of the manner in which these representatives of the law act. Under the heading “ Judges “, this passage appears -

Judges, like other people, are products of their period, their up-bringing and their class, and the outlook by which they are guided is inevitably that of their class.

The position was well described by a great modern judge, Mr. M. C. Chagla, Chief Justice of Bombay, in a judgment he gave in 1957 in a case of Prakash Cotton Mills (Private) Ltd. v. State of Bombay, reported in the Bombay Law Reporter, Vol. 59, p. 836. The case concerned the validity of an Act of the Legislature of Bombay State, empowering the government of the State to enforce an award fixing wages, which was based on an agreement of certain employers with the trade unions, against other employers in the industry who were not parties to the agreement. In holding the Act to be valid, the Chief Justice relied largely on provisions in the Constitution of India imposing on the State the duty to apply principles of social justice; he held that the requirement of applying these principles made it possible for the Legislature validly to pass an Act compelling employers to pay wages which they themselves had not agreed to pay. In the course of his judgment, he dealt with the problem of defining social justice, and stated, very truly, as we think: “How a Court or a judge approaches a particular problem is influenced and coloured by his outlook on life and society.”

That is an example of a judge criticizing other judges and pointing out exactly what takes place. As I have said, this legislation, if enacted, will give practically unlimited power to the judges to deal with persons who come before them as they think fit, according to their viewpoint on life. Like other people, most of the judges are more or less creatures of their fears and prejudices. As Senator Kennelly and other speakers have mentioned, this bill is opposed by practically all sections of the community, including the members of the Australian Journalists’ Association. I suppose I am one of the oldest members of that association in Victoria. This is what it had to say in the November issue of its journal -

page 2052

PROTEST BY A.J.A. TO P.M

“Spy” Bill attacked.

Quick action to try to make the Federal Government withdraw sections of its Crimes Bill was taken last month by Federal Executive.

Letters were written to the Prime Minister and all members of the Federal Parliament protesting against sections of the Bill which deal with espionage and official secrets.

Federal Executive said newspapermen could never accept happily any restriction on their activity in gathering news and publishing it.

The first protest against the Bill came to Federal Executive from the Canberra district where a close study of all the sections had been made.

The district sent a long report to Federal executive and asked for a quick association protest.

Federal executive was very impressed with the Canberra district survey and it directed the general secretary to send a letter of protest against the Bill to the Prime Minister and to send letters to each member of the Federal Parliament.

I do not need to read any more of the article to show the opinion of men who are trained as observers. They realize that if this bill is passed into law, they will be subjected, in carrying out their duties, to the same treatment as other people will receive. They will be expected to print exactly what the Government wants them to print and to suppress facts or news that should be published. In other words, they will be conscripted by the Government to further its policy by what they publish. The journalists will be denied freedom of action and the right to express themselves freely.

I believe that a serious economic position is developing, not only in Australia, but also in countries overseas. If the position develops in Australia to the same extent that it has developed in Cuba, in the Congo and in other parts of Africa, and even in Japan, Italy, Spain and Greece, the Government will need full power to be able to deal with the organized labour movement, which is likely to take an active part in the process. We are living in times when organized labour cannot be suppressed to the same extent as it was in England from 1850 to 1958. All through the piece, legislation, with the assistance of the judges, has been used to suppress organized labour, but it cannot be suppressed to-day in the same way as in the past. For all practical purposes, the workers themselves are taking the initiative. It is not a matter of their leaders taking the initiative. For instance, in the recent steel strike in America which lasted for nine weeks, the workers themselves took the initiative and stood solidly together. That occurred also recently in England in the strikes by the seamen, the busmen and the railway workers. Only last week, in New South Wales, 60,000 railwaymen acted on their own initiative. Nobody would hold Dr. Lloyd Ross responsible, as a Communist. The men acted on their own initiative. The tendency to-day is to by-pass both governments and officials who oppose strike action. The men act on their own initiative. That is what is happening in Cuba, in the Congo and in other places. So we are faced with a state of affairs entirely different from that which existed fifty years ago.

