Senate
24 October 1961

23rd Parliament · 3rd Session

  1. Senate
  2. 23rd Parliament
  3. 1961

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

page 1391

QUESTION

AUSTRALIAN AIRLINES

Senator MCKELLAR:
NEW SOUTH WALES

– My question is directed to the Minister for Civil Aviation. Was Mr. Victor Pringle, acting chairman of East-West Airlines Limited, sent for and requested to see Senator Paltridge in Canberra? Did Mr. Pringle come to Canberra? What did Senator Paltridge want to see him about? Was Mr. Pringle requested to ask his board seriously to consider accepting the take-over offer of Ansett- A.N.A.?

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

– I saw Mr. Victor Pringle in Canberra, but it is completely misleading to suggest that Mr. Pringle was sent for, in the sense that he was summoned to come to see me. Instead, Mr. Pringle came at his own request because at that time my department was preparing estimates of subsidies for the period under review. Just prior to then East-West Airlines Limited had made a bonus issue of shares. 1 had been in touch with East-West Airlines Limited in respect of that bonus issue, and subsequently Mr. Pringle got into touch with my department and asked whether he could come to Canberra to see mc. I was pleased to say, “ Yes “. He did come. He came at his own request accompanied by the then general manager of his company, and at the time of the interview 1 had with me my director-general and my assistant director-general of policy. I make that explanation to indicate that Mr. Pringle was in no way summoned to Canberra.

We discussed a number of things. At the outset, we discussed the matter to which I first referred. Amongst the other things that were discussed was the offer made by Ansett-A.N.A., some time before this meeting, which offer had then expired. Indeed, at this time the company have made itself take-over-proof by altering its articles of association to provide that no share transfer could occur without the specific sanction of the board of East-West Airlines Limited. Nonetheless, we spoke of this and Mr. Pringle explained to me at length the reasons for his company’s decision. I told him that this was entirely a matter for his own company and one on which I had no view at all.

It was interesting to notice, in view of certain statements that have been made recently, that Mr. Pringle’s approach to this problem was rather different from that of Mr. Shand - not opposed to it; I do not suggest that for one moment. Mr. Pringle seemed to be giving considerable thought to the magnitude of the take-over offer which had been made. He still seemed to be pondering whether the correct decision had been taken, or whether on balance the decision was as completely in favour of his shareholders as it could have been. Indeed, he left me with the impression that he welcomed the opportunity to try to discuss this matter with me.

He did say that his board at that point was contemplating conversations with Ansett-A.N.A., and he asked me whether I would arrange for a meeting between himself and the nominees of Ansett-A.N.A. I told him that I would much prefer not to do that because obviously they Noma talk about something of a commercial nature and that was not my business. Notwithstanding that, some few days after that Mr. Pringle sent me a letter marked “ Private “ and “ Personal “ which reads as follows: -

Firstly, I would like to convey to you our appreciation for the friendly and frank discussion we had in your office in Canberra on the occasion when Archie and I visited you. The purpose of my writing you this personal letter is to inform you that I am taking my directors for a short holiday to Brampton Island on Sunday, 21st August, 1960, where we will be remaining for a period of seven days. It has occurred to me that this could provide an ideal opportunity for a friendly talk with Mr. Ansett along the lines mentioned in Canberra. It is felt that such a meeting could be the only way in which we could ascertain whether or not there is any chance of this company working out some mutually acceptable agreement with the Ansett group. I do not know Mr. Ansett personally and I would, therefore, be most grateful if you would pass this information on to him at the appropriate time.

I replied to that letter from Mr. Pringle by ringing him and repeating what I told him personally, namely, that I did not propose to make any arrangements for these gentlemen to see the Ansett people; that if they wanted to do that sort of thing it was up to them to make the accessary arrangements.

There is a further letter of interest which came from Mr. Smith, then the general manager of East- West Airlines, on 31st August, I960.. 1 read it because I notice that it has been suggested that some resent-, ment was expressed towards me for having tried to bring some pressure to bear on this company. On 31st August, 1960, the then general manager of the company wrote to the Director-General as follows: -

We would like to express our appreciation of your recent effort in bringing together members of this company and your department with the Minister for Civil Aviation at Canberra. 1 think that answers the question whether Mr. Pringle was summoned to Canberra. A further part of the letter reads -

We have had preliminary talks with one of the major operators in an effort to determine whether or not there is common ground upon which a working agreement could be established, beneficial to both parties, and I will be in a position to discuss these talks with you also. In the meantime it may be assumed that there will be no change in this company’s present policy.

I have taken some time to answer this question, because the implication within it was that I summoned Mr. Pringle to Canberra to put certain pressures on him, and Ithought it appropriate to take the time of the Senate to answer the question in full so that it can be seen that- whatever happened between Mr. Pringle and myself and my officers and his officer was something which was not done at my bidding but at the instigation and at the specific request of Mr. Pringle himself.

page 1392

QUESTION

FISHING

Senator McMANUS:
VICTORIA

– I direct a question to the Minister for the Navy, in view of a very long letter which I have received from a constituent. Have any complaints been received that fishing grounds off the Australian coast have been disturbed by such actions as the dropping of depth charges during naval manoeuvres? Could the dropping of depth charges by the Australian Navy significantly disturb fishing grounds?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– The answer to the first part of the question is that as far as I am aware the Department of the Navy has received no complaints that fishing grounds have been disturbed by the dropping of depth charges. 1 should like to get the opinion of competent fishing experts, but

I would not believe that fishing grounds as such could be disturbed by the dropping of depth charges in the numbers in which the Royal Australian Navy drops them in practice.

page 1392

QUESTION

AUSTRALIAN AIRLINES

Senator REID:
NEW SOUTH WALES

– I direct a question to the Minister for Civil Aviation. In view of the recent references to the possibility of a monopoly being established in New South Wales air transport, can the Minister say whether an offer has been submitted to East-West Airlines Limited and, if so, by whom?

Senator PALTRIDGE:
LP

– This is a report which gained currency, particularly in Sydney, during the latter part of last week. It was referred to by no less a person than the honorable the Premier himself in the Legislative Assembly, when he sal. -

I have been told on reliable authority that further attempts are being made to swallow up this company

Other reports were to the effect that this company, East-West Airlines Limited, was being pummelled into accepting an offer by Ansett-A.N.A. I thought it my duty to find out precisely what was going on, so I wired Ansett in the following terms: -

There is a repost current in Sydney that a takeover offer has been submitted for the purchase of East-West Airlines st»p This take-over bid was referred to by the Hon. the Premier in the Legislative Assembly last week stop Will you please inform mc if you have made any offer to EastWest Airlines since your rejected offer of April 1960 stop If you have made no offer could you give me any information which may have come to your notice of the reported offer by the N.S.W. Premier.

Ansett wired me in the following terms: -

With reference to your telegram 1 would advise that we have made no offer to purchase EastWest Airlines since May 1960 slop This offer was rejected by the shareholders of East-West Airlines and their board took steps to prohibit the transfer of any shares without the approval of the directors stop I accepted the refusal of my offer as quite final and definite and at no stage since that lime have we made any further offers stop In March of this year when Mr. Shand reported to the New South Wales Premier that another take-over bid had been made I publicly stated that I was in no way connected wilh this offer stop Again in July of this year in a letter addressed to all members of Federal Parliament and subsequently in the press 1 reiterated that I did not intend to repeat any offer to purchase East-West Airlines stop This is the position as it stands to-day

Kop Our results over the past twelve months have clearly shown the extremely marginal nature of airline operations in New South Wales and with this experience behind us it is our plan to consolidate our existing activities in that State stop In reply to your query as to whether I can throw any light on any new offer referred to by Mr. Heffron I can only state I know nothing of it nor have I heard of any such offer nor do I know of any one in the industry who knows of any present offer that has been made to EastWest Airlines.

I would like to add that I spent the weekend in Sydney at a conference of air transport authorities. This matter, having received so much publicity in the press, was a constant subject for discussion. Nobody at that conference had heard anything at all about this offer. There has been talk of appointing a royal commission to inquire into the matter. Mr. Heffron has stated that he has it on the best of authority that an offer has bee., made. It might be interesting to ascertain from Mr. Heffron who made the offer, lt might be interesting to have Mr. Heffron say who made the offer. Indeed, I challenge Mr. Heffron to state that a take-over offer was made to East-West Airlines Limited. The plain fact, of course, is that we are getting close to election time and the Labour Party is desperately seeking an election issue. It is trying to make an election issue out of this matter. Mr. Heffron stands challenged to produce evidence that an offer was made. It is my bet that he will not accept the challenge.

page 1393

QUESTION

BASS STRAIT FERRY SERVICE

Senator O’BYRNE:
TASMANIA

– My question, which is directed to the Minister representing the Minister for Shipping and Transport, is on a subject different from that dealt with just now by the Minister and will be considered, I think, in a much calmer atmosphere. Indeed, I am sure that the Minister will be quite happy to supply information on this subject. In view of the outstanding economic success of the Australian National Line Bass Strait ferry service provided by the “ Princess of Tasmania “, and the widespread interest shown by tourists in availing themselves of the experience and joy of a visit to Tasmania, as evidenced by the heavy and increasing numbers of bookings on the “Princess of Tasmania” for 1961 and 1962, will the Minister say whether the

Australian Coastal Shipping Commission, which operates the Australian National Line, is considering providing a second vessel to duplicate the present popular service?

Senator PALTRIDGE:
LP

– I am not aware of any plans for a second vessel of the type referred to by the honorable senator. I will ask my colleague, Mr. Opperman, whether anything along those lines is being considered.

page 1393

QUESTION

TELEVISION

Senator MATTNER:
SOUTH AUSTRALIA

– I ask a question of the Minister representing the PostmasterGeneral. Will the Minister say whether the television stations to be established under phase 4 and which are designed to service the Spencer Gulf area of South Australia will provide improved reception for viewers in the Port Lincoln and lower Eyre Peninsula areas?

Senator WADE:
Minister for Air · VICTORIA · LP

– Although the actual site for the national station transmitter that will serve the Spencer Gulf area has not as yet been chosen, I am afraid that it will be too far away from the Port Lincoln and Eyre Peninsula areas to serve the needs of people in those areas. However, the PostmasterGeneral has emphasized that the door is not closed to the establishment of further stations. I can only reiterate what I said in the Senate on Thursday morning last: The Postmaster-General has made it abundantly clear that he is prepared to consider applications from areas where the density of population is sufficient to guarantee the commercial success of a television station. That being so, I suggest to Senator Mattner that the people of the area to which he has referred have the matter in their own hands. They may submit a case to the Postmaster-General for his consideration.

page 1393

QUESTION

UNEMPLOYMENT

Senator HENDRICKSON:
VICTORIA

– I preface my question, which is addressed to the Leader of the Government in the Senate, by stating that last week I asked him a question relating to unemployment which seemed to touch him on the raw. I now ask him: Has the Minister for Labour and National Service had time to analyse critically but fairly a statement made by a supporter not of the

Australian Labour Party but of the Government, whose sincerity and credentials cannot be doubted, to the effect that there are more than 170,000 unemployed in Australia, which is a tragedy? The author of that statement never intended to make political capital out of the unhappiness of others. Secondly, does not this confirm the crushing criticism which was published yesterday by the Reverend David Scott, Director of the Brotherhood of St. Laurence, to the effect that the unemployment situation for men was continuing to deteriorate and that this sad and serious situation called for an expert investigation? Thirdly, will the Minister examine this non.political spokesman’s proposal?

Senator Gorton:

– Who is this nonpolitical spokesman?

Senator HENDRICKSON:

– H; is the

Reverend David Scott, the Director of the Brotherhood of St. Laurence.

Senator Gorton:

– Who was the first man of whom you spoke?

Senator HENDRICKSON:

– I was referring to the “ Sydney Morning Herald “. The Minister knows who made the statement. I know this is a very sore point for the Government, but the situation is hurting the unemployed very much, too. Fourthly, has the Minister seen a report published a few days ago to the effect that in the small settlement of Mount Beauty in the northeast of Victoria 53 workers are to be dismissed forthwith and that at Christmas time another 30 are to be retrenched, which means that at least 80 of the 350 families in the area will be in distressed circumstances within the next few months? Does not this provide a gloomy Christmas outlook for these unfortunate people at a time when the credit squeeze is supposed to have solved all our financial problems?

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

– I do not remember being touched on the raw. although 1 admit that from time, to time that does happen. I can only repeat, as I have said on previous, occasions, that the statements of the Minister for Labour and National Service on this subject are accurate. They are backed by the computations of his officers. I can only sympathize with Senator Hendrickson in his patent endeavour-

Senator Hendrickson:

– - Sympathize with the unemployed, not with ‘rae.

Senator SPOONER:

– I am sympathizing with you in your display of synthetic sympathy and in your endeavour to make this a political issue.

page 1394

QUESTION

RESTRICTIVE TRADE PRACTICES

Senator HANNAN:
VICTORIA

– I address the following questions to the Minister representing the Minister for Labour and National Service: - Has his attention been directed to the recent statement in the Victorian press to the effect that wool-buying interests would be committing no wrong under the present law if they carried out a deliberate boycott of the forthcoming Portland wool sales with the intention of preventing Portland from becoming a wool-selling centre? Does he not agree that such a boycott would be in breach of the spirit, if not the letter, of the Australian Industries Preservation Act? Also, does not the Minister agree that this type of restrictive trade practice is inimical to the true welfare of a free enterprise economy? Is he able to say whether the Government’s forthcoming legislation against trusts, monopolies and restrictive trade practices will prevent scandals of this kind?

Senator GORTON:
LP

– T have not seen the latest reference in the Victorian press to which no doubt Senator Hannan refers, but I have seen other references to this master in the provincial and city press of Victoria. I have seen advertisements published hy the wool-brokers and wool-buyers which indicate that they intend to place a ban, if they can, on the holding of wool sales at Portland, although those wool sales would be a great contribution to decentralization of industry in Victoria and of great help to the wool-growers in the area. I have further noted that they propose to lake action, if they can, against members of the;r association who go to Portland to buy wool. In those circumstances, I would not bc prepared to say whether or not the association was doing something that was legally wrong, because the legal position is fairly complicated and would depend on an evaluation of the reason for their action; but I would say that it was in contradiction of the spirit of the act to which the honorable senator has referred. 1 would also say that it was quite definitely inimical to the proper development of the State of Victoria. I cannot answer the honorable senator’s question about future policy. I suggest that he take that matter up with the AttorneyGeneral.

page 1395

QUESTION

ATTORNEY-GENERAL’S DEPARTMENT

Senator COOKE:
WESTERN AUSTRALIA

– I address a question to the Minister representing the AttorneyGeneral. It is a repetition of a question that I asked him last week, and is as follows: - What progress, if any, has been made in the consolidation of Australian statutes? Will this work be finished within a reasonable time Is it proceeding to a schedule?

Senator GORTON:
LP

– Senator Cooke asked me that question on Thursday last. I have received a written reply from the Attorney-General, as follows: -

There is no consolidation of the Commonwealth statutes at present in hand. Publication of such a consolidation was completed about six years ago and publication of a consolidation of the Commonwealth statutory rules within the last year or so. A consolidation of the laws of the Australian Capital Territory .is now in course of preparation and should shortly be completed. I hope that it will be possible - to put a further consolidation of the statutes in hand at an early date. However, this cannot be done until additional staff has been recruited. The vacant positions for that staff are at present being advertised.

page 1395

QUESTION

EYRE HIGHWAY

Senator BRANSON:
WESTERN AUSTRALIA

– Has the attention of the Minister representing the Minister for Shipping and Transport been directed to press statements that certain oil companies intend to set up fuel points on the Eyre Highway during the period of the Empire Games which are to be held in Perth next year? Is the Minister aware that at present the greatest distance between fuel points is only about 140 miles? As the Commonwealth has an interest in this road by virtue of the fact that it provides £25,000 per annum as a maintenance grant, will the Minister see that the resident business people who, year in and year out, provide a service to motorists along the route are not penalized by this move to provide temporary fuelling points, but are allowed, to reap the reward they have justly earned?

Senator PALTRIDGE:
LP

– I doubt whether my colleague, the Minister for Shipping and Transport, would be in a position to be of assistance in this matter for the simple reason that the sale of motor spirit in Western Australia, South Australia, or any other State is not something which is regulated or controlled in any way by the Commonwealth Government. I shall bring the question to the notice of my colleague in case he knows something of the matter and considers that it should be further examined. In that event, he may feel disposed to discuss it wim the State authorities.

page 1395

QUESTION

CURRENCY

Senator TOOHEY:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Treasurer. As a lead in, 1 mention that it is the practice of some overseas governments to require banks to disinfect bank notes as a means of preventing the spread of germs, ls this practice observed in Australia? If not, will the Treasurer investigate the matter in the interests of public health?

Senator PALTRIDGE:
LP

– To my knowledge, this practice is not adopted in Australia. I believe that Australian bank notesare kept in a rather better and cleaner condition than are bank notes in many other countries. Australian bank notes are examined rather more frequently and are sorted more rigorously than are those used in other countries. As soon as Australian bank notes begin to show signs of wear or of damage, they are withdrawn from circulation.

page 1395

QUESTION

BEEF ROADS

Senator BUTTFIELD:
SOUTH AUSTRALIA

– Is the Minister for National Development aware that at present large numbers of cattle from central and northern Australia come to South Australia either for immediate slaughter or for fattening on coastal pastoral properties? Was this fact taken into consideration when the construction of beef roads in Queensland was being planned? If it was, will the Minister inform the Senate whether any precautions have been taken or have been planned to ensure that cattle will not be diverted, because of the provision of better roads, from already established markets in South Australia to markets that may arise in other parts of Australia, thus seriously prejudicing the economy of South Australia?

Senator SPOONER:
LP

– The purpose of the Commonwealt!. in providing assistance for the construction of beef roads is to ensure better facilities for the export of cattle. I do not think that the circumstance that Senator Buttfield has mentioned is likely to arise. I do not think it is contemplated that the provision of these roads will disturb the existing pattern of cattle transport. If Senator Buttfield says she believes that the new roads will operate to the disadvantage of South Australia, I will have the matter examined, but my recollection of the project is that, by and large, the roads will serve existing railheads in Queensland and that the movement of cattle from the production areas will be much the same as in the past.

page 1396

QUESTION

AUSTRALIAN AIRLINES

Senator McKENNA:
TASMANIA

– 1 direct a question to the Leader of the Government in the Senate. Has the Government considered the public statements- made by two of the directors of East-West Airlines Limited, which are in direct conflict with statements made by the Minister for Civil Aviation? Will the Government, in the public interest as well as in the interests of the parties involved, have the issue resolved by the holding of a proper public inquiry?

Senator SPOONER:
LP

– Senator McKenna has asked whether the Government has considered the holding of a public inquiry. My answer to that question is, “ No “. I add a rider, which is in the nature of a personal opinion. It is not for a Minister to pledge the Government, but a Minister may express a personal opinion. My personal opinion is that the Government is not likely to do so.

Senator Hendrickson:

– Not when it has D.L.P. support.

Senator McManus:

– You would like to have D.L.P. support.

Senator Hendrickson:

– I would not have a bar of it.

The PRESIDENT:

– Order!

Senator McManus:

– Your leader said that he would like to have it.

Senator Hendrickson:

– He has never said that he wants your support.

Senator McManus:

– You can have “ Com “ support.

Senator Hendrickson:

– We do not have that either.

The PRESIDENT:

– Older!

Senator SPOONER:

– I wish somebody would tell me, Mr. President, whether this is a private fight or whether anybody can join in. Let me repeat what I have said. The question came from the Leader of the Opposition, and I want to answer it fully and completely. The answer is, “ No, we have not considered holding an inquiry “. I express my personal opinion that the Government is npt likely to do so. I am certain (hat all members of the Cabinet and all supporters of the Government have complete confidence in the accuracy of the statements that Senator Paltridge has made. I made that statement in the Senate last week, and I have very great pleasure in repeating it. I will back Senator Paltridge 100 per cent, in his accurate presentation of this matter.

page 1396

QUESTION

QUARANTINE REGULATIONS

Senator MARRIOTT:
TASMANIA

– My question is directed to my colleague, the Minister for Customs and Excise. Through you, Mr. President, I should like to take the opportunity to congratulate him on the fifth anniversary of his elevation to Cabinet rank. My question- is-: Has the Minister read the comments in the Sydney press by the chairman of Air India in which he referred to his mental anguish at filling in a passenger’s baggage declaration on his recent visit to Australia? Can the Minister inform the Senate of the significance of the terms in the form mentoned by Mr. Tata?

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

– I did read the. comments of the chairman of Air India. I thought they were idle comments for a man in his position to make. It is easy enough to -be facetious about regulations in any country. No doubt many of us could be just as facetious about regulations in other countries. I shall discuss briefly the items on the Passenger’s Baggage Declaration to which Mr. Tata referred because I consider they are of great significance. They deal with quarantine regulations in this country and as such they are most important. One item is, “ Saddles, bridles, horse rugs or horse brushes “, and another “ Animals or animal products (including meats, salami, sausage, cheese, skins) “, and things of that type which can carry germs and diseases from overseas that we do not have at this stage within Australia.

Senator Hendrickson:

– He never mentioned any of those things.

Senator HENTY:

– I do not know whether it is foot or mouth disease the honorable senator has. I think it is mouth disease! These regulations were inserted by the Department of Health, and they are designed - as the Government would wish them to be designed, and will see that they remain so designed - to keep from this country many of the dreadful diseases that exist in humans, animals and plant life in other countries of the world - diseases from which we are free in Australia.

Mr. Tata referred very facetiously to germ cultures, microbes, viruses, vaccines and bacterial cultures. Those are things which professors, who come here to lecture, or who come out here for the purpose of showing their experiments, regularly bring with them in flasks, and the Department of Health must have full information about them when they are entering Australia. It is not a thing to worry any ordinary visitor who is not carrying germ cultures with him. I should have thought that a man in Mr. Tata’s position would have recognized that fact.

Senator Hendrickson:

– He never mentioned that.

Senator HENTY:

– I think I heard coming from the Mouth again an interjection to the effect that Mr. Tata never mentioned that matter. I am talking about the press report of his statement and what he said to me last night.

Senator Hendrickson:

– What was that?

Senator HENTY:

– He said to me last night that he mentioned it and that is why I thought it was a rather facetious comment. I should like the Senate to know that the Government will continue to see that this part of the Passenger’s Baggage Declaration is filled in and that the requirements are carried out to the full to ensure that none of the diseases which ravage other countries shall come into Australia if it is possible for our quarantine regulations to prevent them.

page 1397

QUESTION

PEARLING

Senator SCOTT:
WESTERN AUSTRALIA

– I preface my question to the Minister representing the Minister for Immigration by stating that on the no;ice-paper there is a question by Senator O’Flaherty relating to pearling operations carried on by Scott Brothers at Broome, Western Australia. The question asks the Minister about the terms under which the people engaged in the industry are employed, and whether, since the folding up of the industry, Scott Brothers have fulfilled the letter of the contract in having the employees repatriated. In view of the personal nature of the question, would the Minister be prepared to hurry up an answer, and have the question answered, if possible, before the Senate rises on Thursday next? I also invite the Minister to issue an invitation to Senator O’Flaherty, through the department, to come to Broome, if he so desires, and inspect Scott Brothers’ books. I have contacted my brother and we are prepared to send Senator O’Flaherty out on a lugger, if he so desires. We are also prepared to allow him to don a diving suit, if he so desires.

The PRESIDENT:

– Order! I remind the honorable senator that he is asking a question.

Senator SCOTT:

– We are prepared to make all facilities available to Senator O’Flaherty, as far as we possibly can, when he is in Broome. In view of the rather personal nature of the question I ask the Minister to do all he can to see that it is answered before the Senate rises on Thursday next.

