Senate
23 November 1965

25th Parliament · 1st Session

  1. Senate
  2. 25th Parliament
  3. 1965

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

page 1689

QUESTION

COPPER

Senator McMANUS:
VICTORIA

– I desire to ask the following question of the Minister representing the Minister for Trade and Industry: Has the Government noted that, in view of the confused situation regarding copper supplies throughout the world, France, Italy, West Germany and other Benelux countries have fixed a quota on scrap exports, while Britain, New Zealand and the United States of America are reported to be implementing, or are about to implement, controls over scrap exports? Will the Government, in the interests of the Australian metal industries, immediately examine the need for an embargo on scrap exports until the position is clarified?

Senator HENTY:
Minister for Civil Aviation · TASMANIA · LP

– I thank the honorable senator for the question. I believe that it is one of great importance. If he places it on the notice paper, I shall ask the Minister for Trade and Industry to supply an answer.

page 1689

QUESTION

WHEAT

Senator MCKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

– I have been able to obtain the following information in answer to the question asked by the honorable senator. The statement in the newspaper “ Muster “ is correct insofar as there are two strains of bunt smut, one of which is controlled by hexachlorobenzene. The other strain is not controlled by hexachlorobenzene, but both strains can be controlled by organic material fungicides. An effective control therefore is available. However, the mercury treatment is more expensive than hexachlorobenzene and prolonged exposure to material fungicides involves the operator in a health risk. Plant breeders in the longer term approach to bunt control are continually selecting and developing wheat strains that promise resistance to this and other fungal disease such as rust.

All State Departments of Agriculture and agricultural research institutes concerned with diseases of wheat are informed on the situation and are watching for the appearance of the resistant strain of bunt. I understand that the plant pathologist quoted in “ Muster “ is collecting more data on the distribution of the resistant strain and is assessing alternative chemical controls. More information should be available at an early date from this source. I know of no effective means of preventing the interstate spread of this disease as the minute size of bunt spores facilitates their dispersion by wind. Nevertheless, the scientists who are watching the incidence of this disease feel * that there is no cause for undue alarm by the wheat industry.

page 1689

QUESTION

KANGAROOS

Senator MULVIHILL:
NEW SOUTH WALES

– I address a question to the Minister representing the Minister for the Interior. By way of preface, I refer to submissions made by me during the debate on 11th November 1965 on the proposed vote for the Department of the Interior, when I urged federal aid for the creation of a national park in western New South Wales which would provide a haven for the red kangaroo and other marsupials. In the light of these submissions, is the Minister aware of a recent decision of the General Council of the New South Wales Graziers Association, which called for the establishment of national parks for this purpose and cited Kruger Park in South Africa as a model? In view of this powerful association of ideas between the- Graziers Association and myself, will the Minister, if he has not already done so, discuss these joint proposals with the Minister for the Interior, with the object of having our objectives achieved?

Senator McKELLAR:
CP

– I shall present the suggestion made by the honorable senator to the Minister for the Interior.

page 1690

QUESTION

TELEPHONE SERVICES

Senator LAUGHT:
SOUTH AUSTRALIA

– I direct a question to the Minister representing the PostmasterGeneral in relation to the small automatic telephone exchanges promised last week by the Postmaster-General. Can the Minister state where such exchanges will be located in South Australia?

Senator ANDERSON:
Minister for Customs and Excise · NEW SOUTH WALES · LP

– When the PostmasterGeneral made the announcement, he indicated that 126 small country automatic telephone exchanges were to be installed and that of these 38 were to be provided in New South Wales, 28 in Victoria, 11 in Queensland, 12 in South Australia, 30 in Western Australia and 7 in Tasmania. I inform Senator Laught, who represents South Australia, that automatic exchanges are planned for establishment in the State at Malinong, Lowbank, Howard Springs, Bray, American River, Edithburgh, Neales Flat, Roseworthy, Mitchell, Bayley Plains, Cadgee and Yeelanna.

page 1690

QUESTION

RESEARCH

Senator MURPHY:
NEW SOUTH WALES

– I direct a question to the Minister in Charge of Commonwealth Activities in Education and Research. Now that two United States members of the House Committee on Science and Aeronautics have joined the Australian Labour Party and Australian scientists in criticising the Commonwealth Government for failing to provide sufficient money for scientific research and development in Australia, will the Minister at last stir the Government to take action to get Australian science and development out of the doldrums and overcome the long standing neglect that is so injurious to the national interest?

Senator GORTON:
Minister for Works · VICTORIA · LP

– It seems to me that this question contains a good deal of personal belief and comment which is not really related to the facts. I point out to the honorable senator that the report to this chamber by the Commonwealth Scientific and Industrial Research Organisation showed that there had been an increase of some 90 per cent, in the facilities and finance made available for that branch of scientific achievement in Australia over the last five years. The sums of money made available in various ways to universities for scientific research have also been vastly increasing. To suggest that nothing has been done along these lines and that there has not been a great increase in the finance and facilities made available for scientific research in this country is to say something that is just not true.