A good deal has been said about human nature. So-called learned judges use the term. It has been said that, human nature being what it is, we cannot expect anything different. Tt is not human nature. It is human behaviour - quite a different proposition. As T have said before, human behaviour depends upon the native environment of an individual. Tt depends upon the environment in which men and women have been born and raised. Where the environment has been unbalanced or vicious one expects people born and raised in that environment to behave anti-socially. But that is not taken into consideration by the so-called learned men - eminent counsel - who use phrases that are so often quoted. John Burns said, when he was attacked as far back as 1915, “Most people are either the prisoners of phrases or the slaves of shibboleths “. They just repeat what has been said; and judges are no exception to the rule. I have quoted that saying of John Burns before, but it bears repeating.

There is another matter to which I should like to refer. A Mrs. Dorothy Spalding, J.P., of 1b Carilla-street, Burwood, New South Wales, sent me a copy of a letter dated 3rd November which she had addressed to Mr. Calwell. This lady is a widow. I knew the family years ago. She asked me also to mention her case. Her letter states -

Dear Friend,

I know that you have your hands full, but would you please help me. I was brainwashed last night and this early a.m. till three. My health is suffering severely and I am seeking medical advice this afternoon.

In her letter she mentions a police officer, Detective McCorrie, of Ryde. She also wrote a letter to Brigadier Spry complaining about the matter.

Here is an elderly widow who is being harassed. As far as I know she is a respectable woman and she is alone, yet this kind of thing can happen to her even before this bill becomes law. When the bill is passed the sort of thing that this woman complains about will be intensified. What will happen then will be similar to what a government tried to do during the First World War, and what this present Government tried to do some years ago by means of the Communist Party Dissolution Act. The bill before us will give government authorities full power over the lives of citizens, particularly those representing organized labour or those who challenge the Government or point out where Government policy is detrimental to the interests of the people. If this measure becomes law free speech will be a figure of speech - provided the Government can give effect to the measure.

I warn the Government that if this bill is passed, and if it attempts to do what is being done in other countries, the reaction of the working people in this country will be similar to the reaction of the working people in other countries. The power of the working people is not absolute. It is a relative power. But one of those days, when the working people are better organized and are fully alive to what is happening, their reactions will be much more aggressive than in the past. That time is approaching, and is evidenced by the way that the workers came here from various places last week to protest against the measure, by the letters that we receive, and by the press criticism to which the Government has been subjected over the measure.

If this measure becomes law the waterside workers, the transport workers and other workers engaged in essential industries will be attacked. There is not the slightest doubt about that. And the people who will take the initiative in provoking the attack will not be so concerned about the rights and wrongs as they are concerned about themselves. The dominant thought in the minds of most people is self-interest and self-preservation, wholly and solely at the expense of their victims. That is exactly how it works out. In those matters the authorities want convictions. They want persons who differ from the Government to be branded as Communists.

My time has almost expired, and I have no wish to speak at length, but I want to warn the Government of what is likely to happen. I want to point out to it that action and reaction are equals as well as opposites, and that it will not be able to do as Sir Garfield Barwick would have it do. If I were a thoroughly qualified neurologist or physiological psychologist I would say that that gentleman’s pituitary gland - that is, the gland which governs behaviour - is either defective or unbalanced, and that is the reason for his aggressiveness. Most of us are affected to some degree in that way. To judge by the bill as it was first introduced in another place I would class him as a political sadist. Senator Wright would have us believe that Sir Garfield Barwick had the bill amended into the form in which it is now before us because he was swayed by the right. Nothing of the sort! The Attorney-General simply yielded to pressure. Had there been no criticism of the bill in its original form he would not have altered it. Now the Government is trying to explain the whole thing away.

Under the existing Crimes Act the Go* vernment has all the powers it wants and can use them, but it wishes to enlarge these powers for use against the people if it is given the opportunity to do so. So I consider it necessary, as one who has had a long experience in those matters, to give a warning of what is likely to happen.

Senator GORTON:
Minister for the Navy · Victoria · LP

– One thing that has been said from time to time during this debate by speakers on both sides with which I can agree is that this bill is, in its very essence, a committee bill. It is a bill on which there is little dissension among honorable senators - except for odd individuals - as to principles. We on this side believe - and the Opposition states that it believes, too - in the principle that this country should have laws sufficiently strict, sufficiently strong and sufficiently applicable to curb the activities of any people who, living in and owing allegiance to this country, act. to help the interests of some foreign power,, whether that power be a Communist power,, a fascist power or simply a power which) merely suborns those people for money.. That being so-

Debate interrupted.

page 2054

ADJOURNMENT

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.