Senator HENTY:
LP

– In deference to Senator Scott’s wish I shall ask the Minister for Immigration whether he can provide an answer to the question before the Senate rises. I quite understand why Senator Scott wishes to have this question answered quickly and I shall do my best to see that it is answered.

page 1397

QUESTION

TELEVISION

Senator RIDLEY:
SOUTH AUSTRALIA

– I desire to ask the Minister representing the PostmasterGeneral a question. By way of explanation. I mention thai I understood the Minister when answering another question to say that if the people of the lower Eyre Peninsula were not satisfied with the present position in regard to television cover in the country areas of South Australia, the remedy was in their own hands. He stated that the Postmaster-General had said that if the people could provide evidence of a sufficient density of population their case would be considered. I should like to know whether the people of lower Eyre Peninsula would have to provide evidence that population density was sufficient to sustain a commercial television station, or whether they should direct their evidence towards the provision of a national television station.

Senator WADE:
LP

– Senator Ridley has quoted almost verbatim my reply to Senator Mattner, and he asks me what type of evidence the people referred to would have to place before the PostmasterGeneral before their case was considered. I used the words “ density of population “. Perhaps I should have used the phrase, “ a population of sufficient density to guarantee the commercial success of the undertaking “. The people in the category referred to could then lodge their applications and they would be considered by the PostmasterGeneral for the allotment of a commercial station.

Senator Ridley:

– That is, the people who are interested in establishing a station?

Senator WADE:

– Yes.

page 1398

QUESTION

BANKING

Senator WRIGHT:
TASMANIA

– 1 ask the Minister representing the Treasurer whether or not the Commonwealth Trading Bank has commenced a practice of charging a fee for noting overdraft accommodation irrespective of whether or not the accommodation is used. If it has, I ask whether that has been considered by the Government as a matter of policy. If so, will the Minister say whether the practice has been approved by the Government?

Senator PALTRIDGE:
LP

– I am not aware that the Commonwealth Trading Bank has, in fact, adopted this practice. I shall make inquiries and let the honorable senator know the result before the Senate rises at the end of this week.

page 1398

QUESTION

DAIRYING

Senator HENDRICKSON:

– Has the

Minister representing the Minister for Primary Industry ‘ seen the special article written by the Melbourne “ Herald “ writer on agriculture, saying that Australia is being left behind badly in the world-wide drive for new dairy products markets, and that New Zealand is showing far more drive, originality and determination in developing new markets, particularly in Asia? Is it true that the Australian Dairy Produce Board has not the authority or the money to develop new markets? Is the chairman of the board correct when he says, “ We have our hands tied behind our backs “? Also is it correct to say that the position is chaotic and it is certain that Australia nas shut herself out of many promising Asian markets at a time when she is threatened with the total loss of her major British market?

Senator WADE:
LP

– The position of the Australian Dairy Produce Board is not chaotic. It is pursuing a very vigorous policy in its search for new markets. I think it can be said with certainty that the board will not vacate the United Kingdom market until a firm decision has been taken on the future activities of that market as it is affected by the European Common Market. I also believe that there is a good deal of loose thinking and talking about securing Asian markets. This Government is very chary of diverting any great volume of Australia’s primary products into Asian markets for the very good reason that those Asian countries will find great difficulty in paying for those products. We cannot adopt a barter system. What is even more important is that the time could come, if those markets diminished, when we would be left without a market and with chaos in this country.

page 1398

QUESTION

BROADCASTING

Senator HANNAN:

– I direct a question to the Minister representing the PostmasterGeneral. I refer to the statement made yesterday by Mr. R. G. Osborne, the chairman of the Australian Broadcasting Control Board, in the presence of the PostmasterGeneral, at the annual convention of the Australian Federation of Commercial Broadcasters. Mr. Osborne said that the Australian radio industry was presenting rapidly diminishing prospects for Australian artists, script writers and others. I refer also to my question to the PostmasterGeneral of 28th September last about the difficulties of this industry, and the Minister’s reply that broadcasting clearly was in a transition stage as a result of the introduction of television. In view of the fact that the net profits of commercial broadcasting stations, as disclosed in the report of the Australian Broadcasting Control Board for the year 1956-57, were £1,498,000, and for the year 1959-60 were £2,594,000, is it not evident that despite the introduction of television commercial broadcasting stations have enjoyed even greater financial buoyancy? In view of that, will the Postmaster-General state the time when the transition period for broadcasting stations will be completed? When can members of my union expect to earn a reasonable livelihood in the production and presentation of broadcasting programmes? Will the Postmaster-General produce for the Senate, at his earliest convenience, a table of the percentage of programme time occupied by Australian programmes on the commercial broadcasting stations, which will show a break-up of the various programmes and the percentage of programmes that give employment to Australian artists, in a similar manner to the break-up of television programmes shown in table IV. of the report of the Australian Broadcasting Control Board for 1961?

Senator WADE:
LP

– In view of the nature of the question and the fact that the Senate will be rising at the end of this week, I think it is appropriate for me to say to the honorable senator that I will ask the Postmaster-General to supply to him in writing the information that he desires.

page 1399

QUESTION

NEW DELHI TRADE FAIR

Senator ROBERTSON:
WESTERN AUSTRALIA

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

  1. Is a trade fair to be held in New Delhi from 11th to 15th December, 1961, when leading businessmen of 38 African and Asian countries will assemble for trade discussions?
  2. Will Australia be represented at this gathering, bearing in mind that it could be the means of opening up new markets for certain Australian commodities?
Senator SPOONER:
LP

– The Minister for Trade has now informed me as follows: -

  1. The Indian Industries Fair will be held in New Delhi from Miti November to 31st December, 1961. Australia will not be participating on this occasion. During the course of this fair a conference of the Afro-Asian Organization for Economic Co-operation will also take place in New Delhi and I assume it is this conference to which Senator Robertson refers. The organization consists of representatives of national chambers of commerce in thirty-eight Afro-As’an nations. Full membership is open only to countries that participated in the original conference at Bandung in 1955, at which the organization was established, and the- countries in Africa and Asia which have obtained independence since that conference. Associate membership, without the right to vote, is open to non-independent African and Asian countries. -
  2. It will be appreciated that Australia is not eligible to participate in this conference.

page 1399

QUESTION

IMMIGRATION

Senator DRURY:
SOUTH AUSTRALIA

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

Has there been a transfer of migrants from the Bonegilla Migrant Centre to hostels in South Australia? If so, how many were transferred and how many of those transferred were placed in employment?

Sena or GORTON.- The Minister for Labour and National Service has supplied the following information: -

It has been a normal process for migrants to be transferred from the Department of Immigration centre at Bonegilla to hostels in South Australia as well as other States. This practice has been going on ever since the post-war migration scheme commenced and occurs where the migrants have no accommodation of their own to go to. It may occur because employment has already been found for them by the Commonwealth Employment Service or because it will facilitate their placement in employment.

page 1399

QUESTION

TELEPHONE SERVICES

Senator POKE:
TASMANIA

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

  1. How many persons are waiting for telephone installations in the Launceston district?
  2. Is it a fact that the number of applications for installation of telephones in the Launceston district increased by 2i per cent, in the past month and by 10 per cent, during the past three months?
Senator WADE:
LP

– The Postmaster.General has supplied the following answers: -

  2. Yes. /

page 1400

QUESTION

POSTAL DEPARTMENT

Senator POKE:

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

  1. Is it a fact that seven telephone linemen have received dismissal notices in the Launceston district, thirteen are to be dismissed in the Burnie district, and 47 in all are to be dismissed in Tasmania?
  2. If so, why are these men to bc dismissed, particularly in view of the fact that Tasmania has the highest percentage of unemployed persons in the Commonwealth at the present time?
Senator WADE:
LP

– The PostmasterGeneral has supplied the following answers: -

The services of seven exempt linemen in the Launceston district were terminated as from 18th October. These men were engaged for specific periods of approximately three to six months to carry out certain works which have now been completed. There is no other suitable work available for them in the Post Office at present. It is, of course, the normal practice to engage men for special projects from time to time and to discontinue their employment when the work is completed. It is not contemplated that the need to terminate the services of any further linemen will arise in the immediate future and no such arrangements are being made in respect of the Burnie district or elsewhere in Tasmania.

page 1400

QUESTION

TELEPHONE SERVICES

Senator HENDRICKSON:

asked the Minister representing the PostmasterGeneral, upon notice -

  1. Has it been the practice in the past for work of the type necessary for the installation of the two new cross»bar telephone exchanges at Haymarket, Sydney, and East Kew, Victoria, to be carried out by highly trained technicians employed by the f Postmaster-General’s Department itself?
  2. Where will the contractors who successfully tendered for these works obtain the highly skilled technical staff necessary to carry o’ut the work in accordance with the expert requirements of the department?
  3. What were the amounts of the successful tenders and what were the estimated comparable costs for performance of the work by the department’s own staff?
Senator WADE:
LP

– The PostmasterGeneral has supplied the following answers: -

  1. It is the regular practice for exchange installation works to be carried out by departmental staff. Only in .special circumstances has automatic equipment been installed by contract. In all installations by my department a proportion of highly trained technicians undertakes the ‘sections of the work which require expert knowledge and skill and also supervises the work of the less skilled staff.
  2. The new crossbar type installation at East Kew, Victoria, is under the full-time direction of an overseas engineer from the manufacturing company supplying the equipment. The installing company is an Australian associate of the equipment supplier, a manufacturer of automatic switching equipment for the Post Office and one of the companies approved by the department for installing private automatic branch exchanges. I am not in a position to say what recruiting arrangements this company has made to meet its contractual obligations. The company which will install the automatic equipment at Haymarket, Sydney, is the Australian associate of the equipment supplier, the Swedish company which designed the crossbar switching system adopted by the department. It is assumed that it, too, will provide suitable staff for the work to be undertaken.
  3. It is not the practice of the Post Office to divulge lender prices. However, you are assured that before accepting the quotations for installation of the exchanges concerned, the Post Office examined critically the estimated comparable prices of installation by its own staff. The exchanges on completion must meet the rigid specifications of the department in respect to quality of workmanship and quality of performance.

page 1400

QUESTION

WATERFRONT EMPLOYMENT

Senator POKE:

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

How many man-hours were lost on the waterfront during September as a result of shortage of work?

Senator GORTON:
LP

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

It is not possible to provide an answer. The work available from time to time in any port is determined by the volume of cargo moving across the wharfs.

page 1400

QUESTION

SEARCH FOR OIL

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

– ;by leave - On 13th September, Senator O’Byrne asked me four questions relating to the Jehi and Barikewa wells in Papua. The questions and answers I supplied are given on page 782 of “ Hansard “ for 3rd October, 1961. In his questions, Senator O’Byrne referred to an interval between 5,700 and 8,700 feet but did not specify to which of the two wells he referred. My reply was prepared on the assumption that the reference was to the Barikewa No. 1 well but Senator O’Byrne has since explained that this question was directed to the Iehi well.

The implication in Senator O’Byrne’s questions and in the statements he has made subsequently is that there is some unworthy reason why the interval 5,700 to 8,700 in theIehi well was not tested. The answer to this allegation is contained in my prepared reply to Senator O’Byrne’s question No. 4. In this reply I detailed the testing that had been carried out on the Iehi welland concluded with the statement.

It can be staled, therefore, that in this particular well, drilled to a total depth of 10,042 feet, the formation tests produced no evidence of oil or condensate.

It appears that Senator O’Byrne’s uneasiness arises from a paper written by Dr. Gerrit Mulder, an economist employed by the Australian National University. Dr. Mulder has prepared a statement in which he attempts to analyse the results obtained from the Barikewa andIehi wells. My technical advisers inform me that Dr. Mulder’s conclusion that the interval in Iehi between 5,700 and 8,700 was one which should have been tested for wet gas or oil, is based mainly on two assumptions -

  1. that the two wells are on the same anticline;
  2. because the wells are only 12 miles apart and in the same area of deposition there should be no appreciable differences in the cretaceous sequences and their thicknesses.

Both these assumptions are wrong. The two wells are onseparate anticlines. Major changes in sequence and thickness can and do occur between localities much less than 12 miles apart. In addition, Dr. Mulder places undue emphasis on the presence of wet gas in the Barikewa well. It is true that wet gas was present in that well but the main flow, which was quite large, was of dry gas.

As I informed the Senate in my earlier reply to Senator O’Byrne, theIehi well was subsidized. This means that the drilling and testing programme was in accordance with the requirements of the Bureau of Mineral Resources so that not only are cores and cuttings available for examination but also the usual geophysical data which is used to decide a well-testing programme.

The interval between 5,700 feet and 8,700 feet in theIehi well consists of strata which during drilling gave no indication in cores and cuttings or in the gas log of the presence of hydrocarbons and which electrical logs taken by the reputable independent Schlumburger company show to have low porosity and to contain fresh to brackish water. This information shows that there was no justification for testing this interval.

I assume that Dr. Mulder has made his statements in good faith and that Senator O’ Byrne has accepted them in the same spirit.I thoughtit desirable, however, to make this reply because uninformed statements of this kind could well do harm to the search for oil in Australia.

page 1401

QUESTION

CUSTOMS

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

– by leave -I wish to make a statement concerning criticism of Australian Customs procedures which appeared in the press this morning in Sydney and Melbourne. The statements were made by the DirectorGeneral of the International Air Transport Association, Sir William Hildred. At the outset, I want to say that the Commonwealth Government always gives due consideration to criticism made by responsible bodies such as I.A.T.A. In this case, I must mention that the comments were made outside the conference. The criticism was levelled at the Customs Baggage Declaration and Australian statistical requirements.

The question of the Customs declaration is one which has been debated, discussed and considered many times in the past and I can assure honorable senators that it is not being retained simply because my department is reluctant to abandon older procedures. The question has been examined exhaustively by departmental experts and by myself. Australia retains the written baggage declaration because experience has shown that a few minutes spent by a passenger in the air filling in what is really a simple form saves a great deal of time when the passenger is on the ground and is being passed through the Customs. Inquiries show that aircraft passengers’ clearance times in Australia compare most favorably with those at other main international airports throughout the world. As a matter of fact, I find great satisfaction in the many letters of commendation of the courtesy and efficient manner in which passengers returning to Australia are cleared through Customs controls at Mascot. These letters compare Australia’s procedures more than favorably with procedures at international airports overseas.

Perhaps even more importantly, the written declaration is necessary to allow us to give passengers the very liberal tariff concessions available to all passengers entering Australia - probably the most liberal treatment of passengers anywhere in the world. In addition, the declaration enables unaccompanied baggage to be released to the passenger under the same conditions as if it had accompanied him on his arrival in Australia, that is, without further documentation. I might add that countries which have abolished declarations cannot give any concessions to unaccompanied baggage because they have no record of concessions which may have been grantedto the passenger upon his actual arrival.

Reference is made also to statistical forms which are considered essential by the Commonwealth Statistician to collate vital statistics. I think it is fair to say that airlines themselves use these statistics. I might add that if it were decided that the individual type of statistical information should be abolished it would be necessary for the airlines themselves to supply the same type of information but in a different form. In fact, this is what happens in some other countries. My department keeps its procedures under continuous critical examination and is constantly striving to use the simplest systems consistent with its obligations. Moreover, it takes an active part in the deliberations of the National and State Air Facilitation Committees, which comprise representatives of airlines and the departments concerned and which meet regularly to discuss the best means of solving problems associated with air traffic.

page 1402

COMMONWEALTH BANKS BILL 1961

Second Reading

Debate resumed from 19th October (vide page 1278), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator TOOHEY:
South Australia

– Although the Opposition does not oppose this bill, it is of such importance that I think I should detain the Senate for a little while in order to discuss it. Honorable senators are aware that the Commonwealth Development Bank was created in 1959 by merging together the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank. The funds of those two departments totalled about £15,000,000. To that sum a further £5,000,000 was added from the reserves of the central bank. That, then, was the total amount of funds available to the Development Bank when it was created in 1959.

It is important to consider the functions of the bank. It is designed primarily to provide finance for primary production or for the establishment or development of industrial undertakings, particularly small undertakings where, in the opinion of the officers of the bank, such provision is desirable and where the necessary finance would not be available through other means of orthodox banking. The Development Bank is unique inasmuch as it departs from the cardinal requirement of the orthodox banking system as we know it in this country. Security is not the dominant note in determining whether the bank will accommodate a customer. A considerable degree of criticism has been levelled at the Development Bank by the private banks for departing from the normal procedures of banking and by-passing some of the requirements which those private banks consider so important in the field of banking. It may be remembered that in 1959 the Opposition did not oppose the creation of the Development Bank. But we on this side of the chamber did question whether the £14,000,000 or £15,000,000, representing the funds of the old Mortgage Bank Department and the Industrial Finance Department, plus the extra £5,000,000 taken from the reserves of the central bank, were sufficient to meet the needs of the new Development Bank. The history of the bank’s operations since 1959 prove that the Opposition’s argumentshad some foundation. It is interesting to consider what has happened in the field of banking in recent months. A very significant statement appeared in the Melbourne “ Sun “ on 10th

October last. Under the heading “Drop in Personal Lending by Banks “ that statement reads -

Banks are playing a much smaller role today in financing personal borrowing than they did a decade ago.

Figures issued today by the Commonwealth Statistician, Mr. Carver, show that personal advances by the trading banks at the end of June comprised only 14 per cent, of the banks’ total advances.

A year earlier the figure was 16 per cent.

At the end of June last year the banks’ loans to home buyers and builders amounted to 9.3 per cent, of the total advances. This June they were 8.2 per cent.

The article also stales -

In spite of the encouragement given by the Federal Government to banks to lend money to rural industry, rural advances at the end of June stood at £225,300,000. which was £13,500,000 less than the figure for June last year.

That statement highlights the views of the Opposition. The bill that we are now discussing provides for an increase of £5.000.000 in the funds of the Commonwealth Development Bank. The Government is of the opinion that that increase of funds should meet requirements for the next twelve months. We of the Opposition do not accept that view. The article to which I have just referred - I think the views expressed in it are correct - shows that the banks are playing a much smaller role in personal advances than they did a decade ago. I am referring, of course, to the private trading banks. This means that the Development Bank must of necessity extend its activities if the gap is to be bridged. For this reason, and for other reasons, the Government should have trebled the amount tha’ is being provided to the Development Bank under this bill, thus enabling the bank to fulfil the very real and very necessary function of expanding rural and secondary industry. lt is interesting to see how the Developmen: Bank has functioned since its inception. One must remember that in accommodating its customers the bank does not pav regard to the ordinar.y processes of banking as we know them. The prospective borrower has not so much to convince the officers of the bank that he has sufficient security to merit a loan as to convince them that there is some possibility of hi-3 business succeeding. In the last twelve months the bank approved 2,060 loans. The total amount involved was £10,832,000. Although orthodox banking procedures have not been followed in regard to the giving of security, it seems that no bad debts have accrued. The bank made a handsome profit on its transactions. That indicates that not only is this form of finance sound but also that there is a growing need for it.

Senator Wright:

– You would not expect there to be many bad debts in the year in which the money was advanced, would you?

Senator TOOHEY:

– No, but there is no reference at all in the report to bad debts. As Senator Wright would know, the matter of early repayments is one of the cardinal considerations in the lending of money. A considerable volume of business has been transacted since the inauguration of the bank, particularly in the last twelve months. Although Senator Wright may have had a degree of justification for the interjection he made, I am sure he will agree with me when I say that in the last twelve months a considerable amount of money has been repaid on loans which were made eight, nine or ten months ago and that there is no reference in the bank’s report to any difficulties in relation to repayments. In the normal processes of banking the people who have been accommodated by the Commonwealth Development Bank most likely would not have been accommodated if they had gone to any of the private banks to secure loans for the purposes for which the Development Bank is prepared to advance money. That is an important matter to bear in mind.

If my memory serves me correctly, when the 1959 legislation was introduced the Opposition said that certain restrictions were being placed upon the Development Bank which would not enable it to enter spheres of activity which it might well have entered. I have in mind mainly the provision of loans for housing. Ther-2 is no need for me to remind honorable senators that loans can be made available for certain specified undertakings: but there is a considerable degree of limitation in regard to the fields into which t’ae bank may intrude. I have before me another press- article published during this month and which is headed “ Demand For Homes is Still Sluggish “. It reads-

Activity in the homebuilding industry since June had remained sluggish, the chairman of the Australian Gypsum Industries Ltd., Mr. Raymont Moore, told shareholders at the company’s annual meeting yesterday.

To assist in its revival home purchase finance on long term low deposit loans was essential.

The Commonwealth Development Bank could be a means of stimulating the homebuilding industry which, once started and public confidence restored, would continue under its own momentum.

Obviously Mr. Moore suggests that the Development Bank could release money for homes. It seems that some stimulus is needed in the home-building field.

I do not know whether honorable senators are aware that, although the Government has removed many of the credit restrictions that it imposed some time ago and which had an impact on the homebuilding industry, the industry is not yet being stimulated. To some degree confidence has been undermined. Probably it has been undermined more seriously than the Government foresaw when it adopted the restrictive credit measures that it applied in November, 1960. It seems that the effect of some of those restrictions is still with us and is likely to be with us for some considerable time. Other Opposition senators share with me the view that, if the activities of the Development Bank could be widened and its reserves increased, it could venture into some of these fields, release credit, and thus make a major contribution to the stability of the economy.

Senator Wright:

– Does the charter of the Development Bank include any provision for the financing of home-building?

Senator TOOHEY:

– No, it does not. I concede the point. But my argument is that it could be extended to include that activity. When the legislation was framed in 1959 certain limitations were imposed upon the activities of the bank and it was provided that, when it made loans available, it had to have regard to the needs of rural undertakings and industrial development. The legislation provided that the bank could carry out normal banking functions in that it could accept deposits. When the Treasurer (Mr. Harold Holt) introduced the relevant legislation in 1959 he said that the bank could accept deposits, but he added that in his opinion not much business would accrue in this field. I do not see why it should not. Only a small alteration of the act would be required to enable the Development Bank to make available loans for home-building.

Honorable senators do not need to be reminded that at one time there was a section of the Commonwealth Bank which satisfied a very real need - the section which dealt with hire-purchase finance. The Government saw fit to destroy that arm of the Commonwealth .Bank.

Senator Scott:

– Are you not a little bit out there?

Senator TOOHEY:

– No.

Senator Scott:

– Do you mean to say that the Commonwealth Bank has not an industrial finance department?

Senator TOOHEY:

– What I am saying is that the hire-purchase section of the Commonwealth Bank, as we knew it under the 1945 banking legislation, is no longer in existence. Here is a huge field of profitable investment for the Commonwealth Bank. Still more important is the fact that here we have a great opportunity to protect the interests of the people by making hirepurchase finance available at fair interest rates. I do not think any honorable senator would join issue with me when I say that at present interest rates on hire-purchase transactions are far too high. They are a crippling impost on people who to-day regard it as being normal practice for them to pay for goods while they use them. It is not for us to say that they should not do that. If they did not purchase goods in that way, they would have to wait for many years before they could find the cash to pay for them. Some may say that that is not good business. That may well be true, but it does not alter the fact that that is the way of life which the people of Australia have determined for themselves. There is nothing we can do about it. We must accept the fact that they have a democratic right to do such things. It is incumbent on those who have the opportunity to do so to give them the utmost degree of protection which can be given to them in the circumstances. / - “ ‘ ‘ “” ~ 1 notice t’.-.at certain sections of the press have seen fi’t to criticize the Commonwealth Banking Corporation for bringing out what they have described as a ‘most expensive looking report. I do not think it is any more expensive looking than the reports that are usually issued by government instrumentalities. It seems that the Commonwealth Bank is fair game for anybody who wants to attack it, regardless of whether or not there is validity in the attacks. The following significant statement appears in the report: -

Requests for financial assistance from the Bank during the year 1960-61 have been more than sustained; in fact, every month has seen a steady increase and, on present indications, this appears likely to continue. The evidence clearly confirms the real and growing need for the type of financial aid which this Bank was designed to provide. lt was found possible to approve a large proportion of the many and varied applications received during the year 1960-61, and finance approved by the Bank totalled £24,900,000.