I am also not prepared to accept the honorable senator’s statement that two members of the United States Congress made some charge against the Australian Government in this field. I saw the report of an interview at the airport in which, it was alleged, one of the senators had said that he felt a great deal was being done in Australia in this field, but perhaps more finance might be made available by the Federal Government. That is the sole basis that I have seen for this question, and. as against it, we have his alleged admission, which may not be any more accurate than the one to which the honorable senator referred, that a great deal is being done, and the record which shows what is being done/

page 1690

QUESTION

AID TO UNDERDEVELOPED COUNTRIES

Senator WEBSTER:
VICTORIA

– My question to the Minister representing the Minister for External Affairs relates to gifts of food and grain to India. Is the Minister aware of a statement in the Melbourne “ Herald “ of Monday, 22nd November 1965, regarding the distribution of food in India? The article carries the heading “ Aid Goes to Black Market “, and contains a comment by a Salesian priest, Father Luciano Colussi, who said on his arrival in Melbourne that much of Australia’s aid to India-

The PRESIDENT:

– Order! The honorable senator may not read a newspaper statement when asking a question.

Senator WEBSTER:

– Much of Australia’s aid to India is getting into the hands of the black market. Because of the strict import restrictions in India, much of the food is going to the rich and the tourists at outrageous prices. Is it the Government’s intention that aid of this kind should be distributed to the poor and undernourished in India? Will the Minister have a statement prepared regarding Australian gifts of food to India and advise the Senate of the truth or otherwise of the statement?

Senator GORTON:
LP

– I think the honorable senator should put the question on the notice paper so that the Minister for External Affairs can give him a written reply. If the honorable senator -is referring to Colombo Plan gifts, I point out to him that the distribution of food supplied in that way by Australia is a matter for the Indian Government and its agencies. The Australian Government’s responsibility ends when the grain, or whatever the gift may be-

Senator Webster:

– I am not referring to Colombo Plan aid.

Senator GORTON:

– If the honorable senator is not referring to Colombo Plan aid, then the matter to which he is referring is not something which comes within the administration of this Government.

Senator Webster:

– I am referring to special aid.

Senator GORTON:

– The same position would apply. If a gift is made on a government to government basis as a form of special aid, distribution within the country to which the gift is made is the responsibility of the Government of that country and its agencies. The Australian Government has no control over the actions of the Government of the country receiving the gift. This is not to be taken as indicating whether or not the report is true. I am merely putting the facts of the position in focus. If the honorable senator puts the question on the notice paper, he will get a reply from the Minister for External Affairs.

page 1691

QUESTION

CIVIL AVIATION

Senator DEVITT:
TASMANIA

– Will the Minister for Civil Aviation advise whether any change in flight timetables is contemplated following a recent visit to Tasmania by an official of Trans-Australia Airlines ostensibly for the purpose of checking the suitability of present flight schedules?

Senator HENTY:
LP

– I have no information on the outcome of that visit.

page 1691

QUESTION

VIETNAM

Senator WEDGWOOD:
VICTORIA

– Has the attention of the Minister representing the Minister for External Affairs been directed to a report in the Melbourne “ Age “ that al a Vietnam rally the statement was made that the Communists pose no threat to Australia? Will the Minister contradict that statement?

The PRESIDENT:

– Order! I am not sure that the honorable senator’s question is in order. She is asking for comment on a statement in a newspaper. I will rule the question out of order until I have given it more thought.

Senator GAIR:
QUEENSLAND

– I direct my question to the Minister representing the Minister for External Affairs. Is the Minister aware of any talks involving Communist Rumania and the United States of America on a proposal for Rumania to mediate in the Vietnam war? If the reports are correct, will the Minister inform the Senate whether Australia has been consulted and is being kept informed of the progress of such talks?

Senator GORTON:
LP

– As far as I am concerned, the answer to the first part of the question is: No. However, it would be more satisfactory if the honorable senator put his question on the notice paper and obtained an answer from the Minister for External Affairs. All I have seen is a newspaper report to the effect that someone had said that this was so and a newspaper report to the effect that it had been denied by the United States Administration.

page 1691

QUESTION

POSTAL DEPARTMENT

Senator LILLICO:
TASMANIA

– My question to the Minister representing the PostmasterGeneral arises from the question asked by Senator Laught about the installation of automatic telephone exchanges. Has the Minister any information on the location of these exchanges in Tasmania?