Question resolved in the negative.

page 2054

CRIMES BILL 1960

Second Reading

Debate resumed.

Senator GORTON:
LP

– There being that general measure of agreement that this country needs laws to protect it against treason, to protect its Sovereign against treason, and to protect itself against treachery and sabotage and spying, clearly the best discussion of the measure can occur, not on the principle involved, but on the detailed provisions of the bill by which we seek to translate the principle into practice. I have no doubt that, in committee, the Opposition will oppose this attempt by the Government on the grounds that we seek to provide more power than is necessary to deal with traitors within our midst. Consequently, in going through clause after clause of this bill, examining each proposal not in the vague and general way in which, by and large, the last two or three speakers have been referring to them, but in detail, I believe we shall best bring home to the people of Australia that this bill gives only sufficient power, and in no instance more than sufficient power, to enable the proper punishment of those who, living here, forsake their allegiance. So, although, in one or two instances, I shall endeavour in a general way to answer what has been put in a general way from the other side of the chamber, I shall leave the detailed discussion for the committee stage.

Before I answer, in a general way, two or three points, I want to advert to the method and practice by which this bill has come before the Parliament and the people. It was introduced by the Attorney-General (Sir Garfield Barwick) in the House of Representatives on 8th September. As was the case with that other great, contentious measure, the Matrimonial Causes Act, after introduction and after its text had become public, it lay before the Parliament and before the people for more than sufficient time for all Australians interested to be aware of what it said and why it said it. There was time for the Opposition to examine with the greatest care every comma and semi-colon in the bill and for all those who desired to do so, with or without cause, to suggest amendments.

Senator Ormonde:

– Is that a new technique?

Senator GORTON:

– No. It was used in respect of the Matrimonial Causes Bill which was introduced by the same AttorneyGeneral. I suggest that on matters of this moment it is not a bad technique. It is certainly a much better technique than that to which we became accustomed under other governments when a bill was rushed through the Parliament immediately after its introduction with the statement that no amendment of any kind would be countenanced under any circumstances. As a result of the willingness of the AttorneyGeneral and of the Government to examine every amendment suggested by responsible sections of the public or members of the Parliament, the Attorney-General, although he believed they were not strictly necessary, has written into the bill explicit safeguards in order to meet the desires of the Opposition, despite the fact that he believed that the safeguards implicit in the law were in the original bill. If they were not there, then this is a great advance and this is the action of a great Attorney-General. If they were there, but have been made more explicit, then no harm has been done and the public mind and the mind of the Opposition have to that extent been set at rest.

The problem in all legislation of this kind is to provide, in a changing world, sufficient power to cope with crimes which, though old in kind, such as treason and treachery, can find newness of form, and yet to see that no more than sufficient power is given - that power is not given for the purpose of coping with treason and treachery which can be used for the suppression of free opinion or the suppression of an attempt to persuade the Government or to inculcate an idea. One of the objections which have been made by the Opposition to this bill is that it gives more power than is necessary to cope with treason and treachery. On this point, Sir, I would like first of all to say this: To-night we have heard the Deputy Leader of the Opposition (Senator Kennelly) and Senator Cameron speaking at some little length on this bill or, rather, on the Crimes Act. Of the things complained about by those and other senators, five-sixths are not things which are introduced by the bill before the Senate but things which have been part of Australian law for the last 46 years. When I hear statements that Australia will become a slave State, that the gravest injustice will be done as a result of this legislation, that the greatest opportunities for mispractice and malpractice on the part of governments will be opened up, I can only say that for the last 46 years, on the test of practice, this has not proved to be true. And I can add that if a government in this country ever sought to do this kind of thing, as was pointed out by the leader of the Democratic Labour Party, the safeguards against it are, first, the courts which administer the law - because the Parliament does not administer it - and secondly, the people who, every three years or less, can change the government should they so desire. Let us at least in this discussion not get led into arguments saying that there is something fascist, or overbearing, or Communist or totalitarian or un-British about laws which have been in force in this country for 46 years and which have been in force in the United Kingdom, the home of British justice, for far longer than that.

Let us concentrate on the new provisions which the bill seeks to insert in the act. The major new provisions introduce the new crimes of treason, treachery and sabotage. Those provisions have been criticized in a general way. It has been claimed that the definitions of sabotage, of some forms of treason and1 of some forms of treachery are too wide. What is not too wide, but is quite specific, is the provision that, should any person commit any of those crimes, not only the act which constituted the crime but also the intent with which he committed it must be proved before a judge and jury. In my submission, the language contained in that provision cannot be described as being vague. But I shall say more about that when we reach the committee stage.