That statement supports the contention of the Australian Labour Party that there is a great and growing need lor this kind of finance. There is no indication - at least no proof has been submitted to the Labour Party - that sufficient funds were available to the bank last year to meet valid requests which it may have received for financial assistance. There is no evidence in the report, unfortunately, to give us a pointer one way or the other, but having regard to the way in which the statement 1 have just read is framed, it is possible that heavy demands have been made and that all the demands were not met.

The second significant mailer that flows from the passage I have read is that it was found possible to approve a large proportion of the many and varied applications that were made during 1960-61. 1 think that the words that are. used in the report provide a strong indication- of the need’ for this type of finance. People have been able to satisfy the bank, and if the report can be taken as a guide, they are continuing to do so, that although they have not necessarily had sufficient security -to undertake the business ventures for which they were seeking financial assistance, their propositions were considered likely to succeed. For years we have seen people in the unfortunate position of having something to contribute to the economic growth of this country and to the expansion of either rural or secondary industry, but having their enterprise stifled because the normal banking processes did not provide the assistance they required. It is of importance that we should ask ourselves, not only whether the amount advanced by the bank last year was sufficient, but whether an additional f 10,000,000 might not have been necessary and perhaps an even greater amount this year.

I also refer to the following significantstatement i> the report: -

Full use of the Bank’s present resources is being made, and it is already clear that in the national interest the present resources will require to be augmented substantially.

That passage gives point to the argument 1 am trying to develop. The bank acknowledges the fact that the total resources were needed and that a very substantial increase is merited. We join issue with the Government on the question whether the amount of £5,000,000, by which it is proposed to increase the capital of the bank, will meet the demands to be made in the ensuing twelve months. I think it would have been far better if the Government had decided to be a little more generous and, instead of increasing the reserves of the bank by £5,000,000, had said, “We will make it £10,000,000”. If the bank is obliged to turn away legitimate business which conforms to the provisions of the act under which the bank was constituted, it will mean that the Government has failed not only the bank but the Australian people, because the enterprises with which the bank concerns itself contribute to national expansion, in either rural or secondary industry. The section of the report that I have read underlines the fact that £5,000,000 is a meagre amount in the circumstances. 1 also read the following passage from the report: -

Confirming a trend which became evident in the early months of the Bank’s existence, applications for loan finance received during the year 1960-61 were predominantly rural in character, although there was also a steady flow of applications for finance from industrial concerns.

On looking through the classifications of the loans which were approved we find that there were 508 in the £1,000 and £2,000 category. In the £2,000 to £5.000 category there were 961. Those figures ave worthy of study. Loans of between £5,000 and £10,000 numbered 429, while those between £50,000 and £100,000 numbered only three. There were only two of more than £100,000. It seems, therefore, that in the main, the people who benefit from such loans are those engaged in small businesses. I think that all honorable senators will agree that it is to those people that we should be giving the most encouragement.

I stated at the beginning of my remarks that the Opposition was not opposing the bill. We believe, as we stated in 1959, when the bank was inaugurated, that the amount constituting its reserves is insufficient. We say also that the amount of £5,000,000, by which it is proposed to increase the bank’s reserves is insufficient. We argue that that contention is borne ou; by the bank’s report and we say that the Government should consider increasing the amount or at least reviewing the position in six months’ time if the rate of applications for loans makes it obvious to the officers of the bank and to the government that the reserves are in fact insufficient. I trust that the thoughts I have expressed will be noted by the Minister for Civil Aviation (Senator Paltridge). I also hope that as the debate continues we shall see some of the supporters of the Government, particularly members of the Australian Country Party who say that they are concerned about the rural interests of this country, adding their voices to the argument I have put forward. I hope they will use their endeavours to persuade the Government to adopt my suggestion, which the report of the bank seems to indicate is necessary.

Senator McManus:

– Hear, hear! They ought to get up and say something about it.

Senator TOOHEY:

– Yes. They ought to support the contention of the Opposition that the amount of £5,000,000 is insufficient.

Senator Mckellar:

– You want to direct the Country Party, dp you?

Senator TOOHEY:

– Npt at all. If you represent rural interests YOU ought to get to your feet and demonstrate that you are dinkum about it.

Senator Drake-Brockman:

– We do not become dinkum only at election time.

Senator TOOHEY:

– Surely the request I have made is not unusual or unreasonable. I cannot understand why Senator DrakeBrockman should bridle at it.

Senator McManus:

– They should tell us what Sir Arthur Fadden would have done.

Senator TOOHEY:

– That is a valid point. I hope that Senator DrakeBrockman, who is so good at interjecting, will intervene in the debate and tell us whether he believes that the proposed expansion of the reserves of the Commonwealth Development Bank by £5,000,000 is sufficient. The report of the bank supports our contention that it is insufficient. I leave the matter there. I say again that we on this side do not oppose the measure but we would like to see the sum of £5,000,000 doubled or trebled.

Senator McKELLAR:
New South Wales

– I have very much pleasure in supporting the bill. The fact that £5,000,000 is to be made available as a further contribution to the resources of the Commonwealth Development Bank shows that the bank so far has been a success. Let me say here and now that I support wholeheartedly and with great enthusiasm Senator Toohey’s statement that a contribution of £5,000,000 is not enough, but let me point out to him that the Treasurer (Mr. Harold Holt) intimated that £5,000,000 should not be taken as being the total sum that would be made available to the bank. I think the inference is clear. The possibility is that £5,000,000 will not be enough and, in that case, extra money will be made available. Let me say also at this stage that my observations and investigations during the past twelve months - I have been interested particularly in rural finance - have shown that the bank so far has had enough funds to enable it to meet the demands made on it.

It appears that there is still a great deal of uncertainty among rural people about the functions of the Development Bank. Therefore, it might be as well for me to state those functions now. Let me say first that the bank could not begin to function until the Government had regained control of the Senate, although the plans for it had been prepared for some time. A considerable time elapsed between the completion of the plans and the actual establishment of the bank. Here 1 bring in the name of Sir Arthur Fadden, as I was invited to do a few minutes ago by Senator Toohey. It was made clear by Sir Arthur Fadden that the main function of the bank would be to assist applicants for loans who had the necessary technical knowledge and qualifications but lacked capital. When the bank began to operate, applicants for loans were required to have the necessary technical qualifications but, rightly or wrongly, emphasis has been placed since then on the developmental aspect of any project in respect of which a loan is sought. That is all right so far as it goes. However, as I have stated in this chamber on several occasions, many applicants for loans had the necessary technical qualifications but did not have sufficient capital and were unable to obtain money from any of the trading banks or through any other normal avenue of assistance. Unless the propositions in respect of which they were applying for loans from the Developmental Bank had developmental aspects, they could not get assistance from that bank either.

During the last few months it has become considerably easier, I am very glad to say, for primary producers to obtain loans from the trading banks, so the state of affairs to which I have referred may not continue to exist. I hope that it will not. However, during the last nine or twelve months many people of the type to which I have referred have been unable to obtain finance to acquire properties which they wished to acquire. I remind honorable senators that during my speech on the Budget I said that I believed it would become easier, not harder, to get rural finance, and I am very pleased to be able to say that my prophecy on that occasion has been proved to be correct.

I refer honorable senators now to some statements that were made by an economist of the Reserve Bank, Mr. G. T. Hair, in an article published in “ The Land “, a New South Wales publication, on Thursday, 28th September, of this year. He said, among other things, that farmers could place too much emphasis on security and not enough on the need for maximum profits when considering going into debt. He added that perhaps many farmers remembered the depression years and the lessons which they learned then and, therefore, were paying greater regard to security than to future development. He said also that, in his opinion, it would pay to use credit if returns could be increased by more than the cost of the added capital. I think that is a common-sense view. Mr. Hair emphasized that proper planning was necessary to ensure that capital was used in the best possible way.

Discussing other sources of finance, he referred to the fact that some life insurance companies made loans at 7 per cent, interest. The life insurance companies were a source of finance for the acquisition of rural properties up to the period of the Second World War, but since that time their lendings for that purpose have decreased in volume and, in many cases, have decreased very sharply. That avenue of finance is still available to rural people to some degree, but I think the decrease in lendings had occurred because the insurance companies have been putting most of their money into what I shall call bricks and mortar in the cities. They have been looking for quicker returns, higher rates of interest and, possibly, shorter term loans, although I am not quite sure of that. It may not be correct to say that that is so in every instance. However, there is no question that rural borrowers have been the chief sufferers from that re-direction of investment by the insurance companies.

Mr. Hair said also that, as we know, the function of the Development Bank is to provide finance when it considers that a loan would be desirable and when money is not otherwise available on suitable or reasonable terms. I think some one said in the other place recently that an applicant must have a letter from his bank manager saying that a loan has been refused before the Development Bank will consider granting him a loan. That is not correct. Mr. Hair said in his article that the primary factor influencing the bank in granting a loan was the prospect of the farmer’s business being successful. Referring further to rural loans, he said that a borrower from the Development Bank should normally be engaged directly in primary production as a principal activity, or should intend to be so engaged. He stated also that no limit was set to the size of individual loans, although those below £25,000 were preferred. He went on to say that the efficiency, the managerial capacity and (he integrity of. the applicants, as well as the prospects of success for their undertakings, were important considerations. He explained th:.t loans were made primarily for development, including irrigation projects, and that repayment of the loans would be made over periods suited to each case. That is important. No time lir-‘it is set for the repayment of a loan and each case is treated on its merits. That, I think, is very satisfactory. A maximum rate of 6 per cent, was set for new business. Mr. Hair also mentioned that operators were expected to provide me maximum security available, but that loans could range up to 85 per cent, of the market value of the property.

It is quite obvious that the facilities offered by the Development Bank could not possibly be matched by any other banking institution, and there is no doubt that the Development Bank has played a very important part during the period that it has been in existence. When the bank commenced operations one of the difficul.ties confronting it was that it did not have sufficient trained mcn, particularly in the country, to allow it to pursue its activities to the extent it was designed to do. It is obvious to all of us that a bank cannot acquire in a hurry trained men to perform activities of this sort. If such men are not available the right type of personnel have to be trained, and that takes time. Trained men may be acquired from other sources, but it is not easy to acquire them in that way.

I have made mention during the last few weeks of a trip I took through the north of Australia. I found during that trip that in the Alice Springs area loans have been arranged with the Development Bank for the purpose of providing extra water and fencing. Loans have been arranged by the bank not only in that area but all oyer Australia. That information is given in the bank’s report and was commented on by Senator Toohey. The great need of primary producers is for long-term loans. Until some nine or ten years ago the normal thing was for a primary producer to an ange lor an overdraft, the repayment of which was to be made over a very long period.

Senator Toohey:

– That is not the banks’ present policy.

Senator MCKELLAR:

– I agree that it is not the banks’- present policy, but the Development Bank’s present policy is to make loans over a period of years to suit the particular individual, with repayments from time to time. The latter provision is necessary otherwise the bank would run out of funds. We had the experience in New South Wales of the Rural Bank lending on long terms, but it simply did not have sufficient funds to continue on that basis, and as a result had to reduce the number of applications that it could grant, lt is essential that loans to primary producers shall not be made on a short-term basis. Although the proposition and the prospects of the applicant might be excellent when the loan is arranged, a drought could set in, or other vicissitudes of nature with which primary producers have to contend could beset them, and could upset the returns that had been expected. That is one of the reasons why it is essential, wherever possible, that loans should be of long-term duration, with a proviso that those loans may be repaid at shorter intervals wherever it is possible. That is the aim of the Development Bank.

I do not want my remarks about the Development Bank to be misconstrued as being in any sense derogatory of the task that the trading banks have performed, particularly during the last five or ten years. The trading banks have played a very large part in the development of Australia. There is no question about that. However, circumstances are different now. The trading banks are not able to make long-term loans as they used to do. The tendency now is for them to arrange to have repayments made at an earlier date.

We know, too, that there has been a lot of criticism of the Development Bank by the trading banks. They have said that the Development Bank is entering into competition with them. In this connexion I notice that there is a passage in the report which states that thu Development Bank shall be subject to controls similar to those applicable to any other bank. At least the banks are on an equal footing in that respect. Some of the trading banks also say in effect, “ Release some of our frozen deposits and we will give extra credit to primary producers and those people who can bring increased export earnings to Australia “. That is an aspect to be considered if we cannot find sufficient funds for the Development Bank, but up to the present sufficient funds have been available from the Development Bank.

One aspect of the trading banks’ activities is causing quite a deal of concern at the moment. Where clients of the trading banks, particularly wool-growers, have had advances from their wool brokers, there is a tendency for the trading banks to exert pressure on their clients in an endeavour to get them to decrease the amounts owing to the banks and to increase the loans from the wool brokers. That situation is causing a lot of concern, and it will have to be resolved one way or the other. Some brokers are becoming embarrassed because they in turn have to obtain accommodation from one of two sources. They have either to obtain accommodation from the trading banks or they have to go on to the market to obtain extra money. The present practice is not doing the primary producer any good and 1 hope that we will soon see a cessation of this trend.

A great deal of stress has been laid recently on the increase in costs. Part of the increased costs of primary producers has resulted from the purchase of machinery and material. If the primary producer cannot purchase his machinery, stock and plant through the ordinary trading bank advances - and in many cases he cannot - then he has to find other sources of finance, and one of these sources is hire purchase. Trading banks to-day have their own hire-purchase companies, and there is also a hire-purchase section of ‘the Development Bank. One criticism levelled against the trading banks by the primary producers is that, although the trading banks will not give the primary producers the credit they require, they will say to them, “ See our hire-purchase section and we will fix you up there “. The primary producers go to the hire-purchase section, and, of course, if they can get the money they are after for the purchase of plant, they will have to pay a very much higher interest rate, thus increasing costs. While that is all right from a bank’s point of view, it is not much good from the primary producer’s point of view. Unfortunately for the primary producer., that tendency has been very marked during the past four or five years. If the tendency continues it will force costs higher and higher.

I mentioned a little while ago the difficulty of obtaining experienced personnel to carry out the functions of the Development Bank. That applies also to trading banks. When what has been described as the credit squeeze was in its most severe stage some few months ago, I heard of a bank manager in the western portion of New South Wales who told one of his sheep-breeding clients that he might be well advised to purchase cheaper rams in view of the financial stringency. That was very poor advice to be given by a person in a responsible position. Such advice is not in the interests of the client, the bank, Australia, or anybody else. The necessity for having trained men becomes readily apparent.

I should like to refer to the advances that have been made by the Development Bank. The report discloses that an amount of £3,903,000 has been made available for pasture improvement, clearing, fencing and water conservation. That amount was made available to people engaged in tha sheep, dairying, cattle, wheat, other grain crops, and other primary industries. An amount of £2,148,000 was made available for the erection of buildings and the acquisition of plant and equipment over the same range of industries. For the purchase of livestock and the provision of working capital an amount of £1,475,000 was made available. For the purchase of land and the repayment of debts an amount of £541,000 was made available. Each of those amounts was spread over the industries that I mentioned a moment ago.

During the year 11,586 customers were helped in the purchase of equipment, such as tractors and plant and machinery. A total of £14,100,000 was made available for transactions of that type. In the previous year there were 12,764 transactions with a value of £14,400,000. It is interesting to note that the average amount of finance required in those transactions rose slightly. The average in the year 1960-61 was £1,221, compared with £1,126 in the previous year.

Another interesting aspect is that in the early stages of the Commonwealth Development Bank 50 per cent, of the applications made to it were rejected. 1 suppose that was to be expected because immediately the bank was constituted applications flowed in from all those people who could not get finance from other sources. So, it was to be expected that many of the applications that were made would not be of such a nature that the bank could accept them. Fortunately for everybody concerned, the rejection rate is very much lower at present.

Senator Vincent:

– Have you any figures on the present rejection rate?

Senator McKELLAR:

– I have some figures, but unfortunately I have not got them with me. To emphasize the needs and the financial position of many primary producers in New South Wales, recently I obtained some figures which showed the activities of the Rural Reconstruction Board in that State. That is a body which deals with people whose financial position has become somewhat desperate. If they cannot get carry-on finance from anywhere else, they make an application to the Rural Reconstruction Board. I believe that on the whole it does a very good job. The figures that I saw - I think they were for the last financial year - showed that there were 477 successful applications to the board and £2,500,000 had been advanced; seventeen further applications had been granted, involving £197,000; and a further 27 applications were awaiting decision. I do not know what amount was involved in them. Those figures are for New South Wales only. They show that many of our primary producers are in a very unhappy financial position.

It is very gratifying to know that the Development Bank exists, although it will not be able to help the people to whom I have just referred because their financial position is such that they cannot get financial accommodation from any body other than the Rural Reconstruction Board. The’ Development Bank exists to provide assist ance for people who cannot obtain assistance elsewhere on reasonable terms. The bank sets out to promote development. I am very glad indeed to see that the Government is now giving this extra £5,000,000 of capital to the bank. I have no doubt at all that if that amount is shown to be insufficient it will be increased. If it is increased, it will be of benefit not only to those of us who are connected with the primary industries but also to Australia. I have very much pleasure in supporting the bill.

Senator WRIGHT:
Tasmania

– Rising, as 1 do, to address the Senate with three Labour senators present, I would think that in the eyes of the Opposition the subject of banking is becoming an insignificant matter. The time was, when we came into power and for the five years immediately before that time, when the present Opposition made it appear that banking was the means of controlling the country. After a considerable time the Menzies Government brought in a comprehensive bill on the subject of banking. One of the cardinal and novel features of that bill was the constitution of the Commonwealth Development Bank. The whole of the Menzies Governments 1957 banking legislation was designed to give sanity and equity to the banking system so that the two arms of it - that promoted by the Government in the Commonwealth banking arrangements and the section governed by the trading banks - would come into balance. In many quarters there was some anxiety that the new Development Bank would grow so greatly as to make its interests quite disproportionate to the legitimate interests of other sections of the banking industry.

This bill to supplement the capital of the Development Bank comes before us now. This is an opportune occasion for us to take stock and exchange ideas between one honorable senator and another. I hope that 1 will have the benefit of the Minister’s reply on certain specific matters that I will mention. The extent to which this bank may grow is indicated by the growth of the Commonwealth Trading Bank. Trie latest report of that bank shows that in 1950 its assets were valued at £119,000,000 and in 1961 they are valued at £360,000,000; the number of accounts in 1950 was 300,000 and in 1961 it is 719,000. That leads me to the significant figure; namely, that of the share of all banking deposits which the Commonwealth Trading Bank has. In 1950 that figure was 7.8 per cent., and in 1961 it is 16.5 per cent. The trend of encroachment of the Commonwealth Trading Bank on the banking field - whether for good or ill, and whether justified or not - is obvious. Year by year the Commonwealth Trading Bank is occupying a position of ever-increasing strength in the banking structure of this country.

The Commonwealth Development Bank, as an arm of this congeries of banking institutions of the Commonwealth, is capable of much more rapid ‘growth. Notwithstanding the implications of that, I was one who supported the establishment of the Development Bank. I still feel a great enthusiasm for it, emphasizing as I do the need for the provision of adequate finance on appropriate terms if we are to develop a strong commercial and agricultural structure and, particularly, the importance to the farming community of the period of loan and the interest rate.

The period of loan is most important in Australia, having regard to the vicissitudes under which agriculture has to maintain its productivity. Bush fire, flood and drought cause vagaries of varying kinds with which the individual cannot cope unless he is assured that in the period of adversity caused by an act of God of that sort the bank will not be on his back for repayment of -loan. He must have an assurance that the loan money is secure. Of course, the bank or lending institution will require compliance with the terms of the arrangement that will maintain ..confidence. The emphasis of the ordinary trading banks to-day is increasingly towards the supply of , short-term finance. I should say that they look at nothing over two years. That is wholly ruinous to the promotion of agricultural prosperity and is not fit for the farming community.

But I want to be satisfied that in this respect the Development Bank is meeting the needs of the farming community. I am not satisfied that in the majority of cases the period.-of loan is sufficient to allow the establishment of a project by any ordinary, progressive individual. The next thing is the interest rate. It mystifies me that we place the public credit of this coun-. try under an obligation to finance city and suburban housing to the extent of, 1 think, £80,000,000 of loan moneys a year. I say nothing of war service homes, which are in a special category. I speak simply of civilian loans for urban and suburban hous-ing. We make the money available to the States - I am subject to correction but I assert this until contradicted - at 4£ per’ cent. Yet we are told solemnly that the Development Bank lends money to promote farming at 6 per cent. We are a community that is supposed to have become cognizant of the fast that our export industries need, if not assistance, at least equity. I pointed out last week that these city communities are subsidized in regard to all of their public transport services, through the system of State finance. Here in Canberra there is a subsidy of £62,000. Ignoring that, I find that city communities get for building purposes about £80,000 a year at 4i per cent. The farms are expected to be developed and maintained, on present export prices, with money borrowed with advantage to develop expansion at 6 per cent.

I have expressed myself in this way in the hope that the position can be justified or that it will be speedily taken into con- sideration and corrected. When trading arrangements, internationally and otherwise, prevent export subsidies being granted to re-adjust the imbalance between export prices and production costs, here we have an obvious means, by a reduction of this interest to not more than 4 per cent., of reducing the cost factor in the export industries.

Those statements come within the context of remarks that I wish to make as to the place that the Development Bank takes in the general banking structure. I have referred to the interest rate. The savings banks at present pay interest to their depositors at the rate of 3£ per cent. Under the regulations governing investment of savings bank funds, 70 per cent, of those funds must go into government or semi-government securities. It is my opinion that that restriction is imposed not so much to safeguard the security of1 savings banks as repositories for the people’s deposits, or to preserve the obvious liquidity which they must maintain in excess of a trading bank, as to provide a cheap supply of government and semi-government loans.

Senator Vincent:

– - Could it not be for both purposes?

Senator WRIGHT:

– That is implied. I do not deny that the first two factors are considered, but I say that the reason for the restriction is not so much to ensure the security of the banks, or the maintenance of the special liquidity of their funds, as to provide a reservoir of cheap money for government loans. That position, I think, needs revision, especially considering the lack of money power of the ordinary depositor in a savings bank. I think that we ought to revise that position so that we increase the amount of savings by increasing the attraction for the savings bank depositor. That would bring into the banking system funds which would enable the expansion of the Development Bank much more readily.

The other matter upon which I wish to comment arises out of figures published by the Commonwealth Statistician a little while ago. These show that in June, 1960, advances for agriculture totalled £236,700,000, in June, 1961, they amounted to £225,200,000. Total advances by banks for finance purposes were £64,900,000 in June, 1960, and £72,200,000 in June, 1961. Total advances for commerce purposes amounted to £211,500,000 in June, 1960, and £217,300,000 in June, 1961. lt is apparent, therefore, that advances for agricultural purposes have decreased but advances for purposes of finance and’ commerce have increased. I think the Senate is entitled to an explanation of how that state of affairs is reconciled with the Government’s policy statements with regard to bank advances to those sections of industry over that period.