Senator ANDERSON:
LP

– I cannot tell the honorable senator the locations in Tasmania at this moment but I will certainly give them later in the day.

page 1691

QUESTION

COMMUNISM

Senator WRIGHT:
TASMANIA

– I preface a question directed to the Minister representing the Minister for External Affairs by stating that over the weekend, a member of the Commonwealth Parliament made a public statement at a Vietnam rally to the effect that Communists pose no threat to the security of Australia. Will the Minister say what are the facts in this respect? As it is a matter of very damaging public importance if the statement is unfounded, will the Minister do his best by a statement to this House to present the facts for the information of the public?

The PRESIDENT:

– Order! Is the honorable senator asking for an expression of opinion or for the facts? Is he asking for a definite assurance that the statement is incorrect?

Senator WRIGHT:

– I am not. My question was quite explicit and I submit with great respect that it should go to the Minister without interruption. The question was directed to high matters of State within the responsibility of the Minister for External Affairs. I have asked the Minister representing the Minister for External Affairs to make a statement in this House for the information of honorable senators and the Australian public as to whether or not there is any foundation in fact to justify the statement made by a member of another place at a Vietnam rally that Communists are not a threat to the security of Australia.

The PRESIDENT:

– I shall see what the Minister has to say in reply.

Senator GORTON:
LP

– The answer to the first part of the question is: Yes, I saw the newspaper report.

Senator Wright:

– I did not ask the Minister that.

Senator GORTON:

– The honorable senator has asked for some information on a statement attributed in a newspaper report to a member of another place that Communism posed no threat to Australia. We in this House have debated many times statements made by the Minister for External Affairs on behalf of the Government which spelt out quite clearly the threats of Communist aggression to Australia. Those statements have made it clear that Communist aggression is going on now. That being so, I suggest that it is quite wrong to defend Communism and to say that Communist aggression, which is now a part of that ideology, poses no threat to Australia. It is even worse to couple that statement with an attack on the Returned Services League which a member of another place did at the same time.

page 1692

QUESTION

HOSPITAL BENEFITS

Senator GAIR:

– I direct a question to the Minister representing the Minister for Health. Is there any foundation for a report which appeared in the Brisbane “ Truth “ dated 21st November that a new Federal edict prohibits hospitals with sections for the chronically ill from admitting patients expected to live for more than six months? The report states that the edict requires every doctor henceforth to sign a certificate stating how long he thinks his patient will live. Should patients be expected to live beyond six months, the edict requires the hospitals either to order their removal or to suffer severe financial embarrassment in that, after six months, the Federal daily subsidy for such patients is to be reduced from £1 16s. a day to £1 a day. Should the report be correct, will the Minister, in appreciation of the excellent service provided by these hospitals for the incurably ill and for the aged sick people of our community, reconsider his decision with a view to giving those hospitals the most generous financial aid possible to enable them to maintain a service that is indispensable and worthy of every encouragement and financial support?

Senator McKELLAR:
CP

– I have no personal knowledge of the edict. I will refer the question to the Minister for Health.

page 1692

QUESTION

BASS STRAIT TRADING SUBSIDY

Senator WRIGHT:

– I direct a question to the Minister representing the Minister for Trade and Industry upon the very uncontentious matter of Bass Strait trade. Can the Minister tell me whether or not the Federal Government is making any representations to the Tasmanian Government to supply a subsidy with respect to trade between King Island and Tasmania on an equal basis with the subsidy that the Commonwealth has provided for trade between King Island and Melbourne so that the great imbalance of trade that is thereby being caused can be rectified?

Senator HENTY:
LP

– The honorable senator makes a rather novel suggestion when he asks us to approach the Tasmanian Government to provide a subsidy similar to the one we are providing in the interstate field. The Minister for Shipping and Transport deals with the matter of subsidies in this regard. I should like to obtain from him the latest information on the position. I will pass that information on to the honorable senator.

page 1693

QUESTION

COMMONWEALTH BUILDINGS, PERTH

Senator WILLESEE:
WESTERN AUSTRALIA

– I ask the Minister for Works whether he has seen an article In the “ West Australian “ of last Friday in which there is both defence and criticism of the fact that Commonwealth Government office buildings in Perth are costing £1,000 a square as against a cost of £600 a square for private office buildings being constructed there. If the Minister has not read the report I ask him whether he will do so and give me a considered reply as to whether he considers this is a desirable state of affairs for his Department.

Senator GORTON:
LP

– I am afraid the answer to the first part of the honorable senator’s question is: “ No “. But I will certainly look at the report. If it is an accurate statement as to the state of affairs, or even if it is not, I will get the Department of Works to provide me with some facts to enable me to give an answer to the question.

page 1693

QUESTION

CIVIL AVIATION

Senator KENNELLY:
VICTORIA

– My question is addressed to the Minister for Civil Aviation: Will he ask the two major airline companies for a report on the number of flights that have been delayed within the last 14 days?

Senator HENTY:
LP

– The honorable senator will understand that I cannot give these figures off the cuff. I will ask the two airlines to provide me with that information and also, perhaps, the reasons for the delays.