There have been suggestions, Sir, to the effect that this bill imposes upon Australian citizens loyalty to some foreign country. It does nothing of the sort. It does not impose on any Australian citizen allegiance to, or the necessity to obey the laws of, any foreign country. What it does impose on an Australian citizen - it was previously imposed1 on citizens of the Queen’s dominions in like circumstances - is a duty to refrain from seeking to overthrow by force a country friendly to or allied with the Queen. That again, Sir, is no new conception; it imposes no extraneous loyalty on a citizen of Australia. So that citizens of Australia may know which countries, in war declared or undeclared, are allies of the Queen, provision is made for them to be told publicly by proclamation. And so that no Australian citizen may by mistake or through error assist an enemy of Australia’s allies, provision is made for the enemies of Australia’s allies to be proclaimed publicly. This is not to be done by the Executive but is to be left entirely in the hands of the Parliament, which is elected by the people of Australia. The Parliament, within 21 days of the proclamation, must agree that those countries are allies or enemies.

In a world in which Tibet can be invaded without a declaration of war, in which Chinese volunteers can cross the Korean border and fight the United Nations without a declaration of war, and in which bullets, bombs and shells can kill our servicemen and the servicemen of our allies without a declaration of war, surely it is necessary for this Parliament to be able to say who are our allies and our enemies in such circumstances, and to proclaim those facts to the citizens of Australia. So any one who thereafter helps our enemies or the enemies of our allies, or who obstructs our servicemen, will do it knowingly. The crimes of treason, treachery and sabotage will be extended by this bill, but they will be extended with safeguards, as will be shown at the committee stage, which in many respects, for the Australian citizen, will be better than those enjoyed under the British Official Secrets Act and those provided for in the existing Crimes Act.

There will be discussion of what has been called the evidentiary provision - the provision which states that not only must a man be proved to have committed an act of treachery but that he must be proved to have committed it with intent to assist an enemy. It is provided that, in seeking to prove the intent, that person’s character as proved - but only if relevant to the charge and always under the control of the judge trying the case - may be called upon. The accused’s conduct and his membership of a subversive organization, or anything of that kind, can be adduced as evidence of intent.

Senator Wright:

– That applies to sabotage but not to treachery, does it not?

Senator GORTON:

– That is the section to which it applies, but the rest of the argument is precisely as stated. There will be discussion of that at the committee stage. For the moment I shall content myself by saying this: If it were proved that an Australian man or women, during a period when our servicemen were engaged overseas or were travelling to be engaged overseas, or when a war declared or undeclared was in existence, was found seeking to put sand into the bearings of a destroyer, to block the muzzle of a gun so that it would explode upon being fired, or to do any such act of sabotage, then, to my mind, taking a purely common sense view, it would be apposite also to prove that the person who did that act was, for example, a current member of the Nazi Party, as in the case of the last war, or of the Communist Party should that act occur while we were fighting the Communists. To my mind, it would be merely common sense to allow those things to be brought in to prove intent. But these matters will all be discussed at length at the committee stage.

I believe, and the Government believes, that the powers contained in this bill are all necessary. If the inaction of the Labour Party can be taken as proof of its intention, for eight years of the 46 years during which the Crimes Act has been on the statute-book that party believed that the powers contained in the original act were necessary. I do not believe that there are suggested powers in the bill before the Senate which are unnecessary or that there are not adequate safeguards to prevent such powers being used to convict an innocent person. If this is so - and I hope that we will, at the committee stage, be able to show that it is so- -thenI for one will shed no tears if a guilty person is convicted under the legislation, because it is framed for the purpose of protecting the Australian public.

Question put -

That the words proposed to be left out (Senator McKenna’s amendment) be left out.

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

AYES: 25

NOES: 33

Majority . . . . 8

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Question put -

That the bill be now read a second time.

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

AYES: 33

NOES: 25

Majority . . 8

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

page 2058

SPECIAL ADJOURNMENT

Motion (by Senator Spooner) agreed to -

That the Senate, at its rising, adjourn til] to-morrow at 2. IS p.m.

Senate adjourned at 11.34 p.m.