Judging from the annual report of the Commonwealth Banking Corporation, the Development Bank deserves the unqualified confidence of the Senate. 1 was heartened to find that of the total of about £10,800,000 of loans approved last year, about £8,000.000_ wa6 advanced for rural development and about £2,700,000 for industrial development. I congratulate the bank on the fullness of detail as to amount of loans, number of loans and classification of loans set out on page 31 of the corporation’s report. So as not to bore the Senate with a recital of the figures in relation to loans approved by the bank, with the concurrence of honorable senators I incorporate in “ Hansard “ the following table: -

I approve of the ratio of loans for rural purposes and industrial purposes. I am also gratified to see that the great majority of loans were for amounts of less than £10,000. They, were loans made to small developers, who are the very sinews of this country’s strength.

Senator Toohey said that there was nothing in respect of th* bank’s operations to indicate that any of its loans had been written off. Having offered my compliment as to the way the report sets out details of loans approved, I now ask the Senate to turn to page 35 of the report and there see the conglomerate, meaningless, amorphous statement of the expenses and earnings of the bank. The profit and loss account contains one figure on the side of earnings - £2,277,163. But part of the general description placed alongside that sum includes the words “ amounts written off assets and losses on realization of assets . . .”. Forsooth, of course the bank would not stoop to vouchsafe to us, to whom it is reporting, how much of its losses represents bad investment! That is a very important factor for us to know. It is a disgrace to the bank that its profit and loss account should be an amorphous statement - an amalgam of figures that mean nothing unless dissected. I simply refer to that statement of profit and loss to show that the pudding does contain a few currants - there may be many currants - of written-off assets and losses on realization of assets. But how much we do not know. I hope that next year we will know. 1 hope that the Minister will consider my comments and will see that these public finance agencies handling Commonwealth moneys are not subject to stricture by this Parliament because we are not given the information that is relevant for our consideration. I support the bill.

Senator DRAKE-BROCKMAN:
Western Australia

– I support the bill. I am very pleased to see this amount of money being added to the funds of the Commonwealth Development Bank. Since its inception the bank and its officers have done a very good job. As I “move around the country I meet many farmers who tell me that the bank has assisted them financially and enabled them to get on with fencing, the establishment of watering points, clearing and pasture development. Not long ago I had the opportunity of speaking to some bulldozing contractors who told me that a large percentage of their work now comes from people who have received assistance from the bank. However, as Senator McKellar has said, when the bank began operations, almost 50 per cent, of applications for assistance were turned down. Many persons whose applications were rejected have written to me and have stated their case. They firmly believe that they were eligible for assistance. I have studied their cases and I find that many of them sought assistance for work that was other than developmental work. Consequently they did not co within the scope of the bank’s policy. But, on the other hand, a number of those applicants had every right, in my opinion, to expect assistance from the bank.

Senator Toohey:

– Has the bank rejected those applications?

Senator DRAKE-BROCKMAN:

– Yes.

By and large the applications fall into two categories. Before dealing with them let us see how Western Australia is affected by the operations of the bank. As honorable senators know, Western Australia is a very vast area. It comprises approximately one-third of the continent. It is essentially a primary producing State. Large tracts of land in Western Australia still remain to be developed. A great many young people in the State are seeking financial assistance in order to take up blocks of land and develop farms. Since the last war Western Australia has increased its production of wheat to the stage where it is now producing almost one-third of Australia’s crop. The wheat acreage of Western Australia has increased by 30 per cent. For a long time the acreages of the other States fluctuated and only now are beginning to exceed those of the pre-war period. Western Australia produces 10 per cent, of” the Australian wool clip. Although Australia’s production of wool has risen by approximately 47 per cent., Western Aus-V tralia has increased her production by 72 per cent. The production of beef in that State has increased by 30 per cent, since 1949.

Senator Dittmer:

– What is the total production?

Senator DRAKE-BROCKMAN:

– I have not the relevant figure here. I said earlier that Western, Australia is essentially a primary-producing State. From time to time the Western Australian Government has said that in recent times Western Australia is the only State where the value of exports has exceeded that of imports. In 1959-60, Western Australia had a total export income, of £115,500,000, of which g’rain accounted for £31,700,030 and wool £37,900,000. Of that total income, primary industry earned a total of more than £80,000,000. It is essential, therefore, that the Commonwealth Development Bank should continue to play its part in the development of Western . Australia.

The situation in which Western Australia is now placed has been reached purely and simply as a result of the hard work and the will of young men and women who have gone into the outback, who have lived in very primitive conditions, and who have carved out farms for themselves in the forests. I can recall that not very many years ago Goomalling, which is not very far from where I live, was considered to be on the outer extremity of the wheat belt of Western Australia. People were told that if they went further out they would not be able to grow wheat; but to-day we find that Goomalling is almost on the inner extremity of the wheat belt. I repeat that it is only because of the toil and the will of people who have gone into the outback to develop farms that Western Australia is in the position in which she is placed to-day.

Young men and women of to-day still have that will. They are willing to take up virgin blocks of land and develop them. I know many young men and women who have done so. The women have had to live in little huts in primitive conditions. These young folk have sunk all their capital into the undertaking, have developed portion of the land and have bought their plant only to find that th:v have reached the stage where they must either get some help or walk off the place. A number of such people are included in the applicants I mentioned earlier. In such cases the bank says, “ We do not think this will be a successful venture “. I do not think the bank is taking a big enough risk. Senator Wright referred to the rates of interest that are being charged by the Development Bank. When it was first stated that the interest rate would be 6 per cent, and the need for such a high interest rate was questioned, we were told that it was so high because this was a unique method of banking. We were told, in other words, that it was risk banking. I do not think the bank is taking any risk at all. 1 believe it should do something to help young men and women who are willing to go on to the land and develop farms. Otherwise, we will find that these people who have a rural background and a knowledge of farming will drift to the cities. In fact, in Western Australia, with its huge unpopulated areas, more than half the population lives in and around

Perth. That is a rather grim outlook for a State like Western Australia.

I should like to have seen this increase of the bank’s capital raised to £10,000,000 or even £15,000,000. I should also like to have seen the scope of the bank made more elastic to enable it to help young men and women who take up land but who find they cannot get over the hump. I shall not delay the Senate any longer. I have very much pleasure in supporting the bill.

Senator SCOTT:
Western Australia

– 1 rise to support the measure. I have only a couple of matters that I wish to discuss. The first relates to the interest rate of 6 per cent, and the other concerns the extension of loans to the mining industry. Recently I was in Esperance where I met representatives of the Farmers Union of Western Australia. Those men were adamant in their opinion that the rate of interest on Commonwealth Development Bank loans should be not 6 per cent, but 44 or 5 per cent., and that amortization of the loan and the payment of interest should not take effect for the first few years. A person who is developing a property, particularly in the south of Western Australia, does not get an adequate return for a considerable number of years. It is for that reason that ike Western Australian Government has made finance available on special terms to needy persons in the Esperance area. The State Government has made available loans of up to £4,000 or £5,000 at an interest rate of, 1 think, 41 per cent., amortization not to begin for at least five years, interest not to be payable for three or four years, and the period of the loan to be 25 or 30 years. That is the only way in which it is possible to obtain large-scale development of these outback areas. It is not reasonable to expect a person to pay interest and sinking fund charges in respect of a property from which he does not get a return himself for at least three years.

Secondly, I suggest that the Development Bank should make loans available to the mining industry. In America, if a prospector discovers a payable lode, he immediately notifies the mining authorities. An inspection of the area is made by a qualified officer to see whether development is possible, and to inquire into the economics of the proposition. In approved cases the government advances up to 90 per cent. of the cost of establishing and developing the mine. If the Development Bank were to make such assistance available, it would be able to play a part in the development of the Australian mining industry. Such loans would pay very large dividends in the form of export income.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator WRIGHT:
Tasmania

.- I rise quietly but firmly to utter a protest because of the fact that there has been no ministerial reply to the second-reading debate.I move -

That progress be reported.

I do so in order to give the Minister an opportunity to reply at the committee stage to the points that were made onthis side of the chamber and, also to some small extent, on the other side, during the secondreading debate. The matters that I raised were brought forward, not to waste my time, but purposely, with the object of hearing some responsible comment on them.

Senator Kennelly:

– I join Senator Wright in protesting at this procedure. Honorable senators are entitled to a reply. I recognize that it is necessary for people to leave the chamber, not because they want to go but because they have other important matters to attend to, but several important questions were raised during the debate-

The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! There can be no debate of the motion. The question is: “ That the committee report progress “. Those in favour say, “ Aye “ and to the contrary, “ No “. I think the “ Noes “ have it.

Question resolved in the negative.

The CHAIRMAN:

– The question now is: “ That the bill stand as printed “.

Senator KENNELLY:
Victoria

– Since there was no debate of the motion moved by Senator Wright, surely the committee will not allow the matter to rest there. I believe there should be a reply to the debate, even if it means that a Minister will have to speak for seven or eight minutes after dinner. I regret that we have to take these steps.

Senator Gorton:

– You do not have to.

Senator KENNELLY:

– The Minister says now that we do not have to do so. All I say is that he was pretty slow - certainly not as fast as he usually is - in rising to his feet. If he desires to rise and answer the various questions that have been asked by honorable senators, I shall gladly give him the opportunity to do so.

Senator GORTON:
Minister for the Navy · Victoria · LP

– I took the view that, as we had gone into committee, honorable senators who wished to ask questions about the various clauses of the bill would do so and that, with assistance of the departmental officers, I would endeavour to reply to them. I did not propose to traverse the whole field of the second-reading debate, but to endeavour, during the committee stage, to reply to points which were raised by honorable senators.

Senator WRIGHT:
Tasmania

.- I wish to raise two matters which I should like the Minister to consider. First, I ask: What is the source of the £5,000,000 that is to be contributed to the capital of the bank? Am I correct in understanding that it comes from the Reserve Bank? If so, from what account in the Reserve Bank is the money made available? Secondly, what reasons actuated the decision of the bank to lend money at an interest rate of, I think, 6 per cent.?

Senator GORTON:
Minister for the Navy · Victoria · LP

– An amount of £5,000,000 is being appropriated from Consolidated Revenue, and it is appropriated in this bill. The reason that the interest rate is higher than the normal rate of interest is, as stated by Senator Drake-Brockman earlier, that it was desired that the bank should be able to finance developments on properties which normal banking practice might regard as risky developments. Therefore, it was thought that it would quite possibly run into losses, and the interest rate was adjusted accordingly.

Senator SCOTT:
Western Australia

– Can the Minister say whether losses have been incurred by the bank on developmental loans? What are the maximum terms of such loans and may the period of amortization be extended beyond twelve months if the interest is not collected in the first year of the loan?

Senator GORTON:
Minister for the Navy · Victoria · LP

– There is no defined maximum term of the loans. That matter is left to the bank management, in an entirely flexible way. Information as to losses on particular advances is not available. As Senator Wright pointed out during his speech earlier to-day, a lump Sum is shown by the bank and detailed information is not available for me to give to the honorable senator. However, I had intended to bring to the notice of the responsible Minister Senator Wright’s comments on the balance-sheet to see whether it was possible to obtain more definite information.

Senator LAUGHT:
South Australia

– Clause 2 provides that -

This Act shall come into operation on the day on which it receives the Royal Assent.

Can the Minister say with any certainty when the bill is likely to be submitted, because the day of commencement of its operation is of some importance?

Senator GORTON:
Minister for the Navy · Victoria · LP

– All I can say is that when the bill has been passed by the Parliament it will be the intention to submit it as soon as possible so that it will probably go before the next meeting of the Executive Council. I cannot give any more precise indication than that.

Senator WRIGHT:
Tasmania

.- I want to deal with the question of the Interest rate a little more fully. It is not acceptable in my judgment that the appropriate rate should be 6 per cent, on the consideration of the risk inherent in the advances. True it is that the bank is directed to make advances for industrial and rural development having regard mainly to the prospects of the propositions rather than to the security. But is it not a fact that the policy of the bank is to lend not more than 85 per cent, of the value of the asset security in any particular project? If that is so, and having regard to the current rate of interest which the trading banks, both Commonwealth and private, charge to business organizations, it seems to me that the risk factor does not justify such a high rate of interest as 6 per cent. Can the Minister say whether this matter has been considered recently? In view of the export position, and in light of the fact that we approved incentives last year in the way of a rebate of pay-roll tax and exemption from income tax in order to encourage export industries, could consideration be given to revising the rate of interest? It is imperative that money at cheap interest rates should be available for the development of our industries, particularly the agricultural industries. I think that in the market place as well as in this Parliament the overwhelming majority of opinion would be that the fixation at 6 per cent, of the rate of interest to be charged by this bank is a millstone as it were, round the neck of the bank. It is something that is defeating the purpose for which the bank was established. If the Minister can give it, I should like to hear more justification of that interest rate.

Senator GORTON:
Minister for the Navy · Victoria · LP

– 4 .suppose that any interest rate which is fixed at any time -is something which can be the subject of argument. There is no doubt that the rate of 6 per cent, which was determined when this bank was established - the rate has not been raised since then, if I remember - was determined in the light of the fact that the bank would be expected to finance developmental -projects which normal conservative banking institutions would regard as being rather too risky for them to finance. That was one of the major considerations that influenced the determination of this rate of interest. I suppose that those who fixed the rate had in view also the minor consideration that some of the funds used by the bank would be borrowed funds, on which the bank itself would have to pay interest, but that applies also to the trading banks.

It is not laid down anywhere that the bank may not lend more than 85 per cent, of the value of any land or of any asset which is pledged as a collateral, but I should think it would be a fairly good deal for an applicant if the bank did lend that much. The question of interest rates generally is under discussion from time to time. 1 cannot say precisely when the question was under consideration last, but I can say that it ite considered at fairly regular intervals.

Senator SCOTT:
Western Australia

– Iri the speech that I made during the second-reading debate I referred to mining and asked a question which has not yet been answered. Is it a fact that when the legislation for the establishment of the Commonwealth Banking Corporation was under consideration it was stated that the Commonwealth Development Bank would make loans for primary production and for secondary production when money was not available through the usual channels? Did the Government state, in other words, that if the risk involved was too great for a normal banking institution, the Development Bank would step in?

I said in the debate on that legislation that one of the sources of income for Australia was the mining industry. I saw Mr. Warren McDonald, the Chairman of the Commonwealth Banking Corporation, subsequent to that debate - it was about twelve months ago - and he told me then that, to his knowledge, no loans had been made by the Development Bank to the mining industry. He said that the bank would consider applications for loans from people interested in mining, provided the projects submitted were satisfactory and that the security for the loans was adequate. He mentioned a figure. He said that if a company was prepared to invest £100,000 in a mining venture, then, in his opinion, the Development Bank should advance £100,000 also. I ask the Minister: Has the Development Bank made any finance available to the mining industry in the past twelve months?

Senator Gorton:

– No information is available about whether the bank has made finance available to the mining industry in the past twelve months, but the bank may make such advances.

Senator SCOTT:

– Thank you.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Sitting suspended from 5.51 to 8 p.m.

page 1417

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1)61

Second Reading

Debate resumed from 1 9th October (vide page 1325), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator RIDLEY (South Australia) [S.0J. - I suggest that as the bill before us and the Sales Tax Bills (Nos. U to 9a) are cognate measures, the second-reading debate on this bill could conveniently cover the second-reading debate on the other bills.

The PRESIDENT:

– I f that course is acceptable to honorable senators it will be adopted.

Senator RIDLEY:

– The purpose of this bill is to exempt certain goods for use in the provision of railway and omnibus transport services for the public and certain classes of motor vehicles and trailers for use in the transport of live-stock in the more remote areas of Australia, and also to provide for a reduction from 8i per cent, to 21 per cent, in sales tax on a range of enumerated articles- under the general heading of household furniture. Measured against the incidence of- sales tax as a whole the concessions cannot be regarded as anything other than minor. The estimated loss in revenue as a result of the concessions contained in the bill is £i 1,200,000 in a Budget which is designed to collect about £150,000,000 in sales tax. The concessions represent a small saving to a very small proportion of the people in Australia. The Opposition does not oppose the bill. It has learned from bitter experience that in the matter of obtaining reductions of sales tax from this Government it is a question of being thankful for small mercies.

As I have already said only a very small percentage of the Australian people - I was about to say taxpayers, but people who are not taxpayers in the generally accepted sense do have to pay sales tax - will derive any benefit from the concessions contained in these bills. Although the Opposition does not oppose the bills, at the same time it does not desire it to be thought that because of its non-opposition to these measures it supports in any way the policy of the Government on sales tax as a whole. The Minister for Civil Aviation (Senator Paltridge), in the first sentence of his second-reading speech, when introducing the first measure, said -

This bill, in conjunction with the sales tax bills to be brought forward later, is designed to give effect to the Government’s budget proposals for sales tax relief.

Any persons not conversant with just how limited the Budget proposals were in respect of sales tax relief could be excused for thinking - were they to take that sentence out “of its context - that the Government proposed to give some relief from the overall burden of sales tax. In using the words “ proposals for sales tax relief “ the Minister indicated - probably not intentionally - that the people of Australia regard -sales tax, of all the methods in which revenue is raised, as the most iniquitous. It is not equitable in its application. It falls just as heavily on the people who cannot afford to pay it as on the people to whom it means little or nothing at all.

Senator Wright:

– The Tasmanian Government imposes a tax of 2 per cent, on all credit sales.

Senator RIDLEY:

– If I do not mention ohe matter now, I suppose somebody else will mention it later. Sales tax is one of the most vicious forms of taxation, and when it comes to finding the culprit responsible for its introduction, it could possibly be said that it originated with the Labour Party during the depression years. However, whether it originated with the Labour Party or with a party of the same political colom as the present Government, no government that has introduced any sales tax measure, either increasing or decreasing sales tax, has been prepared to claim that it was doing so for the purpose Of increasing or reducing revenue from taxation. Since the Scullin Government imposed sales tax at the rate of 2i per cent, every government which has introduced amending legislation has claimed that it has done so for the purpose of imposing an economic restraint. On occasions it has been stated that the tax is being increased with the intention of dampening down some industry. I am sure we all have in mind the classic occasion when it was stated that the idea of increasing sales tax was to bring about disemployment in a certain industry. The proposal we are discussing now is for the purpose of bringing about the reverse situation.

The first amendment seeks to exempt certain goods for use in the provision of railway and omnibus transport services for the public, and certain classes of motor vehicles and trailers for use in the transport of live-stock in the more remote areas of Australia. In respect of the proposed reduction from 8i per cent, to 2± per cent, in sales tax on household furniture., the stated intention is that the reduction is being made because a slump exists in those industries.

During the regime of the present Government there have been more increases than decreases in sales tax. Whatever can be said about the sins of Labour governments in respect of sales tax, it is a fact that the present Government has increased sales tax out of all proportion during the years it has been in office. For instance we need consider only the sales tax on motor vehicles. I think the rate was 8i per cent, when the Government came into power. The tax went up to as high as 40 per cent, for a very brief period and to-day it is down to 30 per cent. Generally speaking, the policy of the present Government has been to increase the incidence of sales tax, and each time it has done so it has stated that the purpose was to dampen down the particular industry that was being attacked. In the few instances where sales tax has been reduced, the stated intention of the Government has been to try to give a little impetus to an industry that is suffering a setback. He would be a game politician who would be prepared to go before the people who elect him and say that sales tax is a fair means of raising revenue. Frankly, I do not think that any government, whatever its political colour, would claim that it .introduced sales tax as a means of raising revenue. T suggest that once this tax is introduced it becomes part of a vicious circle and it would be a game political party that would be prepared, to say, “ Over night we will abolish sales tax on all the listed items “. A political party that promised to do that would be faced immediately with the problem of finding an alternative method of obtaining a corresponding amount , of revenue; or if it did not do that it would have to reduce’ the amount of money it could spend on other things. Whilst I do not think there can be any argument, irrespective of politics, as to what was the intention behind the introduction of sales tax, there is no doubt that it has now created a problem in that, although the majority, if not all, of the people regard it as a vicious form of taxation, it is not easy to abolish.

Returning to the items with which this bill deals, the measure that will have the most impact and will do the most good for the limited number of people who will benefit from it is the reduction in the tax on household furniture. One wonders why, if the rate can be reduced from 8 J to 2± per cent, the tax could not be eliminated altogether. In many instances, sales tax at the rate of 2J per cent, on a comparatively cheap article would hardly pay for the cost of the book work associated with its imposition and collection. At the best, it could be said that it would be an irritant to the people who had to pay it and the people who had to carry it through their books. 1 believe that in the collection of it the Government would probably be on the wrong side of the ledger.

On the bigger purchases, such as when people are furnishing homes or buying dearer articles, the tax would represent £2 10s. in every £100; but generally the people paying the tax would be buying the articles on time payment. The tax would increase the amount of their indebtedness. They would also have to pay an extra amount of interest on the sales tax. So the real beneficiaries from the retention of the ra’e of 2i per cent, on particular articles will be the people who provide finance for the hire-purchase of the articles.

All in all, I believe that if the Govern.ment decided that the industries associated with the production of these articles were in such a state of decline that they needed to receive some sort of impetus by enticing people to purchase them, and therefore decided to reduce the rate from 8) to 2i per cent., the sensible thing to do would have been to make the articles completely free of sales tax. The only reason I can think of why the Government did not do that, or why the Government’s advisers did not recommend that, is that they said to themselves, “ If we make these particular goods free of sales tax altogether, there might come a time when we will want to collect sales tax on them and it will be much easier to increase the rate from 2i per cent, to 12i per cent., or some other figure, than to re-impose the sales tax on articles on which sales tax is not payable “. So, I say on behalf of the Opposition that, whilst we do not oppose this measure, we believe that if the argument was sufficiently great that the articles that we are discussing should have been singled out of the multiplicity of articles on which sales tax is imposed, the tax should have been eliminated altogether.

The other measure exempts certain vehicles from sales tax. Those vehicles are in a very limited range. It may be drawing the long bow to suggest that the fact that motor vehicles, chassis and motor omnibuses are mentioned in this bill opens up consideration of the whole field of sales tax on motor vehicles. Just under twelve months ago the Government decided that the employment situation in the motor-vehicle industry was such that it was necessary to place a curb on it. It decided to increase the rate of sales tax on motor vehicles from 30 to 40 per cent. This savage increasewas superimposed upon the credit restrictions that had been introduced in the Budget some two or three months earlier. Within a very short period of time, the Government had to admit that it had overplayed its hand. The measures taken under the Budget had already thrown a spanner into the vehicle building industry. They had brought about and were bringing about unemployment. According to the Government, the condition of the industry at that time was such that it was necessary to “ disemploy “ people engaged in it. That was the term that was used. It was alleged that the industry was importing so much steel, petrol and rubber into Australia that it needed to be dampened down. To-day, responsible spokesmen for the Government, including in some instances Ministers, are claiming that the industry i.self is retrenching employees when, there is really no need to do so. 1 am sorry that Senator Mckellar is not present in the chamber for, on this subject, he made one of the most stupid statements mat have been made since I have been in the Senate. He asked people, when they intended to buy a car, to think twice about buying one from General MotorsHolden’s Proprietary Limited because that company was retrenching and standing down workers for varying periods of time. All I can say is that Senator McKellar supported the Government all through the measures which it took to curb the industry. There was no denial by Government speakers that the intention was to make the vehicle building industry retrench labour. It was stated that the industry was making calls on available labour and on commodities which could be employed more usefully in other industries. One of the measures introduced by the Government increased the rate of sales tax on motor vehicles from 30 to 40 per cent.