Senator KENNELLY:
VICTORIA · ALP

– The position is becoming a bit monotonous.

Senator HENTY:

– Yes. The strike has necessitated this.

Senator CAVANAGH:
SOUTH AUSTRALIA

– I ask the Minister for Civil Aviation whether he will include in the inquiry he is to make for Senator Kennelly an explanation as to why the morning service from Adelaide to Sydney and the return service in the evening from Sydney to Adelaide have been cancelled with the result that those who come to Sydney to do one day’s business have to spend two nights there. Can the Minister give the reason why both airlines have stopped this service?

Senator HENTY:

– I suggest the honorable senator will agree with me when I say that it is not hardship to spend two nights in Sydney.

Senator Cavanagh:

– To a person who comes from Adelaide it is.

Senator HENTY:

– This is a matter which the two airlines only can answer. I will include in my inquiries the question as to the reason why this service has been discontinued.

page 1693

QUESTION

POLITICAL PARTIES

(Question No. 578.)

Senator COHEN:
VICTORIA

asked the Minister rep resenting the Attorney-General, upon notice -

  1. Did an organisation calling itself the National Australia Parly hold a public meeting on the Yarra Bank in Melbourne on Sunday, 29th August 1965?
  2. Did the members of the organisation wear stormtroopers’ uniforms?
  3. Were swastikas prominent on the platform at the meeting?

  4. Did a man named Juris Von Rand, calling himself the State leader and national organising secretary, tell the meeting -

    1. that the party was Fascist;
    2. that one of its main aims was to justify many of Hitler’s policies?
    3. that the members were willing to use force if necessary to achieve their aims?
  5. What is known of the objects and programme of the organisation? Is it racist and/or anti-Semitic?
  6. What is known concerning the numbers, composition, nationality and country of origin of the membership of this organisation in Victoria and other States?
  7. Has this organisation any links with any other Fascist or Nazi-type organisation in Australia or overseas?
Senator GORTON:
LP

– The AttorneyGeneral has supplied the following answers to questions 1 to 7 -

An organisation calling itself the National Australia Party was formed in January 1965, following a purported dissolution of an organisation called the National Socialist Party of Australia. The National Australia Party is a very small organisation, most of its members being in New South Wales. The expressed aims of the Party, many of which could be described broadly as nationalistic and socialistic, include the government of Australia by the Party, on a one party basis. The Party is not known to have links with persons or associations overseas.

Reports I have received indicate that the party held a meeting on the Yarra Bank in Melbourne on Sunday, 29th August 1965, and that a man named JuriKlement, who,I have reason to believe, had used the name Juris Von Rand, attended the meeting wearing a uniform. Some members of the party apparently are anti-Semitic, butI do not believe that the party presents any threat of a racist or any other nature to the Australian way of life.

page 1694

QUESTION

CONSTITUTIONAL POWERS OF STATES

(Question No. 616.)

Senator MURPHY:

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

  1. In what years and in what cases have applications been made to the High Court for a certificate that a question as to (a) the limits inter se of the constitutional powers of the Commonwealth and those of any State or States and (b) the limits inter se of the constitutional powers of any two or more States, which has been decided by the High Court, is one which ought to be determined by the Privy Council?
  2. What were the results of the applications?
Senator GORTON:
LP

– The AttorneyGeneral has supplied the following answers -

  1. Applications have been made to the High Court for such a certificate in the following years and in the following cases - 1903, Murray & Co. v. Collector of Customs (see note). 1904, The Municipal Council of Sydney v. The Commonwealth. 1904, Deakin v. Webb; Lyne v. Webb. 1907, Baxter v. Commissioner of Taxation. 1907, Flint v. Webb. 1912, Colonial Sugar Refining Co. Ltd. v. Attorney-General of the Commonwealth. 1914, Jones v. Commonwealth Court of Conciliation and Arbitration. 1921, Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. 1929, ex parte Nelson. 1932, New South Wales v. Commonwealth (No. 2). 1934, Cox v. Journeaux. 1946, Australian National Airways Pty. Ltd. v. The Commonwealth and others (No. 2). 1952, Nelungaloo Pty. Ltd. v. The Commonwealth. 1956, O’Sullivan v. Noarlunga Meat Ltd. (No. 2). 1956, Poulton v. The Commonwealth and others (No. 2). 1961, Whitehouse v. The State of Queensland.

Note. - In Murray & Co. v. Collector of Customs, the Court held that the case did not fall within the section.

  1. All the applications were refused except in the case of Colonial Sugar Refining Co. Ltd. v. Attorney-General of the Commonwealth, which was granted.

page 1694

QUESTION

SHIPPING

(Question No. 621.)