Cite as: Australia, Senate, Debates, 5 December 1960, viewed 22 October 2017, <http://historichansard.net/senate/1960/19601205_senate_23_s18/>.

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Senate 5 December 1960

QUESTION

AUTOMOTIVE SPARE PARTS

Senator LAUGHT:SOUTH AUSTRALIA

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

QUESTION

DECIMAL CURRENCY

Senator McMANUS:VICTORIA

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

QUESTION

HOUSING FINANCE

Senator MARRIOTT:TASMANIA

Senator PALTRIDGE:LP

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Senator SHEEHAN:VICTORIA

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

QUESTION

COMMONWEALTH DEVELOPMENT BANK

Senator DRAKE-BROCKMAN:WESTERN AUSTRALIA

Senator PALTRIDGE:LP

QUESTION

CONSTITUTIONAL REVIEW COMMITTEE

Senator SANDFORD:VICTORIA

Senator SPOONER:LP

QUESTION

IMMIGRATION

Senator LILLICO:TASMANIA

Senator HENTY:LP

QUESTION

IRON ORE

Senator SCOTT:WESTERN AUSTRALIA

Senator SPOONER:LP

QUESTION

JAPANESE TRADE SHIP

Senator WARDLAW:TASMANIA

Senator SPOONER:LP

QUESTION

SALES TAX

Senator SHEEHAN:

Senator PALTRIDGE:LP

QUESTION

HOVERCRAFT

Senator BRANSON:WESTERN AUSTRALIA

Senator PALTRIDGE:LP

QUESTION

WATER SCHEME FOR WESTERN AUSTRALIA

Senator VINCENT:WESTERN AUSTRALIA

Senator PALTRIDGE:LP

QUESTION

TASMANIAN SHIPPING SERVICES

Senator O’BYRNE:TASMANIA

Senator PALTRIDGE:LP

QUESTION

MACKAY AIR DISASTER

Senator MCKELLAR:NEW SOUTH WALES

Senator PALTRIDGE:LP

QUESTION

LEGAL SERVICE BUREAU

Senator WRIGHT:TASMANIA

Senator GORTON:Minister for the Navy · VICTORIA · LP

ORDER OF BUSINESS

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

AUDIT BILL 1960

Second Reading

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

NATIONALITY AND CITIZENSHIP BILL 1960

Second Reading

Senator RIDLEY:South Australia

NATIONAL CAPITAL DEVELOPMENT COMMISSION BILL 1960

Second Reading

Senator ARMSTRONG:New South Wales

Senator ARMSTRONG:New South Wales

Senator O’BYRNE:Tasmania

Senator Wright:

Senator O’BYRNE:

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

Senator Wright:

Senator Sir WALTER COOPER:

Senator Armstrong:

Senate
5 December 1960

Senator LAUGHT:
SOUTH AUSTRALIA

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

Senator McMANUS:
VICTORIA

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

Senator MARRIOTT:
TASMANIA

Senator PALTRIDGE:
LP

Senator SHEEHAN:
VICTORIA

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

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

Senator PALTRIDGE:
LP

Senator SANDFORD:
VICTORIA

Senator SPOONER:
LP

Senator LILLICO:
TASMANIA

Senator HENTY:
LP

Senator SCOTT:
WESTERN AUSTRALIA

Senator SPOONER:
LP

Senator WARDLAW:
TASMANIA

Senator SPOONER:
LP

Senator PALTRIDGE:
LP

Senator BRANSON:
WESTERN AUSTRALIA

Senator PALTRIDGE:
LP

Senator VINCENT:
WESTERN AUSTRALIA

Senator PALTRIDGE:
LP

Senator O’BYRNE:
TASMANIA

Senator PALTRIDGE:
LP

Senator MCKELLAR:
NEW SOUTH WALES

Senator PALTRIDGE:
LP

Senator WRIGHT:
TASMANIA

Senator GORTON:
Minister for the Navy · VICTORIA · LP

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

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

Senator RIDLEY:
South Australia

Senator ARMSTRONG:
New South Wales

Senator ARMSTRONG:
New South Wales

Senator O’BYRNE:
Tasmania

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

Senator WRIGHT:
Tasmania

Senator ARMSTRONG:
New South Wales

Senator SHEEHAN:
Victoria

Senator O’BYRNE:
Tasmania

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

Senator HENTY:
TASMANIA · LP