The other measure was the credit squeeze. Anybody who knew anything about sales of motor cars knew that the credit squeeze would have a greater effect on that industry than on any other. If the Government did not know that, there were plenty of people to advise it that that was so. They knew that if you make it difficult for a person to sell the car he owns you make it difficult, if not impossible, for him to purchase a new car. All of those actions were deliberately designed by the Government with the stated intention of bringing about reduced employment in the industry. The Minis’.er for Labour and National Service (Mr. McMahon) is one person who stated that the motor vehicle industry was using the Government’s measures as an excuse for retrenching labour. We also heard the statement by Senator McKellar to which I have referred. I will read it because, as 1 said, it is one of the most irresponsible statements I can recall hearing in this place. He said -

I think that company-

That is, General Motors-Holden’s Proprietary Limited - is to be condemned most strongly for the attitude it has adopted to ils employees in the past four or five months. A lot of that company’s problems were brought about by over-production. But, although it made a huge profit last year, it used the measures adopted by the Government as an excuse to give a lot of its employees one week’s notice of dismissal and then to dismiss them. That was a dastardly act. 1 sincerely hope, as I have mentioned before, that when people go to buy new cars they will remember that action taken by General Motors-Holden’s Limited.

It is not for me to stand up here and act as an apologist for General Motors-Holden’s

Proprietary Limited. For many years I was on the other side of the negotiation table, arguing against that company. I do not think that anybody associated with the Company could claim that I was ever unfair. The statement I have read was most unfair. If a company reacts, in the manner desired, to a policy deliberately introduced by the Government, it is completely unfair for people who voted for the implementation of that policy to speak in that way. There may be an excuse for people who voted against the policy. Anybody who supported the Government in its action to reduce the number of people employed in the vehicle building industry is only playing politics when he criticizes the industry for taking such action.

Another aspect was completely unfair. It has been argued in some quarters that only General Motors-Holden’s Proprietary Limited reduced employees on a large scale. That is completely opposite to the truth. I do not think that any other large company has a better record in this respect than this company enterprise. Any company with a better record would be only a small company. The percentage of employees put off by the Ford Motor Company of Australia Proprietary Limited and Chrysler Aust. Limited was greater in each instance than the percentage put off by General Motors-Holden’s Proprietary Limited. I am not absolutely certain, but I am almost sure, that the same is true of the British Motor Corporation (Aust.) Proprietary Limited in Sydney. The whole of the industry reacted. The companies put off or stood down employees only because of the double-pronged attack of the Government, first in the form of the credit squeeze, and secondly, in the imposition, although for only a brief period, of higher sales tax. That increased sales tax applied long enough for a spanner to be thrown into the works of the industry, with large reductions in the sales of vehicles, both new and second-hand.

If this experience has no other effect, it should be a warning to the Government and to any government that follows it that before using sales tax as an economic measure it should make certain that it knows all there is to be known about the industry with which it is dealing. It should be the aim or all political parties to reduce sales tax. They might have to be a little more open about the measures by which they obtain revenue, lt might not be politically expedient for them to say, “ We shall reduce sales tax on such and such an article “, but nobody can present any really valid and logical argument for the continuation of sales tax, especially in respect of foodstuffs. It is clear that if there is a reduction of sales tax, an equivalent amount of revenue must be found from some other form of taxation. However, this action should be taken, even if it means that the people will think that they have a bitter pill to swallow and that they are in a worse position than they were before.

Under the recent Budget, the Government proposes to raise £150,000,000 from sales tax. It is common sense that if sales tax were abolished the Government would have to find £150,000,000 from some other source in order to give effect to all the proposals for which it has budgeted monies. Obviously the money would have to be raised in the form of heavier, graduated income tax, or by some other form of tax. Provided the method adopted was fair, the Government should have faced up to this alternative to sales tax. I certainly hope that when a Labour government comes into power it will face up to this position. We have declared that we will do so. lt is part of Labour’s policy that sales tax should be removed and we have promised that it will be removed immediately from certain named items. One of these is foodstuffs. One could spend a lot of time talking about the anomalies associated with this matter. One that has been frequently mentioned is that an ordinary bun is not subject to sales tax, but if it contains raisins it is subject to sales tax. If dough is made into bread, the finished article does not attract sales tax, but if sugar is added to the dough and biscuits are made, they are subject to sales tax.

Senator Aylett:

– There are books full of items which attract sales tax.

Senator RIDLEY:

– Yes. If I were to read a list of all the articles that attract sales tax, 1 would need more time than I could be allowed to-night.

Senator Aylett:

– It took me threequarters of an hour one night in a debate on the mo:ion for the adjournment of the Senate to go. through them.

Senator RIDLEY:

– It is a terrific list. A vicious circle has developed in these matters. The Senate, regardless of politics, should give some attention to it. Sales tax may have to be replaced by some form of taxation which on the surface is not popular, but if we explained and discussed it, something would be gained.

As I said earlier, although the Labour Opposition is not happy with the limits that the Government has fixed, some relief from sales tax is to be given to a limited number of people. Being thankful for small mercies we do not oppose the measure.

Senator WEDGWOOD:
Victoria

– I desire to speak very briefly in support of the measures before the Senate, the Sales Tax (Exemptions and Classifications) Bill and the Sales Tax Bills (Nos. 1a to 9a). I should like to commend the Government on its decision to remove sales tax from buses with seating accommodation for not fewer than twelve passengers and also from live-stock road trains operating in selected areas. Despite what Senator Ridley, has said, this decision has been very well received by owners of vehicles of these types, and already has had a beneficial effect on the trade. Last year sales tax rates on tankers was altered and this year the Government has widened the field.

The motor trade, as I understand it, is confident that the removal of sales tax on vehicles of these types will assist it considerably. This action will assist operators to re-appraise their replacement programme, both in respect of vehicle types and in respect of the economic operating life of vehicles. Already, some operators have found that relief from tax will allow them to replace their existing types of chassis with others of a better and more robust type. It will also allow bus operators to spend more money on bodies. That, in turn, will give greater comfort to the travelling public and will encourage operators to maintain a higher standard of repair and service to their vehicles. This, naturally, will lead to increased safety and economic running. It is expected that the community will benefit greatly from the purchase of better types of buses.

The Minister said tha: this legislation will bring private operators into line with government and other public transport authorities. That is not quite true. The private operator will be in the same position as a government or other public services as regards the purchase of a new vehicle, but the private operator will still be required to pay sales tax on spare parts, replacement parts, tires and so on. So he will not be in a position comparable to that of the public transport authority.

Last year I had an opportunity of seeing some of the road trains used for carrying stock in the Northern Territory. The removal of sales tax from those vehicles is a very real concession to people interested in the cattle industry. Anybody who has travelled over the northern and northwestern parts of Australia must be convinced that road trains provide the only suitable method of transporting stock in good condition to a rail-head or to an abattoir. This concession is far more than a concession to th: operators of road trains. It is another step in the development of the north and north-west of Australia. I am assured that the removal of sales tax will permit operators to purchase larger prime movers, as a result of which their operating costs per unit of load will be reduced. That in turn will be of great benefit to the general community.

I was surprised to hear Senator Ridley say that the reduction of sales tax on furniture from 81 per cent, to 21 per cent, would benefit only a very limited number of people. I would have thought that the concession would benefit a great numbe of people.

Senator Aylett:

– If the sales tax on baby food were reduced far more people would benefit.

Senator WEDGWOOD:

– I am not talking about baby food. I am replying to a statement made by Senator Ridley. The reduction of sales tax on household furniture and equipment will be of benefit to every person setting up a home or purchasing new furniture. I think this is a substantial concession.

The Government is to be commended on exempting from sales tax the vehicles to which I have referred and on reducing sales tax on furniture. I heartily support the bill.

Senator AYLETT (Tasmania) L8.32]. - Naturally, I cannot oppose this bill, but I do see in it indications that the tail is wagging the dog. With the elections looming close the Australian Country Party has applied pressure on the Government for some reductions in sales tax. Where are those reductions applied? Are they applied to baby food or special food required by invalids? At present those articles are taxed to the hilt. Or are the reductions applied so as to benefit the big squatters in the outback? The reductions provided under this legislation will not benefit the general community. I cannot see any reason for Senator Wedgwood to congratulate the Government. The heavy vehicles that are now to be exempt from sales tax serve only one section of the community. Vehicles that serve the general community and the average wage-earner still will be subject to sales tax. This is sectional class legislation. It is a classic example of the Country Party exerting pressure on the Liberal Party or, in plain language, of the tail wagging the dog. No doubt many members of the Liberal Party would like to see a reduction in sales tax on such things as special invalid food - food that these people must have from day to day and which now carries sales tax at 121 per cent. No doubt they would also like to see a reduction of sales tax on baby food. The older generation may not have a great deal of interest in the amount of sales tax levied on baby food because in their day such articles were not subject to sales tax. It is the younger generation that is paying this heavy impost of sales tax on baby food. How many people will benefit from the fact that road trains travelling across the Northern Territory are to be exempt from sales tax? The only people who will benefit are a few big squatters who help to purchase these vehicles. It is not the small farmer with 100 acres and rearing a big family who will benefit; it is the man who measures his holdings in terms of thousands of square miles. Some of the stations in the outback are as big as Victoria itself. It is those people who will obtain relief from the fact that these large vehicles are to be exempt from sales tax. Senator Wedgwood commended the Government for introducing this legislation but she was really commending the Country Party for being the tail that wagged the dog.

If the Government thinks that these large vehicles should be exempt from sales tax why does it not remove sales tax from all vehicles engaged in carrying foodstuffs? I think this legislation is the thin edge of the wedge and that very soon we will see sales tax removed from the big semi-trailers that are now smashing our highways. First the big cattle trains; next the interstate semitrailers, ls the small man who brings his produce to market from his 100-acre farm to benefit under this legislation? Of course not! Will there be any benefit to the small transport operator who carries market produce to the wharfs or factories? Of course not! This is sectional legislation. The Country Party is cracking the whip over the Liberal Party.

But there is a little sugar coating to the pill. The Liberals must have a say, so the Government has decided to reduce sales tax on furniture from 8i per cent, to 2i per cent. Why did not the Government remove sales tax completely from furniture, as Senator Ridley suggested? The fact is that if sales tax were removed completely some of your public servants would be displaced. The revenue collected by the Government from the 2i per cent, sales tax on furniture would not pay the overhead expenses involved in collecting it. The Government will gain nothing from the 2i per cent, sales tax. The payment of 2i per cent, sales tax will involve factories and warehouses in just as much accounting and bookkeeping as did the payment of 84 per cent, sales tax. They will still be forced to employ as many staff in calculating the amount of sales tax as they did formerly, and that expense will be added to the price of the furniture. Why not remove the tax completely? It would not have cost the Government much to remove the tax completely, but it decided to leave the tax at 2i per cent. Why? I think Senator Ridley hit the nail on the head. 1 have seen similar things happen in the past. With an election coming up I have seen the Government remove sales tax from an article, only to restore it after the election. If sales tax had been removed completely in this case there would have been a great hue and cry if the Government had sought to re-impose it. It is very easy to increase the rate of sales tax while provision exists to impose the tax. The Government is holding the whip in its hand, in effect, and is saying, “ Presently we will bring the lash down on you again “. The machinery still exists to increase the rate of tax. If the Government had reduced or abolished- the tax on babies’ food instead of on babies’ cots, Senator Wedgwood would have had cause to congratulate the Government. But the Government has reduced the rate of tax on babies’ cots, only one of which is bought in a baby’s lifetime, but the tax on babies’ food is to be paid year after year.

When a baby is taken off babies’ food and is put on to biscuits, the sales tax is still payable. But there is no tax on biscuits for ladies’ poodles. When babies get beyond the biscuit stage and reach the stage of eating grocery items, sales tax is still payable. One night in this chamber I quoted from a retailers’ journal for threequarters .of an hour - I did not get right through the list - everyday grocery items which attracted sales tax at the rate of 81 per cent., 12i per cent, and even as high as 17i per cent, and 18$ per cent. The Government says, “ We are giving great relief by reducing the tax on furniture “. Furniture items are bought only once, or perhaps twice, in a lifetime. But the high rate of tax remains on everyday items. What a lot there is to congratulate the Government upon!

Is this reduction of sales tax designed to relieve the burden that is being borne by people who purchase furniture? That is not the Government’s aim at all. The Government has not had any thought for those people. The Minister for Civil Aviation made it perfectly clear in his second-reading speech that that was not the idea behind the reduction of the sales tax on furniture. He said -

The goods in question are specified in the Third Schedule to the Sales Tax (Exemptions and Classifications) Act a-nd include such items as refrigerators, washing machines and floor coverings.

We have no objection to the easing of sales tax on those items. Just listen to the explanation given by the Minister in support of the reduction of sales tax on furniture. He said -

There is evidence that sales of these goods have shown a downward trend with a resultant adverse effect on the manufacturing industries concerned. The Government believes that this measure should encourage the buying of these classes of goods, thus assisting the industries producing them, as well as suppliers of materials and components used in their manufacture.

The Government’s thoughts were with the manufacturers, not with the persons who were buying the furniture to set up home. lt was the credit squeeze, which threw 150,000 people on to the scrap heap of unemployment, and not the sales tax which caused sales to decline. To lift the volume of purchases and to bring these industries back to the position in which they were placed earlier, the Government will find it necessary to place in full-time employment the men who are now unemployed or who are in part-time employment. It is because men have beon thrown out of employment, particularly single men who have had to postpone marriage probably indefinitely, that sales have dropped.

Another factor which has restricted sales has been the unavailability of hire-purchase finance to many honest people who were in employment. To congratulate the Government upon having reduced thi rate of sales tax on furniture from 8i per cent, to 2i per cent, while it retains sales tax on food for babies and sick persons is the height of absurdity. I repeat that it is the height of absurdity for anybody to congratulate the Government on what is has done when it retains a vicious rate of tax on the young, the innocent and the sick while it gives relief to transport hauliers and people who own cattle stations, some of which are as big as Victoria. How can anybody congratulate the Government on having introduced this sort of legislation? Except on two or three occasions just before an election, this Government has done nothing in relation to sales tax but to increase it. Year after year the government that was in office before this Government reduced the rats of sales tax on various commodities. That government had so reduced the incidence of sales tax that collections amounted to a mere fSO.000,000 a year. Just let us compare that sum with what this Government is collecting to-day. This Government is collecting more than twice, or even three times, that amount. As I said earlier, this Government has done nothing about sales tax but to increase it, except before election time.

Senator Hannan:

– How much did you say it is to-day?

Senator Ridley:

– It is £150,000.000 a year.

Senator AYLETT:

– I did not mention any figure. What is the matter with you, Senator Hannan? Put your hearing aid on! This Government, having increased the rate of tax, is collecting £100,000,000 a year more in sales tax than the Labour Government collected. Let the honorable senator deny that if he can. He cannot deny it. I am using only the figures mentioned by the Minister. If I am not quoting the correct figures, then the Minister himself was not quoting correct figures.

Senator Branson:

– Why do you not oppose the bill if you feel so strongly about it.

Senator AYLETT:

– We are always thankful for small mercies when the lion has his foot on us and may squeeze us at any time. We are hoping that some day even Senator Branson will see the light and will have some regard for invalids and parents who are paying. 12i per cent, tax on the everyday lines they must buy. Wc are hoping that he will come around to that way of thinking and will agree that these persons whom 1 have just mentioned are entitled to just as much, if not more, consideration than are the big hauliers in the far west or the man who is furnishing a block of eight or ten flats to let at high rentals.

Who will benefit most by the proposed reduction of tax from 81 per cent, to 2i per cent.? Will it be the general wageearner who furnishes very meagrely or the man who intends to furnish ten or twenty flats to let at high rentals? Let honorable senators opposite ask themselves that question; it is easy to answer. This is sectional legislation. If the Government were to introduce amending legislation to reduce the rate of tax on the commodities that sick people and others must purchase daily, even I would congratulate the Government. The Government is just raking the money in. It could have given £100,000,000 worth of sales tax relief without having to increase taxation in other directions to make good the loss of revenue. I point out that in last year’s Budget a sufficient sum was placed in reserve to provide for a surplus of £115,000.000. Therefore, the Government could have budgeted for a surplus of £15,000,000 and still have reduced sales tax on everyday commodities to the extent of £1-00,000,000. I do not think that any honorable senator opposite can deny that proposition on the figures.

There is no excuse for such a vicious tax, as Senator Ridley has described it, in the time of prosperity that this country has gone through. It should not be increased year after year.

Senator Wedgwood:

– It is good to hear you say that this is a time of prosperity.

Senator Hannan:

– Yes. We will remember that.

Senator AYLETT:

– I particularly looked at Senator Hannan when I said that, because the lime that he has been in the Senate has been the most prosperous period of his life, and the same comment goes for Senator Wedgwood, too. It should not be thought that when I speak of prosperity I am referring to the people who are drawing the unemployment benefit. Taking the country as a whole, the majority of the people are prosperous, but a minority of them are not prosperous and are suffering great hardships. No government which kept 100,000 people unemployed, no matter how prosperous other sections of the community were, could claim that it was a democratic government. There is more money-class distinction in Australia to-day than ever before. This country is becoming more like America and India every day. One section of the community is becoming wealthier while another section is becoming poorer and poorer. If you go to India, Mr. Acting Deputy President, you will find two classes, the down-and-out and the wealthy. There are no in-betweens there. This Government, by means of legislation of the kind we are discussing, is bringing Australia to the same state. If you go to America you will find hundeds of millionaires, and you will also find hundreds of thousands - in fact, millions - like the 100,000 who are on the dole in Australia.

This kind of legislation cannot be called democratic legislation. The Government cannot be commended for introducing class legislation that is going to make the poor section of the community poorer and the wealthy section even wealthier. That is exactly what legislation of this nature does. If the incidence of sales tax on every-day commodities had been alleviated it would have given some relief to the family man. We cannot oppose the bill because it is a step forward, no matter how small. It is like a bit of fly dirt in the ocean, but it is better than nothing. The Government has the numbers. We have not. It would be of no use for us to move an amendment to the effect that sales tax on other commodities be reduced, because that would be completely out of order. But for the life of me I cannot understand why the Government did not remove sales tax altogether from furniture and other articles. Perhaps it did not do so for the reason I have mentioned. Perhaps it has friends in the Public Service and does not want to deplete the Public Service.

While sales tax is payable on so many items, furniture dealers and other small business people have to send in statistics each year showing their stock on hand, the quantities they have sold during the year, and so on. All those records have to be filed, and if “there were no sales tax there would be no need to keep the records. But if we consider the expense of collecting the tax, surely it is obvious that it would be far better for all concerned if the tax were removed altogether. When the Minister replies to the debate, if he does us the courtesy of replying, he might tell us the reason why sales tax at the rate of 2i per cent, has been kept on furniture and the other articles I have mentioned. He might say why he did not confer a benefit on his big friend who is building a multi-story block of flats and furnishing them, instead of compelling him to pay sales tax at the rate of 2i per cent. He might also say why the man who is saving to get married is compelled to pay sales tax at that rate on the furniture he wants to buy.

Why has that been done if it is not for the purpose of keeping somebody m a job? I say that the people who are compiling these statistics could easily be absorbed in other directions, in a country that is expanding like ours and where industry is increasing each year and the population growing. If that could not be done, why not transfer public servants from one department to another, instead of sacking them? Perhaps it is that officers of the Public Service who have a number of men under them would be downgraded, or they might have to find other jobs, if the number under them were to be reduced. Perhaps it is that the greater the number of employees under their control, the better are their chances of promotion, and it may even be that when an officer has a certain number of people under his control he is entitled to further promotion. Therefore, the Public Service cannot be depleted. It must be kept going - the Public Service will see to that.

If the Minister is truthful he will probably say that his advisers have told him that it would be wise to keep sales tax on at the rate of 21 per cent. I do nol wish to say anything disparaging about public servants because they do a really good job, but they also know how to keep themselves in cushy jobs. You cannot blame anybody for wanting to keep himself in a cushy job and to twirl a Minister round his finger. No doubt we will find that the Minister’s advisers or some of his staff in the Public Service have advised him, for this reason or that, to keep sales tax on at the rate of 21 per cent. Probably, somebody in the Treasury has advised him that the country would go bankrupt unless he did so, but I venture to say that if the Government is returned at the forthcoming general election, within eighteen months of the election date the rate of sales tax on furniture will again be 121 per cent.

I have listened time and again in this chamber to Senator Wedgwood congratulating the Government on legislation of this kind. All I can say is that if the Government ever gave relief to the sick, the invalids, the babies and the families who are bearing a crushing burden of sales tax, I would love to be here to listen to the congratulations she would pour out.

Senator Sir WALTER COOPER (Queensland) [8.59]. - I am sure that those to whom the proposed exemptions of sales tax apply fully appreciate the concessions that the Government has granted in the Budget. However, I do not think that the exemptions go far enough. The private omnibus owner is not to be treated in the same way as. the owner of a private railway. Proposed new item 1 1 9b of the First Schedule refers to -

Goods for use (whether as goods or in some other form, but not as goods for sale) by a person exclusively in, or exclusively in connexion with, the establishment, operation or maintenance by that person of a railway providing, for use by the public, a service for the transport of persons or goods.

Any goods required for the maintenance or repair of a private railway will be completely exempt from sales tax. Proposed new item 119c deals with the exemption of omnibuses and refers to -

Omnibuses providing seating accommodation for not less than twelve adult passengers for use exclusively or principally in the transport of passengers for reward.

There is no mention there of spare parts, of articles required for maintenance or anything of that kind. The proposed item then goes on to refer to -

Chassis for the construction of omnibuses specified in sub-item (1) of this item.

That item will exempt complete omnibuses from the sales tax, but there will be no exemption, as I have said, of spare parts and of articles required for maintenance. On those goods private operators will be required to pay sales tax.

The owner of a private railway and a private omnibus operator have similar objectives. They both transport persons for reward. Therefore, I cannot understand why, in the matter of sales tax, a private railway should be treated differently from a private omnibus company. I remind the Senate that this Government prides itself on its support of private enterprise, particularly in the field of transport. It is the policy of the Government, explained in this chamber time after time, that the two major airlines operating in this country - one a government airline and the other a private enterprise airline - shall be treated in exactly the same way and shall pay taxes on the same scale. However, there has been a departure from this principle in the field of road transport, and a private omnibus operator, by reason of a requirement to pay sales tax on certain articles, is put at a disadvantage in competing with municipal omnibus services or with railways.

I think a mistake has been made. Probably the Treasurer intended that articles required for the maintenance or repair of omnibuses should be free of sales tax. It is entirely against the policy of the Government to place a heavier burden upon one form of transport than upon another. I would like the Treasurer to look into this matter and to say whether a mistake has been made by not extending to private omnibus companies the sales tax privileges that are extended to government-owned or municipal omnibus services.

There are three major private omnibus companies operating in the City of Brisbane and in Greater Brisbane. They are in competition with the State railways - whicH pay no taxes at all and are operated at a heavy loss - and with the Brisbane City Council, which operates omnibuses, also at a heavy loss. Last year that loss was in the vicinity of £500,000. No private company could afford to bear a loss of that kind. The private omnibus companies are at a considerable disadvantage. The State railways and the City Council’s omnibus section could reduce fares, if they wanted to do so, because losses on their services are paid by the taxpayers. That is not so with the private companies. The State railways, as I have said, pay no taxes at all. The Brisbane City Council, which operates its own omnibuses, pays a road tax of 4 per cent, of gross takings. That is a State tax. It pays also a tax of ls. a gallon on distillate. That is a federal tax which was imposed in, I think, 1957. The distillate tax works out at about 3 per cent, of gross takings. Therefore, 7 per cent, of the gross takings of the City Council’s omnibuses is taken by those two taxes. The omnibuses operated by the council are exempted from the sales tax in all its aspects; no sales tax is paid on new omnibuses, on spare parts or on anything of that type. The private operators pay a road tax of 10 per cent, of gross takings and a distillate tax of ls. a gallon, which accounts for 3 per cent, of gross takings, making 13 per cent, in all. The registration fee which must be paid to the State is, on an average, £75 for each bus. In addition, the private companies pay the full rate of sales tax on all spare parts, on goods required for maintenance and so on.