Senator MURPHY:

asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. To what extent is the shipping industry in Australia owned or controlled by companies or persons resident in Australia or companies owned and controlled by Australian residents?
  2. Which are the principal companies or persons involved and what is the extent of their ownership or control of (a) intrastate shipping, (b) interstate shipping, and (c) overseas shipping, in respect of (i) passenger traffic, (ii) bulk cargo, and (iii) other cargo?
Senator ANDERSON:
LP

– The Minister for Shipping and Transport has supplied the following answers -

  1. The only sector of the Australian shipping industry in which overseas interests exercise a significant measure of control is that comprising oil tankers. Of the twelve licensed tankers opera ting on the Australian coast eight, with a total deadweight tonnage of 133,000 tons, are controlled by overseas oil companies, three tankers with a total deadweight tonnage of 52,200 tons are owned by a company incorporated in Hong Kong - Hong Kong Tanker and Traders Ltd., which is a subsidiary of an Australian company, R. W. Miller (Holdings) Ltd. - and one tanker of 18,260 tons deadweight is owned by Ampol Petroleum Ltd. also an Australian company. (Ampol Petroleum Ltd. also owns two tankers engaged in overseas trade.)
  2. The principal companies controlling the Australian coastal fleet and the extent of their interests as at 30th June 1965 are shown in the following table. The vessels owned or operated by these shipping interests comprise 89 per cent, of the aggregate deadweight tonnage of the Australian merchant fleet. The remaining 11 per cent, of the merchant fleet, comprising 37 vessels aggregating 110,792 tons deadweight, is owned or operated by 23 shipowner companies. (Note. - Some vessels are engaged in more than one trade, e.g. passenger and general cargo trade, both interstate and intrastate.)

page 1696

QUESTION

TELEPHONE SERVICES

(Question No. 673.)

Senator MULVIHILL:

asked the Minis ter representing the Prime Minister, upon notice -

In view of the increased number of private investigation agencies that operate throughout the

Commonwealth and the current experience in the United States of many of these agencies using various electronic devices for wire tapping and other forms of surveillance, will the Government, in conjunction with State authorities, take prompt steps to stamp out this cult of snooperism?

Senator HENTY:
LP

– The Prime Minister has provided the following answer to the honorable senator’s question -

The Telephonic Communications (Interception) Act 1960 was introduced by the Government specifically for the purpose of protecting the privacy of telephone conversations by making the interception of telephonic communications a criminal offence. The Telephone Regulations also assist in preserving the privacy of telephone conversations.

page 1696

QUESTION

FISHING

(Question No. 689.)

Senator WHEELDON:
through Senator O’Byrne

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

  1. Is it a fact, as reported, that the Government is to sell monopoly rights to the fishing in the coastal waters of Papua and New Guinea to Japanese interests?
  2. Will the Minister provide the Senate with details relating to negotiations with Japanese interests concerning the Papua and New Guinea fishing industry?
Senator GORTON:
LP

– The Minister for Territories has supplied the following answers -

  1. No. Under the law of the Territory it is not possible for the Administration to give monopoly rights for fishing.
  2. No negotiations have taken place with Japanese interests. The Department of Territories is examining a tentative proposal put forward by a local Territory company for the establishment of a fishing industry associated with freezing and canning in the Territory. This proposal envisaged joint participation by Australian, American and Japanese interests.

page 1696

QUESTION

PEARL INDUSTRY

(Question No. 690.)

Senator MURPHY:

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

  1. To what extent is the pearl industry of Australia owned or controlled by companies or persons other than persons resident in Australia or companies owned and controlled by Australian residents?
  2. Which are the principal companies or persons involved and what is the extent of their ownership or control of (a) fishing, (b) culture, (c) processing and (d) marketing?
Senator MCKELLAR:
CP

– The Acting Minister for Primary Industry has supplied the following answer to the honorable senator’s questions -

  1. It is assumed that the honorable senator is referring to the pearl culture industry and not to the pearl shell industry. The latter, in addition to supplying the live oysters to the pearl culture industry, produces mother of pearl shell for export. It also produces a few natural pearls. The cultured pearl industry is based on techniques developed by the Japanese and was inaugurated in Australia in 19S6 with a joint venture between an Australian company, Pearls Pty. Ltd., and the Nippo Pearl Co. of Japan. Since 1956 five other Australian companies have entered into similar joint ventures with Japanese associates and three independent groups of Australians have engaged in experimental operations and have set up small pearl culture farms.

The six Australian companies in joint ventures are: Pearls Pty. Ltd., Canberra; Cape York Pearl Culture Co. Pty. Ltd., Brisbane; Associated Rural Industries Ltd., Sydney; Australasian Pearlers Pty. Ltd., Melbourne; Barrier Pearls Pty. Ltd., Sydney; and Paspaley Pearling Co. Pty. Ltd., Darwin. The three independent Australian operators are: D. M. Brown, Broome; A. C. Morgan, Broome; and W. Ahloy, Thursday Island.