I believe that the gross takings of each of those three private companies would not be less than £100,000 a year. On that basis, the 10 per cent, road tax would involve a payment of £10,000 and the distillate tax a payment of £3,000. Therefore, each company has to pay £13,000 in that way before it can make a profit. In addition, it has to pay registration fees. I do not think it is the desire of the Government to put private enterprise at such a great disadvantage, especially when we remember that private railways are to be given the benefit of an exemption from sales tax of articles required for maintenance and repair. I understand that nothing can be done until next year, but hope that the Treasurer will look with favour on the suggestions I have made, and will, in fact, carry out the Government’s policy. The Government has always said that it is in favour of giving private enterprise a fair deal, and has demonstrated that in regard to airways. I hope that the Government will carry out the same policy in regard to private omnibus owners by giving them the opportunity to compete on equal terms with State-owned transport in the various cities of Australia, instead of being slugged to the extent that I have shown to-night.

Senator WRIGHT:
Tasmania

.- I wish briefly to make three points. Firstly, I congratulate the Government on the relief that has been given to purchasers of household goods and appliances. It is a substantial relief which is most welcome because it is spread over a very large section of the community.

Secondly, I wish to make pointed reference to the exemption of certain types of omnibuses from sales tax. I am quite puzzled by this provision. I have listened to Senator Sir Walter Cooper’s speech with appreciation. I notice that the exemption applies to complete omnibuses and also to omnibus chassis, but that it is confined to those omnibuses which have a seating capacity of not less than twelve adult passengers. What is the criterion? Is the desire to equate business conveyances for passengers with rail services and municipal omnibuses? It is obvious from what Senator Sir Walter Cooper has said that such is impossible because the States have long since adopted a policy whereby private enterprise has been taxed to make some contribution to public transport. Why is the measure restricted to 12-seater passenger buses? We have general hire auto cars and omnibuses with ten seats. Why do they not receive the benefit? Why do not school buses that carry non-adult passengers receive the benefit? I should like to understand the principle that governs this measure, and I pose these questions, hoping that I will be afforded some insight into the reasons why this type of road transport has been selected for exemption. Why, too, do taxis still have to pay sales tax?

It is obvious that some big omnibus proprietors with organizations throughout Australia stand to receive a very great benefit from this exemption. I recall that in recent months the Senate discussed a little bill to exempt from sales tax tankers used to transport milk. When the majority of the Senate sought to extend that exemption to conveyances owned, not only by producers but also by carriers - even when the vehicles were to be used exclusively in milk transport - we were told that to grant such a concession would open up the whole field of transport. Well, it seems to me as though that little excursion has led to the idea that this exemption should be. given, but I must say I do not see very much connexion between the two cases.

The third point I make is just the quiet observation that the sales tax of 30 per cent., which was imposed on motor cars in 1955 or 1956 to redress the then imbalance of payments, still remains. One will watch patiently for a revision of that situation.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

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

– I should like to reply to one or two matters that were raised during the second-reading debate. Senator Sir Walter Cooper discussed the matter of sales tax on omnibus parts. It is difficult to arrive at an equitable system whereby one could ascertain where the parts went.

Senator Sir Walter Cooper:

– At the present time the Brisbane City Council pays nothing. Exactly the same agreement applies; the parts could go astray.

Senator HENTY:

– I see the point that Senator Sir Walter Cooper is making and I shall bring the matter before the Treasurer (Mr. Harold Holt); but the difficulty would be in private enterprise to differentiate between parts that were used in a truck owned by a transport company and the same parts that were used in an omnibus belonging to that company. The difficulty could no doubt be overcome if attention were paid to it.

Senator Wright raised the matter of school buses.I understand that if school buses have sufficient room to seat twelve adultpeople, then they are exempt whether they carry 30 or 40 school children or only eight or ten. So long as they have sufficient room to cater for twelve adult passengers I understand they are exempt from tax.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

SALES TAX BILLS (Nos. 1a to 9a) 1961.

Second Reading

Consideration resumed from 1 9th October (vide page 1325), on motion by Senator Paltridge -

That the bills be now read a second time.

Question resolved in the affirmative.

Bills read a second time, and passed through their remaining stages without requests or debate.

page 1428

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 3) 1951

Second Reading

Debate resumed from 20th October (vide page 1344), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator POKE:
Tasmania

.- The bill now before the Senate is a typical Government bill in that it is full of verbiage. That is about all one can say of it. It does relatively nothingto relieve taxation, in the broad sense at least. The proposals in the bill come broadly under five headings, two of which give a small measure of relief to primary producers. No doubt that is a pleasing feature for them. It brings back to our minds a point that was made by Senator Aylett earlier this evening when he said that the tail had wagged the dog, that the Australian Country Party exerted pressure on the Liberal Party to give various concessions to people who they hope will support them at the next election. However, it is pleasing to see that some sections of primary producers receive some relief under the bill.

The first proposal contained in the bill authorizes an income tax reduction for expenditure on the purchase and laying of pipes to convey water. It covers a very limited field of primary producers. In the main, it covers only those in irrigated areas. It is typical of the Government to give a measure of relief to only a section of the community. It is pretty noticeable that over a period of time the Government has become a sectional government. That was brought out very forcibly in the debate on the two bills which have just been passed. In those bills the Government endeavoured to give relief to certain sections of the community and then endeavoured to amplify its actions by the elaborate verbiage in the bills; but when that verbiage is analysed it is just plain humbug. That is all that can be said of this bill.

Apparently the Government has had some regard for the recommendations of the Commonwealth committee that was set up to inquire into taxation. The report of that committee contains recommendations which the Government is now bringing forward in the form of a bill. The Government should not have taken the report piecemeal, as it has; rather should it have given effect to a number, if not all, of the recommendations in the committee’s report. It contains some quite good recommendations. I shall refer to one of them at a later stage of my speech.

The second proposal in the bill also gives relief to primary producers. It relates to compensation which is paid for the loss of live-stock. Compensation is paid under certain conditions, such as when stock die or have to be destroyed compulsorily to control or eradicate a disease. This provision is long overdue. The Government should have given attention to this matter long before it has. That is typical of this Government. It has not displayed any degree of foresight in this provision. It has displayed very little foresight in most of the legislation it has introduced. It displays lack of foresight particularly in provisions which will give some benefit to the taxpayers who can least afford to pay heavy taxation. Again I refer to people to whom reference was made in the debate on the previous two bills, such as people with large families. They have to pay considerable sums which they do not know they are paying, in sales tax on foodstuffs, wearing apparel and such things.

I do not profess to know very much about all of the third proposal in the bill; but one aspect of that proposal is afforestation projects. I know a little about that aspect, so I will confine my remarks to it. It appears to me that it is desirable to allow a deduction for calls paid to afforestation companies. I believe that afforestation is not being carried out in Australia to-day to the extent to which it should be. We must face the fact that inevitably we will denude our forests of timber. One of the answers to that problem is to pay more attention to afforestation. This is one of the good features of this bill, although again the good feature is lost in the verbiage of the bill.

Another proposal adds the Ian Clunies Ross Memorial Foundation to the already long list of organizations, contributions to which are allowable taxation deductions. That is a step in the right direction. We all will agree that Sir Ian Clunies Ross was a very great man. He did a great job as chairman of the Commonwealth Scientific and Industrial Research Organization. Probably no man in any department has done a greater job for Australia than he did in the C.S.I.R.O.. It is appropriate that he should be remembered for the work that he did ‘in all the fields covered by that organization.

Another matter to which I wish to refer is the proposal in respect of the deduction for medical expenses. That proposal gives a small degree of relief, but it does not give relief to many of the taxpayers to whom I believe it should be given. This bill retains the limit of £150 for medical expenses. The benefit which is given is in the deletion of the limit of £30 for dental expenses. That amendment is desirable, but very few people will derive much benefit from it. However, it is desirable because quite often a set of dentures costs up to £80. In the past, a taxpayer would often arrange with his dentist to pay part of the cost of the dentures in one tax year and the other part in the next tax year. That would enable the taxpayer to claim at least £60 of his dental expenses over a period of two tax years. Very few people will derive any benefit from the raising of the ceiling allowance for dental expenses. The Government has apparently adopted the recommendation of the Commonwealth Committee on Taxation that was established some months ago. This matter is referred to in paragraph 397 of the committee’s report. It is very significant that while the Government is giving effect to the recommendation contained in that paragraph, it is completely disregarding the recommendation in paragraph 399, which relates to taxation relief in respect of dentures manufactured by a qualified dental mechanic. I have spoken on this matter in the Senate on several occasions. 1 shall never be satisfied until the Government makes provision for deductions in respect of expenditure on dentures made by a qualified dental mechanic as provided in Tasmanian legislation.

Senator Wedgwood:

– But not in Victorian legislation.

Senator POKE:

– 1 am not concerned about what is happening in Victoria. I am confining my remarks to the position in Tasmania, where a considerable number of people go to qualified dental mechanics. The legislation provides safeguards. 1 have in my mouth dentures made by a dental mechanic. It is my fifth set of dentures and I have never had better. The Government should give consideration to this matter. Where there is provision for a person to go to a qualified dental mechanic for dentures, the Government should allow as a taxation deduction th? expenditure incurred.

I desire to touch on one or two other matters. For quite some time there has not been any increase in concessional allowances for dependants. In 1915 a taxpayer was allowed £104 as a deduction for a dependent wife, £78 for the first child, and £52 for the second and subsequent children. In 1953 the amount allowed in respect of a dependent wife was raised to £130. The other amounts remained the same. In 1957 the allowance for a dependent wife was raised to £143, for the first child to £91, and for the second and subsequent children to £65. These allowances require a complete overhaul. In view of the ever-ascending spiral of costs, the Government should have a look at this avenue. Had the Government increased these amounts, it would have had a good talking point at the coming election. Its failure to do so has turned the point in our favour, because we can attack the Government for not having had some regard to this matter.

The Commonwealth Committee on Taxation recommended that a taxpayer who has an invalid wife and pays a house keeper to care for her should be granted a taxation concession in respect of the expenses incurred. The Government could very well have done something in that direction. Very many men who have invalid wives incur heavy expenditure in paying and feeding a housekeeper. The Government should have done something to relieve that burden.

While the Opposition is critical of tha bill, we acknowledge that some concessions are made in it. Consequently, we do no: oppose the bill. Our position is the same as it was in respect of the sales tax legislation. We have to be thankful for small mercies and on that note, I conclude.

Senator LAUGHT:
South Australia

– I rise to support the bill, and I compliment Senator Poke on the speech that he has made. I believe that this is the first occasion on which he has been the principal Opposition speaker on a taxation measure. I think that he treated the whole measure with generosity and I agree with hint that although the b.’ll does not contain much in the way of concessions to taxpayers it does contain something. However, I think it needs examination. Although Senator Poke has examined it to a point, I must disagree with him on some of the points he has made.

I am very grateful that the bill makes reference to the matter of water piping for primary producers. Paragraph 522 of ihe report of the Commonwealth Committee on Taxation deals with this matter. It is q site apparent that the committee’s recommendation in paragraph 523 has been followed by the Government. Previously it was possible only to deduct, in the year of expenditure, expenditure for irrigation channels or similar structural improvements; now it will be possible to deduct, in the year of expenditure, expenditure for piping placed underground. The Government has shown imagination in providing for this deduction, because in Australia water is becoming more and more important. As piping is now readily obtainable, it is desirable that some incentive be given for the use of piping rather than just for the use of irrigation channels, wherein evaporation takes place so easily.

Senator Wright:

– What about piping on the surface of the ground for irrigation purposes?

Senator LAUGHT:

– I understand that that is covered in another provision. 1 believe that the Government is doing substantial justice with regard to the destruction of live-stock. Having now considered the position of the interposed company, I think that the Government has provided a substantial measure of justice by allowing as deductions calls paid to companies engaged principally in mining, prospecting or afforestation.

Senator Poke claimed that the provision relating to dental expenses should be widened. I agree that the removal of the ceiling limit of £30 in respect of dental expenses is a step in the right direction, but 1 do not agree with Senator Poke that amounts paid to denial mechanics should be allowable deductions for income tax purposes. The Commonwealth Committee on Taxation has considered this aspect and has stated in paragraph 398 of its report -

In Tasmania, subject to certain safeguards, legally qualified dental mechanics registered as such may supply dentures direct to the public and charge for their work, but because they are not legally qualified “ dentists “ their patients cannot claim for their fees as “ medical expenses “.

Until this matter is covered by more States than one I do not think any anomaly arises. 1 agree with the Government in not extending the deduction further than is indicated in this bill.

Senator Wright:

– Would you remind the Senate what view the committee took on that?

Senator LAUGHT:

– The committee recommended, in paragraph 399 of its report - that the definition of “ medical expenses “ in Section 82f (3) should be amended so as to include payments made to a legally qualified and authorized dental mechanic for the supply of artificial teeth. 1 agree with Senator Poke that it is good to see that donations made to the Ian Clunies Ross Memorial Foundation may be claimed as deductions. Section 78 of the act deals with deductions. That section has become inordinately long. Reading tha section one is unable to see any method which successive governments have evolved for making deductions available to the general public. I hope that this Government will in future endeavour to group the types of charities donations to which are allowable deductions. The section lists such organizations as the Royal Australasian College of Surgeons, the Sydney Opera House Appeal Fund, the Sidney Meyer Musical Bowl Trust, the Council for Jewish Education in Schools and the Australian Productivity Council. It appears to me that charities are added one by one - in some years more than one is added - to the list without any attempt to classify them. I would like to see some attempt made in the future to group the charities to which donations may be made and claimed as deductions for income tax purposes.

I am mindful that the far-reaching report of the Commonwealth Committee on Taxation has virtually as yet not been acted upon. Speaking in another place on 17th August last the Treasurer (Mr. Harold Holt) when tabling the report of the committee said -

We shall have to consider, with the assistance of the Commissioner of Taxation, just how the adoption of these recommendations would work out, and decide, of course, having regard to considerations of policy, to what extent the recommendations should be adopted. However, the recommendations will be considered at the appropriate time by the Government, but they will have to be treated, I repeat, as taxation policy issues.

It is obvious that the Government has not done anything material with regard to that report. 1 earnestly hope that the Government is at this moment giving due consideration to the important matters contained in the report. I am prepared without reservation to support the bill, but 1 urge on the Government, as it surely will be the government after the election, to do something materially worth while about the report and something of which it can be proud.

Question resolved in the affirmative.

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

page 1431

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1961

Second Reading

Debate resumed from 20th October (vide page 1345), on motion by Senator Paltridge-

Th- the bill be now read a second time.

Senator POKE:
Tasmania

.- This bill increases the amount of income that is exempt from tax by reason of the age allowance. That is a very desirable feature of the legislation. The Opposition does not oppose the bill.

Question resolved in the affirmative.

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

page 1432

SUPERANNUATION (PENSION INCREASES) BILL 1961

Second Reading

Debate resumed from 20th October (vide page 1346), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator SANDFORD:
Victoria

– This bill provides for an increase in superannuation payments made to certain persons, principally male ex-members of the Commonwealth Public Service who retired prior to April, 1954. Those people have received no increase in their superannuation payments since that time. The Opposition does not oppose this measure, but we wish to pass a few comments on it. Superannuation was intended originally to give people a degree of security after they had reached the retiring age. It is interesting to note that when the Superannuation Act of 1922 was passed the value of the unit was 10s. In 1947 it was raised to 12s. 6d. It was further increased in. 1951 and in 1954, and it now stands at 17s. 6d. It is interesting to note also that in 1947 the maximum number of units which a Commonwealth public servant could take out was increased from sixteen to 26. That number was further increased in 1954 from 26 to 36, and since then, it has been increased to 54. The Treasurer (Mr. Harold Holt), who introduced the bill in another place, said it was a rather complicated measure and that the details would be given at the committee stage. I am hoping that those details will be given at the committee stage in this place by the Minister who is in charge of the bill.

The bill will have the effect of rendering great assistance to certain superannuitants. Public servants who retired prior to April, 1954, will be placed on a basis which is more equitable with that of public servants who have retired since that time. The value of money is infinitely lower to-day than it was when the superannuation scheme was first introduced. In 1922, as I have mentioned, the value of the superannuation unit was 10s. The basic wage then was £4 a week; now it is £14 8s. a week. It will be seen that, although the basic wage has more than trebled in terms of money, the value of the superannuation unit has increased by only 75 per cent. If the value of the superannuation unit had kept pace with the increase of the basic wage, it would now be more than 30s. It is important to remember that, although in the early days superannuation gave a certain amount of security, because of the unbridled inflation for which this Government has been responsible the value of superannuation to the recipient has greatly diminished, particularly to persons in the lower salary groups. A person’s eligibility for a full age pension is affected as soon as his income exceeds £3 10s. a week. I mentioned earlier that since 1922 the basic . wage has risen from £4 to £14 8s - an increase of 360 per cent. In 1922 the age pension was £1 a week.

The Opposition believes that the value of the unit should be increased beyond 17s. 6d, particularly for persons in the lower income group. I do not know the value of the unit in other States, ‘but under the State superannuation scheme in Victoria the value of each of the first four units is £1. If a person’s salary does not exceed £195, he can take two units, which entitles him to a pension of £104 a year. Three units would entitle a penson to a pension of £.156, and four units would entitle him to a pension of £208. From that point onwards the value of the unit drops below £1. I believe that a provision similar to that could have been included in this bill to give greater assistance to persons in the lower income groups. They are the persons who are being most severely hit by the condition of inflation which has characterized the reign of this Government.

It cannot be said that the Commonwealth Superannuation - Fund cannot stand any such increase. I remind the Senate that in’ 1957 the Public Service unions and the Public Service Board recommended to the Government that the value of the unit beraised to £1. The Commonwealth Superannuation Fund is very buoyant. I shall cite some figures to prove that statement. At 1st July, 1960, the fund stood, in round figures, at £71,000,000. By 30th June, 1961, the balance had risen to approximately £80,000,000 - an increase of £9,000,000 in twelve months. I repeat that it cannot be said that the fund could not stand an increase in the value of the unit.

It is interesting to note that the income of the fund last financial year was £18,685,000 and that payments amounted to only about £9,000,000. The earnings of the fund amounted to £3,528,000. Those figures show the need for the value of the unit of superannuation to be increased. If necessary, that could be done by increasing the value of units on a sliding scale, as has been done in Victoria.

The average pension being received by married contributors is £12 10s. a week. The Government is saving on the scheme. In normal circumstances, a married couple who were entitled to the age pension would receive £10 10s. a week. It must be remembered that public servants and others who contribute to superannuation schemes pay into the fund all their working lives to provide a measure of security in their retirement. At the same time, they are called upon to pay taxes that are used to provide age pensions. I appreciate that there are many difficulties in the way of providing justice in superannuation funds such as that we are discussing to-night, but surely an effort could be made at least to see that those in the lower income groups received better treatment than they are receiving at the moment. The Superannuation Act was enacted on 15th September, 1922.

The Attorney-General of the day, when introducing the original bill, stated -

The object of the scheme now submitted is to provide payments for those who have given a life-long service to the Commonwealth so that when they reach the age limit for retirement, they will not find themselves in a position of pecuniary embarrassment. Moreover, should they during their term of service become permanently incapacitated, they will not altogether be without means of support, neither their widows nor their dependants.

That ..was the original intention of the legislation and that is the intention to-day. I realize, of course, that it is not possible to remove all injustice. There must be anomalies with whatever adjustments are made, whether they are made at one level or another. There will always be a line of demarcation, so that those who are on the wrong side of the line suffer injustice. I know that unless and until the means test is removed entirely injustice will never be completely overcome.

It is interesting to note that the AuditorGeneral, after emphasizing the solvency and buoyancy of the fund, stated in his report that in 1955 there were 79,000 contributors to it. By 1959, the number had jumped to 96,000. The number of persons in receipt of superannuation pensions was then approximately 17,000. There are many anomalies in relation to this fund, Mr. President. The Minister for Civil Aviation (Senator Paltridge) stated when he was introducing the bill in this chamber that it dealt with a very complex subject. He said that the proposed adjustments would be explained at the committee stage and that the second-reading speech was intended to give only a broad outline of the proposals.

I hope that the Government will look into this matter - I was going to say “ next year “, but of course it will not be in office next year. The responsibility will be ours. I am sorry that the Government did not see its way clear to provide a greater measure of relief for people on the lower salary ranges, because they are the ones who are being hardest hit by the inflation we are experiencing at the present time. As I have said, the permissible, income of those on superannuation is only £3 10s. a week without entitlement to age pension being affected, despite the fact that all their working lives they have contributed to the age pension by way of the taxes they have paid. We are critical of the measure in certain respects, Mr. President, but as we have indicated, we do not intend to oppose it.

Question resolved in the affirmative.

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

page 1433

DEFENCE FORCES RETIREMENT BENEFITS (PENSION INCREASES) BILL 1961

Second Reading

Debate resumed from 20th October (vide page 1347), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator DRURY:
South Australia

– This bill runs parallel to the Superannuation (Pensions Increases’) Bill, about which my colleague, Senator Sandford, has just spoken. Its purpose is to provide for increases in the rates of pension payable under the Defence Forces Retirement

Benefits Act to certain retired members of the permanent defence forces. Pensions under the act are of two classes - those payable directly in respect of the number of units for which the member was contributing at the time, and those payable in respect of the member’s rank and period of service, the amounts being governed by the member’s unit entitlement. I believe, with the rest of the members of the Opposition, that the proposed increases could be greater. Let me refer to the secondreading speech of the Minister for Civil Aviation (Senator Paltridge). He said -

As an indication of the increases provided by the bill, I quote the following examples for the information of honorable senators. Privates at present in receipt of pensions of £155 per annum will receive an increase of £22 per annum; sergeants in receipt of £205 per annum will receive £30; majors in receipt of £505 per annum will receive £60; and colonels in receipt of £855 per annum will receive £110.

We on this side believe that the increases could have been somewhat more generous, but, as was said earlier this evening, we are thankful for small mercies. We believe that the increased payments made under this legislation will be in keeping with the payments made to other pensioners and other classes of superannuated persons. We will not hold the bill up. We will ensure its speedy passage by not opposing it.

Question resolved in the affirmative.

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

page 1434

STATES GRANTS (SPECIAL ASSISTANCE) BILL 1961

Second Reading

Debate resumed from 20th October (vide page 1376), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– This measure proposes the appropriation of about £11,000,000 for the payment of special grants to Western Australia and Tasmania. Western Australia is to receive £6,156,000 and Tasmania is to receive £5,075,000.

The report of the Commonwealth Grants Commission is before the Senate. The submission of a report by the commission is an annual event which is, in my view,, of very great importance. This report contains, as did the others, a mine of informa tion for anybody who is interested in the vastly important subject of Commonwealth and State financial relations. One finds in it an account of what is happening in every State. The trend of the economy of each of the States is shown. There is a mass of statistical information that one may refer to throughout the year. This report has reached the usual very high level of clarity and amplitude.

Since the previous report of the commission was presented, there have been two important changes. First, Sir, Alexander Fitzgerald vacated the office of chairman of the commission on 1st October of last year. His place was taken by Mr. P. D. Phillips, Q.C., of Victoria. I have known Sir Alexander for many years: - for longer than the fifteen year3 that he devoted to the work of the Commonwealth Grants Commission. Through the years, he has given an enormous amount of service to the community, serving in many capacities at the instance of the Government. One cannot but regret his departure from this scene.