As the. honorable senator will no doubt be aware, details of the shareholdings in the companies may be obtained from the appropriate Registrar of Companies in each case. At present sixteen farms have been established in Australia - thirteen farms are operated by joint Australian/Japanese ventures and three by independent Australian operators. The joint venture projects are operated under agreements entered into by the Australian companies with their Japanese associates. The Australian companies hold the leases granted by the State Government or by the Administration of the Territory concerned. They are responsible for the management of the undertakings and hold the permits issued by the Minister for Primary Industry under the Pearl Fisheries Act enabling them to remove live shell from proclaimed waters to the pearl culture farms.

  1. The principal Australian companies engaged in pearl culture are Pearls Pty. Ltd., and Cape York Pearl Culture Co. Pty. Ltd. which together produce more than 80 per cent, of the total production of round pearls. The extent of their ownership or control over the functions listed by the honorable senator is as follows -

    1. Fishing: Both companies own or control pearling luggers which supply the live oysters to the culture farms. In addition, they purchase live oysters from other Australian owned and operated pearling luggers.
    2. Culture: Under the agreements entered into by the Australian companies with their Japanese associates the culture operations are performed by Japanese technicians and the production is shared equally between the Australian company and the Japanese associate.
    3. and (d). Processing and Marketing: The disposal of the respective shares of the production in the case of each joint venture is governed by the terms of the agreement. In practice virtually all the production is sent to Japan for processing and sale.

page 1697

QUESTION

PACKAGING

(Question No. 697.)

Senator COHEN:

asked the Minister representing the Prime Minister, upon notice -

  1. Did a Board of Inquiry in Victoria consisting of Mr. W. J. Cuthill, S.M., report in Aptil 1964, that some types of labelling and packaging were “ a monstrous fraud on the public “?
  2. Did the Board draw attention to the need for uniform laws throughout Australia to protect consumers from such fraudulent practices?
  3. What progress have Commonwealth and State Governments made towards agreement to secure the introduction of uniform legislation on this subject?
Senator HENTY:
LP

– The Prime Minister has provided the following answers to the honorable senator’s questions -

  1. The words “ a monstrous fraud on the public “ appear in the Report of the Board of Inquiry into the Standardisation and Marking of Packaged Goods as a direct quotation of evidence given by the Australian Consumers’ Association Ltd.
  2. No recommendations of any sort were made by the Board of Inquiry but the implication from the facts and opinions given in the Report is that uniform legislation to cover certain matters relating to the sale of packaged goods is desirable.
  3. A uniform code for the marking and standardisation of packaged goods, which covers many of the matters referred to in the Report of the Board of Inquiry, was adopted provisionally at a Conference of Commonwealth and State Ministers on Weights and Measures held on 23rd June 1965. A draft of uniform legislation to embody the principles and provisions of this code- is currently receiving attention. State Ministers have expressed the hope that the legislation can become operative throughout all States and Territories on 1st January 1967.

page 1697

QUESTION

INTEREST RATES

(Question No. 702.)

Senator COHEN:

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

  1. What consideration, if any, is the AttorneyGeneral giving to the desirability and/or feasibility of enacting Commonwealth legislation on the subject of rates’ of interest and other charges payable in connection with loans obtained upon mortgage or other security of land?
  2. To what extent is the study of this problem being impeded by the lack of constitutional power in the Commonwealth Parliament, noted in the Report of the Joint Committee on Constitutional Review?
Senator GORTON:
LP

– The AttorneyGeneral has supplied the following answer - 1 and 2. The subject of this question is not one falling immediately within the ministerial responsibility of the Attorney-General. Further, the question seeks a statement of Government policy and a legal opinion, neither of which it is customary to give in answer to a question.

page 1698

QUESTION

HIRE PURCHASE

(Question No. 703.)

Senator COHEN:

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

  1. What consideration, if any, is the AttorneyGeneral giving to the desirability and/ or feasibility of enacting Commonwealth legislation on the subject of hire purchase?
  2. To what extent is the study of this problem being impeded by the lack of constitutional power in the Commonwealth Parliament, noted in the Report of the Joint Committee on Constitutional Review?
Senator GORTON:
LP

– The AttorneyGeneral has supplied the following answer - 1 and 2. The subject of this question is not one falling immediately within the ministerial responsibility of the Attorney-General. Further, the question seeks a statement of Government policy and a legal opinion, neither of which it is customary to give in answer to a question.

page 1698

QUESTION

CAPITAL ISSUES

(Question No. 704.)

Senator COHEN:

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

  1. What consideration, if any, is the Attorney General giving to the desirability and/or feasibility of enacting Commonwealth legislation on the subject of capital issues control?
  2. To what extent is the study of this problem being impeded by the lack of constitutional power in the Commonwealth Parliament, noted in the Report of the Joint Committee on Constitutional Review?
Senator GORTON:
LP

– The AttorneyGeneral has supplied the following answer - 1 and 2. The subject of this question is not one falling immediately within the ministerial responsibility of the Attorney-General. Further, the question seeks a statement of Government policy and a legal opinion, neither of which it is customary to give in answer to a question.