During his term of office as chairman I noted that a great deal of flexibility was introduced into the methods adopted by the commission. We who represent the claimant States are grateful for the many reforms that were introduced.. He has passed from this scene, and I should like to put it on record that I regret to see him go and that I wish him well in whatever new sphere of work he enters. I am certain that, whatever that sphere may be, the work that he will do will be of real usefulness to the Australian community.

During his term as chairman there was no change of the central principle on which the commission operates, which is that the claimant States shall be helped to function at a standard not appreciably lower than that at which the standard States function. In other- words, the aim is to have an even spread of services of every kind throughout the Australian community. That is the type of thing that this Parliament applauds and the type of thing that we want to see throughout Australia. The commission has played a major part in preserving the homogeneity of our people by equalizing standards throughout the country.

Sir Alexander was the successor of Professor Mills, another man who rendered distinguished service to the commission and with whom I had a good deal to do from 1944 until he went to the Commonwealth Office of Education and, ultimately and regrettably, died. We have been blessed with a number of very able, very distinguished, very tolerant, very firm and very impartial chairmen of the commission.

Mr. P. D. Phillips is a man whom I have known from the time when 1 went to the University of Melbourne. We went through the law course there together. He was a brilliant student. He had a most distinguished career at the bar and he has a good deal of administrative experience, having been at one time transport commissioner, or its equivalent, in Victoria. I am certain that he will bring to the important task that he has undertaken now all the great qualities of mind and of character that have marked him through the years. I look forward to a continuation of the high standard of work of the commission. I pay tribute to the staff, who spend the years engaged on the tasks of considering the budgets and the accounts of the standard States and of making minute examinations of the budgetary positions and of the economies of the claimant States - Western Australia and Tasmania. lt is good to see the number of claimant States reduced to two. 1 think that the Commonwealth Grants Commission played an important part in helping South Australia to move from the status of a claimant State to that of a standard State. As the Senate knows, until recently the commission, in applying its principles, addressed itself to the comparative positions of three standard Stales - Queensland, Victoria and New South Wales. With South Australia emerging from claimancy, the Commonwealth Treasury, at the instance of the Commonwealth Government, put to the Grants Commission the proposition that the standard should be determined, not on the basis of the budgets of, as hitherto, three standard States, but on the basis of the average budgetary position of four standard States, including South Australia. The question was argued extensively on behalf of the Commonwealth before the commission. The proposition was opposed by the two claimant States.

The commission, having listened to the arguments, traversed the various points in its report and came down on the side of using only two States as a basis for determining the standard for the claimant States. The commission chose the budgets of Victoria and New South Wales and d s.regarded those of Queensland and South Australia. The Commonwealth Treasury and the Government, as the Minister has indicated, are not content with that determination of the commission and in next year’s application will again present their views. The commission came down firmly on the side of its new standard. It determined that the standard should bc a balanced budget and not a deficit budget. It has never yet adopted a surplus budget as a standard, but it is not fixed so firmly in its attitude that it will not keep its mind open to argument.

It cheered me to see the commission, under the chairmanship of Mr. P. D. Philips, standing up so firmly to the Commonwealth Treasury. The Commonwealth Grants Commission is one body that has displayed a great deal of independence in its thought, lt is a body I respect because it states the reasons for its conclusions wi.h great particularity. On this occasion, having made apparently a relatively cursory examination of the other two standard States, whose budgets did not come into the determination of the final standard adopted, it said that it rejected the Commonwealth approach, and stood firmly to its own views. On this occasion it reviewed a number of items that make for disparity between the budgets of the various States. I am looking at the commission’s comments on page 27 where it directs attention to certain elements that did not permit of comparison between the budgets of the claimant States and those of the other States. The commission said that a particular example is provided by some of the expenditure in Western Australia on its north-west, and went on to say -

There is nol, in practical terms, any expenditure in the standard States with which this can be compared.

It dealt with that matter and then went on to point out that the claimant States themselves had a greater per capita demand for loan moneys than had the other States. The commission pointed out that the burden of debt charges accordingly will become progressively more onerous in the claimant States than in the non-claimant States. Then the commission devoted some considerable portion of its report to comparing the differences in the business undertakings in the various States.

The Commonwealth Grants Commission does make a most efficient survey. It is an education for anybody interested in this important field to pick the report up and, not only to read it, but to study it and to return to it. The Opposition supports the bill which appropriates an amount of some fi 1,000,000. We are quite certain that the bill will have the unanimous support, as hitherto, of the representatives of all other States. The commission’s recommendations are invariably accepted. lt deservedly enjoys the confidence of everybody in the Parliament, and on this occasion one can feel that the commission has upheld its own traditions, and its own excellence in the presentation of its recommendations.

I point out that, as for a number of years now, the grants to Western Australia and Tasmania are divided into two parts. The year 1959-60 was the first year in which there were four standard States because in that year South Australia became one of the standard States. It was rather an historic occasion, marking the commencement of a new financial era on the part of the Commonwealth Grants Commission. We of the Opposition appreciate and value the commission, and support the measure which, by way of the first part of the grant gives approximately £1,000,000 to each of the claimant States by way of adjustment for the year 1959-60, and then gives an amount that varies in favour of Western Australia by approximately £1,000,000. The two constituent elements of the grant to each of the States are, in the case of Western Australia, £6,156,000, and in the case of Tasmania, £5,075,000.

Mr. President, 1 feel that with those comments I can leave the bill with the full commendation of the Opposition.

Senator WRIGHT:
Tasmania

. - This bill grants special financial assistance to two States, Western Australia and Tasmania, but it must be considered, I suggest, in the context of the financial relations between the several States of this

Commonwealth. The reason why I feel impelled to speak upon this bill to-night is that I believe it has to be considered in the light of the new situation, as the Commonwealth Grants Commission itself calls it, that developed in the year 1959 in relation to State finances.

For ten years before 1959 the issue was quite open as to whether the States were, on their own authority, to exercise independent rights to raise their own revenues. But it was an ever-fading fight for the States because the Commonwealth maintained the attitude that in certain given contingent circumstances it might be necessary for the Commonwealth to exercise control over the entire revenue that could be raised’ within the Commonwealth. The States were met with the formidable claim that they could not regain a foothold in the battle to pursue the right to independent revenues. We remind ourselves that Victoria actually litigated the matter in the High Court in an attempt to re-establish its right. Victoria and New South Wales were the only States whose governments relished the prospect of again taking the responsibility of raising their own revenues.

However, States renouncing that responsibility ought also to be mindful of the fact that they renounce important and essential rights. I want to state my view that this subject raises the question of the continuance of State parliamentary government in the fullest sense in which we have known it over the 60 years of federation. I urge that it is impossible to maintain a democratic parliamentary system of government without first accepting the responsibility of raising revenue, as well as the responsibility for formulating the policy by which that revenue is raised, and by which it is expended.

Debate interrupted.

page 1436

ADJOURNMENT

Business of the Senate - Communism.

That the Senate do now adjourn.

Senator DITTMER:
Queensland

– As, 1 understand, this is the last week of the life of this Parliament, and 1 hope, very near the last few weeks of this Government, may I say that 1 appreciate the courtesy, tolerance and efficiency displayed by you, Sir, and by the Acting President, the Chairman of Committees and his deputies. As you know, Sir, this is the first time I have risen to speak in the debate on the motion. for the adjournment of the Senate. This is a privilege that we all appreciate and one that we should not abuse. I believe that this week we will have a repetition of what occurred in the last sessional period when we were jammed and slammed into silence because of the Government’s wish to rush the Parliament into recess. Recently, the Leader of the Government in the Senate (Senator Spooner) said that he hoped he could speak without feeling or heat. I think he spoke without ardour or truth. When Senator McKenna made a brilliant analytical approach to the real problem of these end-of-session fiascos, Senator Spooner was not here to answer him. I am not uncharitable enough to say that he dodged the issue because I believe important responsibilities kept him away. He left the issue in Senator Gorton’s hands, but Senator Gorton did not make much of a fis*, of answering Senator McKenna.

If we consider what happened in the last week of the last sessional period, we find that the report of the proceedings in the Senate took up nearly 200 pages of “ Hansard “. The Leader of the Government said that we were filibustering and some honorable senators opposite, including Senator McKellar, said that on unimportant bills, including the Stevedoring Industry Bill, we had wasted time. I was gagged on that bill. When I rose to my feet Senator Gorton stood up and moved “ That the question be now put “. Incidentally, 1 might mention that in this sessional period I saw the Deputy President about participating in the debate on the Estimates and Budget Papers 1961-62 on a Thursday. There were three speakers listed for that day. I am one who tells the truth on. all occasions. In all fairness and in all courtesy, the Deputy President said. “ 1 will put you ahead of them “. I said: “ No. The debate is going on next week, is it not? “ The Deputy President replied, “ Yes “. I said: “ They will have their notes. Being on the Government side, they have a bad case and they will need notes. Next week will do me.”. The staff of the Senate searched the records back as far as 1920 and found that the gag had never been applied in a debate on the Estimates and Budget Papers. So I said, “ Forget about the rest of the time because I was not born then ‘. But I was denied an opportunity to participate in the debate.

What will happen this week? It is clear that there will be a repetition of what happened in the last week of the last sessional period. The Government expects the Senate to rise at 5 o’clock on Thursday afternoon, irrespective of the important bills affecting Queensland and Western Australia, such as the Queensland Grant (Beef Cattle Roads) Bill, the Western Australia Grant (Beef Cattle Roads) Bill, and the Railway Agreement (Queensland) Bill which relates to the Mount lsa railway and for which the Government’s case is not very good.

On the last day of the last sessional period eleven important bills were dealt with. Only ten minutes was allowed for the secondreading debate of a bill involving £57,000.000, and only ten minutes was allowed for the committee stage. Under the Supply Bill, the proposed expenditure ‘of hundreds of millions of pounds was dealt with in five minutes for the second-reading debate and three minutes for the committee stage. Then came the Commonwealth Serum Laboratories Bill, about the fate of which the Government was frightened. The Minister in charge of that bill, Senator Henty, fixed a time limit for its consideration. The Leader of the Opposition (Senator McKenna) spoke for an hour, as he was entitled to do; Senator Scott got up to waste time; and then I was gagged again. I have been Ned Kelly-ed and Ben Hall-ed so often here that I have got used to being gagged; but this is one occasion when that cannot be done to me.

Senator Kendall:

– If you do not like it, why do you not go home?

Senator DITTMER:

– I do like it. I have a responsibility to my electors and I carry ii out so efficiently that they do not want me to go home; they want me to stay here and tell the story. I do not propose to go right through the story, but if any one wants to read it, it is in these copies of “ Hansard “ which I have here. I have the relevant pages marked and I have the bills here. Senator McKenna told the story of what had happened. As I said, I am not going to say that the Leader of the Government was not game to be here. He said that he was going to deal with the question without feeling or heat. That was the story he told. What did he do? He called the members of the Opposition lazy and incompetent. I will not refer to individual members of the Cabinet, but if ever there was a lazy, incompetent, irresponsible and incorrigible Cabinet it is the present one that will face the people at the coming election.

Do not take my word for what has happened. Let me read the story as recounted in a leading article in the press -

The Federal Government has given the nation an exhibition of arrogant contempt of the functions of the Senate as a legislative body and “ chamber of review “.

Yet the Leader of the Government in the Senate is wrapped up with the prestige of the Senate, as he claims so often and so repeatedly to the people and in this Senate. The article continues -

By keeping it sitting for 23£ hours with only a short break for breakfast it forced the passage of eleven Bills.

Two of them at least were of major importance. Evidently, the other bills which involved hundreds of millions of pounds were not important. The article goes on -

One was the Bill to provide long-service leave for waterside workers, subject to penalties for unauthorized stoppages of work.

That is the bill to which Senator McKellar and other supporters of the Government referred as being of no importance. The article continues -

The other was the Bill to put business men in control of the Commonwealth Serum Laboratories.

Exhausted after an all-night sitting in which they had disposed of most of the other Bills, weary senators . . . were “ whipped “ back into the chamber after breakfast to consider and “ review “ the Government’s highly controversial proposals for putting the serum laboratories under new management. They were presented with this lime-table: For second reading debate, one hour five -minutes-

That was only for that particular bill. The Government was extraordinarily liberal in relation to its performance on the previous two days. As I mentioned, the Government allowed ten minutes for the secondreading debate and ten minutes for the committee stage of a bill involving £57,000,000; and five and three minutes respectively were sufficient for bills involving hundreds of millions of pounds. The article goes on -

  1. . for examining in committee all details of the Bill, one-and-a-quarter hours; for the third reading, five minutes.

The Government had no excuse for making such a travesty of parliamentary deliberation. It could have given Senators an adjournment and allowed them to resume debate the following day after a night’s rest or even next week.

The Leader of the Opposition pleaded repeatedly for that, but his plea fell on deaf ears. I suggest that if the members of the Government ever have a sense of inadequacy in regard to their hearing they should consult me. The article continues -

Or it could have held the Bill over Parliament’s winter recess. There was no urgency for it. That had been admitted.

The Government’s haste to send members to their recess would suggest that it has no stomach just now for taking more criticism of its financial policy in either House. But it has lowered its credit by putting the convenience of Ministers-

The convenience of Ministers is being considered now. I believe that one Minister in particular will be extremely grateful when the Senate adjourns - . . before tthe people’s right to have all projected legislation fully considered and thoroughly debated by both houses of their elected Federal Parliament.

I have not been reading from a Labour newspaper. This newspaper happens to be the “ Courier-Mail “, which is very much opposed to the Labour Party and all its policies. At least in that leading article it showed a sense of responsibility.

This week we are to have a repetition of this procedure. I say quite frankly that I intend to speak on the Queensland Grant (Beef Cattle Roads) Bill. The proposal in that bill is purely a pre-election issue which has been determined now at long last after the Government has been criticized for years for having done nothing about it. It is merely picking up now a proposal which was contained in a bill which the then Prime Minister, Mr. Chifley, introduced in October, 1949, to encourage beef cattle production. The Government is going to take advantage of that proposal. It is also going ahead with the Mount Isa railway project which has been under consideration since 1955. We will be asked to debate those bills this week. Is it not sickening that the people should be treated in this way? It is no wonder that they regard this way of treating legislation as a travesty of parliamentary deliberation and regard the Government as being completely irresponsible.

How far can the Government go and still get away with it? That will be the question. Smearing people will not be the answer, irrespective of the electoral candidates who are nominated. We have read about that happening in the other place and it has been headlined in newspapers including the conservative newspaper, the Melbourne “ Age “. The Government has been taken to task, and rightly so. If Government supporters want to challenge a man, they should produce the evidence. I do not mind if they have anything against me or if they have evidence against any other candidate. They have the advantage of parliamentary privilege. Why do they not produce the evidence? They call people Communists or smear them as fellow travellers. If they have evidence, there is nothing to stop them from producing it. But they do not produce it. They nonchalantly say, “ He is a Com. or a fellow traveller “. They have been getting away with it now for twelve years. Surely they cannot get away with it much longer, in view of the fairness of Australians. However, I think that they are hoping to get away with it again, with the backing of certain newspapers.

But you, Mr. Leader of the Government, if I may so address you in my humility, with due appreciation of your extraordinarily smooth qualities, cannot get away with this. You will not get away with it on this occasion. I have read what the “ Courier-Mail “ printed on 19th May, 1961. I have referred to passages in “ Hansard “. Having read “ Hansard “, or not having read it, the Leader of the

Government came into the Senate and said that Opposition senators were lazy and incompetent.

Senator Kendall:

– That is right.

Senator DITTMER:

– What was that?

Sennator Hannaford. - I did not say it.

Senator DITTMER:

– You said it, Little Sir Echo.

Senator Vincent:

– You do not talk very much sense, anyway.

Senator DITTMER:

– Give me a break on this one, because I am incensed about it! I have not previously risen on the motion for the adjournment since I have been here. On the other hand, I am one of the most tolerant members of this chamber; every one knows that. I do not mind a scrap at any time; I will fight my way out. On the other hand, I will not cop things that are not truthful or not fair. On one occasion - I am sorry that the Leader of the Government was absent - I said that a statement by him was callously and deliberately untrue, but none of his supporters was game to get up and deny it.

Senator Wright:

– Who said it?

Senator DITTMER:

– I said it. It is in “ Hansard “. Go and read it.

Senator Wright:

– Whose statement was deliberately untrue?

Senator DITTMER:

– The Leader of the Government made a statement which was callously and deliberately untrue, and my allegation was not denied by any one. It is in “ Hansard “; go and read it. I made that statement, and not one of his supporters was loyal enough to him, not one had sufficient, sincere appreciation of his extraordinary qualities, to get up and deny it.

That is the story. We are to experience a similar phenomenon this week. I understand that the Leader has determined that the Senate will rise at 5.30 p.m. on Thursday.

Senator Kendall:

– Nobody has said anything about it yet.

The PRESIDENT:

– Order! Interjections must cease. Senator Dittmer disapproves ot interjections.

Senator DITTMER:

– 1 am grateful. This ls one of my last speeches this session, but I shall be back next year, irrespective of the desires of honorable senators opposite. I say this in appreciation of the tolerance Bf Queensland electors.

Those were the thoughts that I had in mind. I wanted to register them now. I know that this week will see a repetition of what happened at the end of the last sessional period.. J thought that the best thing I could do was to quote the leading article in the “ Courier Mail “. I hope that on this occasion we shall not be told that irrespective of the number of persons who want to speak, some one will have to drop out. As I mentioned earlier, this year for the first occasion since 1920 a budget debate was gagged, to put it crudely. When a Government supporter was speaking on th3 Budget, I said to myself, “ Other Government supporters have their notes. The debate will continue next week. They are anxious to speak.” 1 appreciated their approach. Since 1920 a budget debate had not been gagged, and one probably had not been gagged earlier. We have to get to this arrogant, intolerant, irresponsible, lazy and incompetent Government. 1 am not going to talk about individual members of the Cabinet. I think most of them are decent, but collectively, as an instrumentality, they are impossible.

Senator HANNAN:
Victoria

– I gathered in passing that Senator Dittmer does not like the Government. Because I regard industrial relations as of cardinal importance, on 12th October in this chamber I directed attention to a speech made by the Deputy Leader of the Opposition (Senator Kennelly) on 2nd May on the Stevedoring Industry Bill 1961, which provided long service leave for waterside workers.

Senator Hendrickson:

– Call in the security police to get rid of the Corns under the seats.

Senator HANNAN:

– It is starting to hurt, and I have only just begun. In that speech the honorable senator said that if he were a waterside worker he would vote for Healy. I refer to page 1098 of “ Hansard “ for 17th May. Senator Kennelly said -

Listen, if I walked on to the waterfront to-morrow - 1 know what I am saying - I would vote for Healy. Why would 1 vote for Healy? I would vote for him because I would think that he would get the best wages and conditions for the labour that I have to sell. That is the only thing that matters.

That statement was made by the honorable senator when a ballot in the Waterside Workers Federation was pending. The reason why I say something on this matter to-night is that last Saturday’s press carried a story to the effect that the State Labour executive of Victoria had exonerated the honorable senator in relation to any ill favour into which he may have fallen as a result of that statement. The Melbourne “ Sun-News Pictorial “ stated -

The State A.L.P. secretary, Mr. Wyndham, said the executive was satisfied that certain statements made by Senator Kennelly had been misreported by the press and subsequently misconstrued.

But what did the press say? The Melbourne “ Sun-News Pictorial “ on 18th May carried a very fair statement of what the honorable senator said, under the heading -

I’d vote for this Red - A.L.P. Senator.

The Melbourne “ Age “ carried a similar statement, headed -

Labour Senator Backs Communist.

Both newspapers went on to give the substance of what the Deputy Leader of the Opposition had said.

On the night of the same day, 12th October, Senator Kennelly made in this chamber a statement in which he referred to my question and purported to explain what he had said. He quoted his contentious statement, leaving out the parenthetical clause -

I know what I am saying.

That clause was a clear indication that he was making the statement deliberately and with some care. On 1 2th October he said that I was making cheap political capital out of the statement. I think I can assure him that the word “ cheap “ is inaccurate. He admitted making the statement. He did not claim that the press had misreported him. He pointed out that at the time he had made the statement an election contest was going on between Healy and Alford. He said that he knew them both and that he preferred Healy because of his greater ability as a union leader.

Senator Ormonde:

– He did not say that at all.

Senator HANNAN:

– Yes, he did. I refer you to ‘’ Hansard “.

Senator Gorton:

– Read it to him.

Senator HANNAN:

– I do not want to take up time unnecessarily. On 12th October, he said -

At that time an election for the federal secretaryship of the Waterside Workers Federation was being held. There were two candidates, namely, Mr. G. Alford and the late Mr. J. Healy, neither of whom was a member of the Australian Labour Parly. 1 did not say that 1 would vote for Healy because he was a Communist. My only purpose in making the statement I made was to indicate that I could readily understand why a waterside worker would vote for Healy, despite his membership of the Communist Party, because of his ability as an industrial advocate. During the many years in which I have been connected with politics, ] have had occasion to meet both of the candidates many times. When I spoke on 17th May I considered, and I do now consider, that the late Mr. J. Healy because of his greater ability and his many years of advocacy of the claims of members of the Waterside Workers Federation, would have served his members better than his opponent would have served them.

Nobody in his right mind believes that Senator Kennelly is a Communist or even that he has Communist sympathies. I do not believe that for one moment, but I believe that his statement gave the greatest possible lift to the Communists in that election and no Communist could have done more. Heaven knows how many votes that statement won for Healy in the election. Let us consider Healy’s position. He had no election issue. The Government was granting long-service leave to waterside workers. It was not doing that under Communist duress but because it thought that it was a desirable social measure. Healy had a poor record of achievement, including a list of unsuccessful strikes, resulting in empty pay packets. If the Communists subscribe to a heaven, the statement of the Deputy Leader of the Opposition was manna from heaven. The Communistcontrolled “ Maritime Worker “ of 24th May, 1961, rejoiced in Senator Kennelly’s statement. Just above a cosy little item stating that a cabaret would be held to aid the defence of nine Sydney wharfies arrested in the “ Hands off Cuba “ demonstration appeared an article under the heading “ ‘ I’d Vote for Healy ‘ says Labour Senator”. The “Maritime Worker” rejoices in the fact that that slogan was good for Healy. With the election several months away Senator Kennelly made that statement deliberately. He said, “ 1 know what I am saying “.

Senator Hendrickson:

– I rise to order! The election of officers of the Waterside Workers Federation was not several months away. Senator Hannan should be correct in his statements. He said that the election with several months away.

The PRESIDENT:

– Order! The point of order is not upheld.

Senator HANNAN:

– In case Senator Hendrickson did not hear me correctly, I said that the election - obviously the federal election - was several months away and that Senator Kennelly could afford to be bold and courageous. He was being defiant on this 17th May. He was a veritable Ajax, defying the lightning, heaping scorn and contumely on the ranks of Tuscany in the persons of Government senators. He said, “ I’d vote for Healy “. He knew what he was saying. When he realized the full implication of his statement and the catastrophe that must follow if the people of Australia became aware that the Deputy Leader of the Opposition in this chamber held views of that nature, there was an attempt to duck-shove. The Deputy Leader is over 21 years of age. His words must be given their natural meaning.

Senator Cooke:

– I rise to order! Is the term “ duck-shove “ parliamentary language?

Senator HANNAN:

– I withdraw the word “ duck “.

The PRESIDENT:

– Order! What is your point of order, Senator Cooke?

Senator Cooke:

– I want to know whether the term “ duck-shove “ is parliamentary language.

The PRESIDENT:

– Order! I did not hear the words used. In any event, the point of order is not upheld.

Senator HANNAN:

– The Deputy Leader of the Opposition is over 21 years of age and he must be presumed to give to words their plain and natural meaning. The secretary of his party in Victoria claimed that Senator Kennelly was not reprimanded because he was misreported and his words were misconstrued. I do not think that is characteristic of the Deputy Leader of the Opposition, because of all things he is not a coward. That is a cowardly evasion and a cowardly attempt to put the blame for his statement on some reporter. It is an attempt to avoid the impact of what he had said deliberately and carefully. He wants to put the blame on somebody else. When Government supporters give date, time, place, chapter and verse of Labour’s association with Communists and communism the Opposition sums up those allegations as smearing, McCarthyism, Fascism or red-baiting. Those words are simply substitutes for thought.

I challenge Senator Kennelly’s implied thesis and the corrupting theory that lies behind it that Communists make better trade union secretaries than other people. I challenge the theory that they obtain better gains for their members. I challenge the Deputy Leader of the Opposition to point to one Communist-controlled union that has made gains in the past few years as good as, for example, those made by the anti-Communist Federated Clerks Union or the Federated Ironworkers Association of Australia. Those unions have shown that a proper application to industrial matters is far better than the Communist subversion practised by the man supported by Senator Kennelly. 1 take it that when Senator Kennelly said that he knew both Alford and Healy he also knew Healy’s record. It may be worth while looking at Healy’s record - a record with which the honorable senator must have been acquainted when he said that he would vote for him. In 1936 Healy joined the Communist Party and became secretary and boss of the Waterside Workers Federation. In 1943 the members of Healy’s union were refusing duty and delaying the departure of essential cargoes to our troops in New Guinea. The Prime Minister of the day referred to those acts as treachery. Who was the Prime Minister then? It was John Curtin. Under Prime Minister Chifley in 1949 the Arbitration Court sentenced Healy to twelve months’ gaol with light labour. In 1951, under the present Government, Healy was convicted and fined for further industrial breaches. Between 1946 and 1949 Healy’s union activities did incalculable harm to the Australian economy and imposed untold hardships upon Australian citizens, in particular the Australian housewife. Between 1950 and 1958 on three occasions Healy’s union was responsible for nation-wide crippling and wage-losing strikes. Those strikes were pulled by Senator Kennelly’s candidate. In 1957 in a television interview on station TCN9 Healy was challenged to say where his loyalties would lie in the event of hostilities between Australia and Russia. He refused to answer. In May, 1959, Healy attended in Tokyo the All Pacific and Asian Dockworkers Conference. That was a Communist stunt organized to co-ordinate arrangements for the most effective disrupting of the maritime transport of the free nations. The conference was called by Harry Bridges, the American Communist, who referred to it as “ an important step towards putting into action the unions’ long-standing programme of co-operating with other waterfront labour organizations throughout the world “. Translated into plain and unequivocal language that simply means preparation for sabotage. The British International Transport Workers Federation banned the conference and would not allow its members to attend. In 1961 Healy led the fight against long-service leave for waterside workers - the most successful piece of industrial legislation that has been passed in this country for very many years. That legislation has brought peace and order to the waterfront. It has reduced the number of man-hours lost from approximately 50,000 to 2,000 a month. It has restored discipline where once there was anarchy. That is the’ legislation which Senator Kennelly’s candidate was prepared to oppose. On 25th January, 1956, under a heading “ Healy: Boss of the Waterfront “ the Sydney “ Daily Telegraph “ reported -

Since midnight last Sunday a coast-to-coast general strike has paralysed the Australian waterfront.

The families of 25.000 waterside workers are faced with what may turn out to be a long, exhausting struggle resulting in empty pockets and empty larders.

The strike cost to the nation in delayed freights, overseas ill-will, and hundreds of other tangible and intangible losses is anyone’s guess.

In the forefront of the fight between stevedores and shipowners is James Healy, general secretary of the Waterside Workers Federation . . . the man who led the wharfies into the strike.

Later the correspondent, McLeod. put a question to Healy. The article continues -

I asked him if the waterfront strike was one of a series of Communist-planned rolling strikes designed to wreck the Arbitration Court and to embarrass the Prime Minister (Mr. Menzies). Healy grinned, rubbed his hand over his hair, and said: “ Someone thinks up these plans. I don’t know who.”

Later, in May, 1958, when another of these abortive strikes was in progress in Sydney, the “ Daily Telegraph “ published an article headed “ Big Jim Healy, waterfront czar, battling for survival “. It reads -

Podgy Communist waterfront czar Jim Healy is battling to survive.

His worst enemy is himself, or rather his record.

It is this aspect of the matter to which I wish to direct Senator Kennelly’s attention - Healy’s record of industrial ineptitude. The article continues -

His record shows he has not only butchered the shipowners but also his own members’ jobs.

Twice the “ boys “ have been out on strike recently.

Twice they have loyally lost work and wages to fight a cause which their Communist leadership has told them was vital.

Twice they have gone back to work with nothing gained except wages lost and further business gone from the declining Australian coastal shipping trade.

What is going on in waterfront politics currently deserves to be studied.

It is a talc of double-crossing, conspiracies, and bashings.

Senator Willesee:

– I rise to a point of order. I am sure you will agree, Mr. President, that it is pretty obvious that for the last twenty minutes this gentleman has been reading his speech. You know that the particular standing order which deals with the reading of speeches is designed to prevent the reading of extracts from documents handed to honorable senators by people outside the Parliament.

Senator Gorton:

– I don’t think you like this speech much.

Senator Willesee:

– lt is not a case of not liking it. It is a matter of there being in existence a standing order which was specifically designed to stop people from giving honorable senators briefs to read in this place. I do not think we could be charitable enough, Mr. President, to say that the honorable senator has been quoting from copious notes for the last twenty minutes. I ask you to rule, in the terms of the relevant standing order, that Senator Hannan must not read his speech.

The PRESIDENT:

– Order! As far as I have been able to follow him, Senator

Hannan has been speaking from copious notes. The point or order is not upheld.

Senator HANNAN:

– I was referring to an extract from the “ Sunday Telegraph “’ of 18th May, 1958. I was quoting an article written by Alan Reid. That article continues -

If it appeared in an American dime magazine it would be dismissed as exaggeration.

The Communists, feeling a bit hard pressed - even wharflaborers steeped in a tradition of bosshating like to eat and to draw sufficient wages for their wives to meet household bills, timepayments, and the like - got in the first hit.

I think I have said enough, Mr. President, to indicate that the candidate for the Waterside Workers Federation election who was supported by Senator Kennelly not only was a Communist, not only was described by a Labour Prime Minister as being treacherous to the nation when it was involved in a life and death struggle, not only was politically insincere, unreliable and untrustworthy, and not only held political beliefs which were repugnant to all Australians. I have shown also that from an industrial point of view he gained nothing for his union but involved his members in tremendous losses. All in all, it is very difficult to imagine any one who would have made a worse secretary of the Waterside Workers Federation, from the point of view of the true welfare of its members, than the candidate whom Senator Kennelly was supporting.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I listened to Senator Hannan’s utterance just now with very great care. Senator .Kennelly had left the Senate to-night before I was notified, at ten minutes past ten, that Senator Hannan contemplated making these remarks. I do not think Senator Kennelly will mind my deputizing for him on this occasion. During his speech, Senator Hannan was good enough to announce his belief that Senator Kennelly was not a Communist, a fellowtraveller or a Communist sympathizer. But he devoted the rest of his speech to endeavouring to denigrate Senator Kennelly because of an utterance which, by any fair interpretation, was unpremeditated and was not intended to convey ibo meaning that has been put upon it. If any’ one looks at the “ Hansard “ report Tor the day in question, he will find that Senator

Kennelly’s reference was preceded by a mass of interjections on the Government side.

Senator Vincent:

– But he repeated it at a subsequent stage.

Senator McKENNA:

– Let me make my reply. There was a mass of interjections - from Senator Vincent, who has just interjected, Senator Wright and Senator Hannaford. If honorable senators look at the “ Hansard “ report at the page quoted by Senator Hannan they will find that there was a barrage of interjections.

Senator Hannaford:

– Did you mention my name?

Senator McKENNA:

– I did mention your name.

Senator Hannaford:

– I did not think I ever interjected.

Senator McKENNA:

– AH I can say is that the honorable senator is suffering from loss of memory. He will find his name printed at page 1098. In fact, it was an interjection by the honorable senator which immediately precipitated Senator Kennelly’s utterance. Let us look at it in that context. There was a barrage of interjections. Senator Kennelly was in his customary happy form. It is clear that he spoke without premeditation. All those who listened to him on 22nd November, I960, when he was speaking to the Conciliation and Arbitration Bill (No. 2), would have heard him say, when there were no interruptions and when he was speaking after due thought -

I believe that the unions are wrong in electing Healy and the other Communists.

Will Senator Hannan please note this? I invite the honorable senator to contemplate why he did not have this statement in his mind when he was speaking just now. I am quoting from the “ Hansard “ report of 23rd November, 1960, at page 1751. Senator Kennelly said then -

I believe that the unions are wrong in electing Healy and the other Communists. I would not vote for those men if I were in those groups.

That was a fully considered statement. It was made unharried and at a time when he was not having, as he does in his own happy way on occasions, a bit of a parley with Government senators. Senator Kennelly spoke recently against the background of that considered statement.

Senator Vincent:

– You are suggesting that bc did not mean it?

Senator McKENNA:

– I am suggesting that a meaning was placed on it that he never intended to attribute to it. He spoke utterly without premeditation, and 1 believe that every body in this place now knows that Senator Kennelly meant no more than that he could understand the state of mind of a man who would walk on to the wharf the next day and, knowing the two candidates, would vote for Healy as the better industrialist. He was not saying that he would vote for Healy. It is a complete lack of ordinary charity, as I understand it, to take advantage of a man who speaks without premeditation and to ignore - this is the important aspect of it - a statement that was his considered opinion and which I say Senator Hannan thoroughly understands to be his true view. I cannot help commenting upon the meanness of taking advantage of what was an obvious slip. Whether it be for political purposes or for personal purposes it earns my contempt.

I say further to Senator Hannan that when, on Thursday, 12th October, as an aside in the course of a lengthy question delivered very quickly, he adverted to this matter, he did not quote Senator Kennelly correctly. The relevant words from Senator Kennelly’s speech were, “ If I walked on to the waterfront to-morrow - I know what I am saying - I would vote for Healy “. Those are the exact words. Now, what did Senator Hannan attribute to Senator Kennelly in a glancing statement in the course of the question to which I have referred? He said, and it is in inverted commas in “ Hansard “, showing that Senator Hannan purported to quote exactly, “ If I were a waterside worker I would vote for the Communist, Healy “. That is wrong. It is a deliberate distortion. It brings right in, without the slightest justification, the’ element for which the honorable senator has been contending.

When one looks at Senator Kennelly’s remarks on that occasion one must remember that he pin-pointed his statement to the following day, to to-morrow. One must also remember that there was then current an election involving a contest between a Communist and a member of a party other than the Australian Labour Party. He was dealing with the circumstances of the moment. 1 think that everybody in this chamber concurs in Senator Hannan’s statement to-night, that Senator Kennelly is neither a Communist nor a Communist sympathizer. He has himself averred that in terms that were unmistakable. In addition, we have the acknowledgment from Senator Hannan. Why take advantage of what was a slip of the tongue? We all in this place understand that Senator Kennelly sometimes has difficulty in expressing himself. I think we ought to advert to that fact and not take advantage of a mere slip, of a word spoken in pleasantry, in banter and in barney, in the course of a lot of interjections. To seek to elevate it to an undue position and to denigrate a man who has given a lifetime of service to his party is, I say quite frankly, a shocking thing.

I do not want to express myself too strongly in the matter. I hope that after wc have had this discussion to-night, at least in this place - whatever may be done for political purposes elsewhere - we shall not again blacken one of our colleagues. Let us not take a mean advantage of him. Let us have a little Christian charity in this place. However hard we fight outside and however hard we fight here, let us leave personalities out of our deliberations. Senator Hannan’s long dissertation to-night was a story about communism, of the history of Healy, and the rest. We will join with him in any attack that he likes to make on communism, but do not hang it around the neck of a senator whose true views are quite clearly known, and not only clearly known but recorded plainly when he was addressing himself, without interruption, to this particular matter.

I hope that that will be the attitude, at least in this place, from now on. Senator Kennelly was obliged to speak on Thursday night, after Senator Hannan’s misquotation of his utterance on Thursday morning.

Senator Hannan:

– It is the substance of what he said. One cannot pronounce inverted commas.

Senator McKENNA:

– -No. There was the word “ Communist “ injected by Senator Hannan. It was never used by Senator Kennelly, even under the duress of the moment. Its use gives to the whole matter an entirely different connotation. I do not suppose Senator Kennelly would have dealt with the matter as calmly or as gently as I have, but I hope I have said enough to indicate that I do not think much of this type of performance. I hope very sincerely that we do not have any more of it.

Senator GORTON:
Minister for the Navy · Victoria · LP

– I would like to say a few words-

Senator Hendrickson:

– Hitler No. 2.

The PRESIDENT:

– Order! Senator Hendrickson, you will withdraw that remark.

Senator Hendrickson:

– I thought I was praising the Minister when I said that.

The PRESIDENT:

– Order! You will withdraw the remark.

Senator Hendrickson:

– I withdraw it.

Senator GORTON:

– I think that Senator Hannan should not, in any circumstances in the history of this matter, be subjected to an accusation of meanness by the Leader of the Opposition (Senator McKenna) or, by interjection from some of those sitting behind him, of smearing. There is very little of fact in dispute in this matter. One of the facts which is not in dispute is that Senator Hannan has made it quite clear to the Senate that he has not accused and does not accuse Senator Kennelly of being a Communist or a fellow traveller. That is admitted by the Leader of the Opposition. In my view, that should completely exonerate Senator Hannan of accusations of baseless smearing in this matter. Senator Hannan has a duty to express his opinions and his views as to the sayings of senators in this place. He has expressed those opinions.

Senator Willesee:

– You are inviting something if you start that.

Senator GORTON:

– If you do not express your opinions or your views you are not doing your duty. I want to say, Sir, that Senator Hannan, in expressing opinions and views has always - and here again, I join issue with what I consider to be an unjustified attack by the Leader of the Opposition - expressed opinions and views of the ideas and propositions put forward by members of the Opposition and not of them personally. I do not believe that honorable senators opposite can point to any personal attack on individual senators.

Senator Hendrickson:

– It is filthy smearing and you know it.

Senator GORTON:

– If it is regarded as smearing, as Senator Hendrickson suggests, and if it is contended that proposals and ideas should not be attacked, then we are getting fairly close to the kind of totalitarian attitude that Senator Hendrickson claims he does not like.

Senator Hannan should not have been accused of personal attacks. He should not have been accused of meanness. He has a perfect right to quote what an honorable senator opposite says.

Senator Willesee:

– Truthfully.

Senator GORTON:

– Truthfully, which he has done. He has been attacked on the basis of a quibble. It is said that whereas Senator Kennelly stated, “ If I walked on to the waterfront to-morrow I would vote for Healy “, Senator Hannan quoted his words as, “ If I walked on to the waterfront to-morrow I would vote for the Communist Healy “. Everybody knows that Healy was a Communist. Surely Senator Hannan’s quotation was as close to the truth as can usually be attained. I am sure that Senator Hannan was attacked for that by the Leader of the Opposition without being given notice that the attack would take place. The point of Senator Hannan’s remarks was that he believed that the words he referred to were those of a man whom he exonerates from being a Communist, made in this Senate and recorded in “ Hansard “, and that, whether made without being meant to bc made or not, they were of assistance to the Communist faction in the Waterside Workers Federation and were used by that faction in the federation to advance its views. If that was so, I believe he had a perfect right to draw attention to it. Having exonerated the Deputy Leader of the Opposition from being a Communist and having avoided personalities, he cannot properly be subjected to attack on the ground that he dragged in personalities and indulged in smearing or meanness. I do not think that he should have been so attacked.

Senator McMANUS:
Victoria

.- I ri- e to refer to an entirely different matter. I may say that I am heartened by the pro tests that I have heard from this side of the House against smearing, against untruths and against cowardly attacks on people who are not present. When I hear such statements I cannot help thinking sometimes of the saying that he who is without sin should cast the first stone.

Senator Hendrickson:

– Hear, hear!

Senator McMANUS:

– I do not think Senator Hendrickson understood my point. In the press last week I noticed a reference to the throwing of garbage cans in another place. According to the press reports, in the course of discussion in that place it was stated that certain circulars issued in Melbourne regarding Mr. Cohen, Q.C.-

Senator Ormonde:

– This is really election week, isn’t it?

Senator McMANUS:

– It is all right for you to say thee things but apparently it is not all light for me to deny them. The statement was made that certain circulars that had been issued in Melbourne regarding Mr. Cohen, Q.C, derived from the Democratic Labour Party. That statement had been made previously, and I pointed out that no proof had been offered. I stated the truth of the matter, which is that the D.L.P. has not been associated with those circulars in any way at all. Neither I nor any of my supporters has been associated with them. It is well known in Melbourne, as Senator Hendrickson could ascertain by a single visit to the Trades Hall there, that the people sponsoring and i. suing the circulars are persons whose associations are solely with the Au’tralian Labour Party.

Senator Hendrickson:

– Who are they?

Senator McMANUS:

– Every dog at the Trades Hall is barking the names.

Senator Hendrickson:

– Then name them.

Senator McMANUS:

– Do you think I am an informer? One .person, however, was named. It was said that Mr. Oscar Rosenbess, the vice-president of the Motor Transport Workers Union and well known as a delegate to the Trades Hall Council, was a member of the D.L.P. and was responsible for the circulars. Everybody in Melbourne who is associated with the trade union movement knows Mr. Rosenbess well. He is a former member of the Polish Bund, a Jewish socialist party. He is such a confirmed socialist that he has formed his own socialist organization in Melbourne. He could not be a member of the D.L.P., because the D.L.P. is opposed to monopolies of all sorts, including socialism.

When the split in the Labour Party occurred as a result of which the D.L.P. was formed, Mr. Rosenbess was made by the A.L.P. a member of a new Australian committee, formed to induce new Australians to stay with the A.L.P. and not to join the D.L.P. Mr. Calwell must have known that, because he was the per.on most active in getting together the new Australian committee of which Mr. Rosenbess was a member. Now, however, Mr. Calwell, with no evidence at all, describes as a member of a party which is entirely opposed to socialism, a man who, in Europe and in Australia, has been notable for his service to socialism. Mr. Rosenbess is not a member of the D.L.P., has never been a member of the D.L.P. and is opposed to the D.L.P. I regret that Mr. Calwell should have done what he did in order to establish a link between the D.L.P. and these circulars, and to make out that there is a plot. lt seems to me that there is an occupational danger in being the leader of the A.L.P. to-day. If you are the leader, you are allergic to plots! I say that the persons responsible for these circulars are associated with the A.L.P.

Sena:or Hendrickson. - Who are they?

Senator McMANUS:

– Let me give you again a tip which 1 gave the other night. These circulars are being sent to the addresses of A.L.P. branch secretaries. In the last two or three years, only three or four people at the most would have had access to the list of addresses of those banch secretaries. Therefore, whoever is sending out these circulars is somebody who has been a top-ranking man in your party in Victoria during the last three years, lt would not take the newest police recruit a half-second to work out who he is.

Senator Hendrickson:

– You said you knew, but now you say that you do not know.

Senator McMANUS:

– Senator Hendrickson likes to say that he does not know, but he does in fact know, as well as anybody else who goes into the Trades Hall, the people responsible for these circulars. I ask the A.L.P. to please leave the D.L.P. out of its faction fights. Battle them out amongst yourselves. Do not drag us into your private brawls. We have troubles of our own. Please, I implore you, leave us alone.

The amazing situation has arisen that I have been accused of being responsible for the circulars against Mr. Cohen and, in the same week, Mr. Cohen’s people have issued a circular claiming that I am a witness on their behalf. They say in their circular that I am a witness to the fact that the Jewish Council against Fascism and anti-Semitism had never been banned. It is a matter of what you regard as a ban. I remember the circumstances very well. I was then the assistant secretary of the Victorian branch of the Labour Party, and I kept the minutes. I still have the minutes for 30 or 40 years back.

Senator O’Byrne:

– I would not brag about that.

Senator McMANUS:

– I invite you to take legal action at any time you like to get them back. The Jewish Council against Fascism and Anti-Semitism, of which Mr. Cohen is the president, had been sending out letters, using the names of a large number of people - some prominent in the Labour Party and some otherwise - without their consent. The letters asked A.L.P. branches to receive speakers. Some of the branches had been deceived by the use of those names and had agreed to receive speakers. 1 am not saying that all of the members of this council are Communists, but 1 do say that that is a well-known. Communist trick. We took action then and we carried a motion. The gentleman who is now Judge Fraser proposed it, and Mr. Lovegrove, who is now the deputy leader of the A.L.P. in the Victorian Parliament, seconded it. The motion, which was supported also by the late Percy Clarey, was that we should refuse to allow those people to visit A.L.P. branches without the consent of the executive - and it was very clearly understood that they would not get that consent. We were perfectly satisfied they were a united front organization.

Senator Hendrickson:

– They were never banned.

Senator McMANUS:

– If you tell people that you do not permit them in any circumstances to come into your house, that sounds to me like a ban.

In Melbourne the Jewish people allow each Jewish organization to send delegates to a central body - the Jewish Board of Deputies. The chairman in those days was Mr. Ashkanasy, a member of the Australian Labour Party. No one would say that Mr. Ashkanasy was a red baiter. He is an eminent Queen’s Counsel who would not take any action unless he weighed all the evidence. Mr. Ashkanasy’s organization, the Jewish Board of Deputies, expelled the Jewish Council against Fascism and AntiSemitism on the ground that it was a Communist front. That is good enough for me. The members of the board would know. Even if the Australian Labour Party did not know, the Jewish Board of Deputies would know.

I can say only that I hope that Mr. Cohen’s organization will cease claiming me as a witness on its side. As I said before, I do not want to be in this. I appeal again: Please leave us out of your private brawls, we have troubles enough of our own.

Senator AYLETT:
Tasmania

.- As charges and accusations have been made by members of the parties on the Government side, with no substantial evidence to support them, I think it is time that we showed a little common sense. First, in respect of those who are not here to defend themselves, and cannot defend themselves, it would be a good idea to let them rest. Secondly, those who are living and are not here to defend themselves will be here to defend themselves later against what some people had to say about them. Neverthe less, I think it is the duty of those whoare here to get up and state a few facts in order to put some of the Government supporters on the right track.

Senator Hannan:

– That will be a new development.

Senator AYLETT:

– It would be if it were coming from you, I can assure you, after listening to your speech to-night.

The matter to which I want to refer originated earlier, and concerns Dr. Max Poulter, who has been accused of being a Com. or a fellow traveller by one of the highest Ministers of the present Government. That responsible Minister, the Treasurer (Mr. Harold Holt) has never seen fit to produce any evidence to back up his statement. He is like Senator McManus, who, when challenged to name those who are putting out circulars, did not go on with the business. He preferred to smear the people concerned. I am able to inform the Treasurer of the facts. I happened to be one of those who campaigned with Dr. Max Poulter. On platform after platform I heard him denounce the Communist Party and everything connected with it. The Government is so hard up for propaganda for the coming election that it seeks to brand as a Communist a highly educated man, before he gets into the Senate. Could you imagine anything more cowardly on the part of a responsible Minister than to adopt tactics of that nature? If the Government is so hard put to find something on which to fight the election campaign, the plainer it shows it, the easier it will be for the public to wake up to it.

Question resolved in the affirmative.

Senate adjourned at 11.35 p.m.

Cite as: Australia, Senate, Debates, 24 October 1961, viewed 22 October 2017, <http://historichansard.net/senate/1961/19611024_senate_23_s20/>.

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