The PRESIDENT:

– Order! I direct the attention of honorable senators to the rules published for their guidance in asking questions. I think each honorable senator has a copy of them. They set out quite clearly that questions should not ask for an expression of opinion, for a statement of Government policy, for legal opinion or for information regarding proceedings in a committee not reported to the Senate. If honorable senators follow those principles, they will not be far astray.

page 1698

QUESTION

SALES TAX

(Question No. 716.)

Senator MULVIHILL:

asked the Minister representing the Treasurer, upon notice -

What rates of sales tax have operated since 1950 on the following types of sporting goods - (a) golf clubs and balls, (b) cricket bats and balls, and (c) footballs (all codes) and football boots?

Senator HENTY:
LP

– The Treasurer has supplied the following answer -

The various classes of goods mentioned in the question, with the exception of football boots, were subject to sales tax at the 8 per cent rate at the beginning of 1950. The rate was increased to 33 per cent. as from 27th September 1951. It was reduced to 20 per cent. as from 7th August 1952 and to 12½ per cent as from 10th September 1953.

Football boots in common with other footwear, have been exempt from sales tax throughout the period.

page 1698

QUESTION

CRAYFISH

(Question No. 718.)

Senator CANT:
WESTERN AUSTRALIA

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

  1. Has the Minister seen reports of shipments of undersized crayfish to America from Australia?
  2. Has the Minister received any reports from American importers of the shipment of undersized crayfish?
  3. What action does the Government take to ensure that exports are of standard quality?
  4. Does the Government appoint inspectors to examine the quality of exports; if so, where are these inspectors stationed, and what action do they take to protect Australian exports?
Senator McKELLAR:
CP

– The Acting Minister for Primary Industry has supplied the following answers to the honorable senator’s questions - 1.I have seen a Press statement in which an Australian exporter is reported to have been shown Western Australian crayfish tails received by an importer in the United States of America which were less than a minimum weight specified in State conservation legislation.

  1. No.
  2. Mandatory export standards for crayfish have been prescribed in the Exports (Fish) Regulations since 1949. The Regulations deal with quality, grading, processing and packaging of crayfish intended for export.
  3. Yes. During the crayfish season departmental inspectors are either stationed in areas in which shore based processing establishments operate or, by regular visits, supervise establishments and fishing vessels processing crayfish. Inspectors also check samples of packed fish before shipment to ensure compliance with the Regulations.

page 1699

QUESTION

BROADCASTING

(Question No. 721.)

Senator McCLELLAND:
NEW SOUTH WALES

asked the

Minister representing the PostmasterGeneral, upon notice -

  1. On Saturday, 6th November 1965, did the Premier of New South Wales make a broadcast over commercial broadcasting station 2GB, Sydney, the contents of which directly related to a by-election being held in that State; if so, at what time was the broadcast made?
  2. Was the broadcast or any similar broadcast made by any other broadcasting station?
  3. Did the broadcast infringe in any way the provisions of section 116(4.) or any other section of the Broadcasting and Television Act?
  4. If any infringement has occurred, what action is proposed to be taken?
Senator ANDERSON:
LP

– The PostmasterGeneral has supplied the following answers to the honorable senator’s questions -

  1. A statement by the Premier of New South Wales, which referred to the Bondi by-election, was broadcast over commercial broadcasting station 2GB during the news services commencing at noon and 6.30 p.m. on 6th November 1965.
  2. It is understood that no other station broadcast this message. 3 and 4. Section 116(4.) of the Broadcasting and Television Act provides, in effect, that election matter shall not be broadcast from midnight on the Wednesday preceding the poll for an election for Commonwealth or State Parliaments and the close of the poll. Legal advice is being secured on the question of whether the broadcast contravened the Act. When this advice is received I will further consider the matter.

page 1699

SUPPLEMENTARY REPORT BY THE AUDITOR-GENERAL

The PRESIDENT:

– I lay on the table the following paper -

Audit Act - Supplementary Report of the Auditor-General upon other accounts, for the year 1964-65.

page 1699

COLLEGE OF ADVANCED EDUCATION IN THE AUSTRALIAN CAPITAL TERRITORY

Ministerial Statement

Senator GORTON:
Minister for Works, and Minister in Charge of Commonwealth Activities in Education and Research · Victoria · LP

– by leave - Mr. President, some weeks ago I announced that the Government had decided to have an investigation made into the present and prospective need for a College of Advanced Education in the Australian Capital Territory. I wish now to inform the Senate of the membership of the Committee and of its terms of reference.

The Committee will be under the Chairmanship of Professor Herbert Burton, who will shortly retire from the position of Principal of the School of General Studies at the Australian National University. The list of members is: Professor Herbert Burton, C.B.E., Principal, School of General Studies, Australian National University, (Chairman); Mr. A. Anderson, Commonwealth Office of Education, Prime Minister’s Department, Sydney; Mrs. Helen Crisp, Canberra; Mr. H. T. C. Howard, Deputy Director, Department of Technical Education, New South Wales; Dr. D. F. Waterhouse, Chief, Division of Entomology, Commonwealth Scientific and Industrial Research Organisation, Canberra, and Mr. G. F. Wynn, Director of Education and Welfare, Department of the Interior, Canberra. The Secretariat for the Committee will be provided by the Education Division of the Prime Minister’s Department.

The terms of reference of the Committee are as follows -

To investigate and report on the present and prospective need for establishment in the Australian Capital Territory of a College of Advanced Education to prepare students and grant diplomas at the tertiary level and, in particular,

  1. (i) the disciplines in which teaching might be required;

    1. the numbers of students likely to require training;
    2. the demand of potential employers for the services of diplomates.

  2. In the event of recommendation in favour of the establishment of a college -

    1. the form of autonomous government of the college;
    2. the level of administrative and teaching staff required including methods of employment, status, salaries, and other conditions;
    3. the minimum entry qualifications of students;
    4. the method of determining the nature and length of courses;
    5. the capital facilities required and the stages at which they will be needed;
    6. the date of commencement of the college and any interim arrangements;
    7. relationship with the Australian National University and the Canberra Technical College, including opportunities for obtaining credit from the Australian National University for diploma qualifications.

Having regard to current Government policy, the Committee is not to investigate the provision of teacher training within such a college. I present the following paper -

College for Advanced Eduction in the Australian Capital Territory - Ministerial Statement, 23rd November 1965.

Senator TANGNEY:
Western Australia

. -by leave - I move -

That the Senate take note of the paper.

I ask for leave to make my remarks at a later stage.

Leave granted; debate adjourned.

page 1700

LEAVE OF ABSENCE

Motions (by Senator Henty) - by leave - agreed to -

That Senator Marriott be granted leave of absence for one month on account of business overseas.

That Senator Cormack be granted leave of absence for one month on account of business overseas.

Motions (by Senator McKenna) - by leave - agreed to -

That Senator Ridley be granted leave of absence for one month on account of business overseas.

That Senator Poke be granted leave of absence for one month on account of business overseas.

page 1700

ASSENT TO BILLS

Assent to the following Bills reported -

Northern Territory (Administration) Bill 1965.

Commonwealth Electoral Bill (No. 2) 1965.

Honey Industry Bill 1965.

Honey Levy Bill (No. 1) 1965.

Honey Levy Bill (No. 2) 1965.

page 1700

TOBACCO MARKETING BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to implement a stabilisation plan for the Australian tobacco growing industry. Tobacco growing in Australia has had a long and chequered existence but it has been in the last decade that the existing industry has undergone a marked change. Between 1956 and 1961 the Australian tobacco crop increased from about six millionlb. per annum to about 30 million lb. per annum. This rapid expansion was not without its problems and tobacco growing was extended into areas considered by some to be unsuitable. After many years of highly successful sales the 1961 auctions were marked by relatively poor clearances and a substantial reduction in the average price of leaf sold. There was considerable hardship involved for individual growers and it will be recalled that the Government made available £175,000 to alleviate distress in the industry.

Following the 1961 experience, growers’ organisations began to consider seriously plans for the stabilisation of the industry. Sales in 1962 and 1963, however, were generally satisfactory and in this period the movement towards a stabilisation plan received no particular impetus. However, in early 1964 when it became apparent that the 1964 leaf crop was likely to be larger than average - in fact, it ultimately turned out to be a record at about 34 million lb. - grower activity in relation to the development of a long term stabilisation plan became more urgent and in August 1964 proposals along these lines were submitted to Commonwealth and State Ministers.

In the past, the basis of Commonwealth support for the tobacco growing industry has been the statutory percentage usage system for Australian leaf. Under this system, maunfacturers under certain conditions pay a concessional rate of duty on imported leaf used in manufactured blends providing they use in these blends a stipulated percentage of Australian leaf. The proposals submitted by growers to the Government envisaged the retention of the percentage usage system as a basic support of their plan.

Following upon the receipt of the growers’ proposals, Commonwealth and State Ministers met on a number of occasions and agreed on the basis of a stabilisation plan for the industry. As evolved, the plan in summary provides for (a) an Australian tobacco board to administer the plan; (b) an annual Australian marketing quota of 26 million lb.; (c) a grade and price schedule, to cover the sale of the marketing quota, designed to yield an average minimum price of 125d. per lb. based on a normal crop fallout; (d) the appointment of a Commonwealth Arbitrator to settle disputes on grading between buyers and sellers. Honorable senators will be aware that, in fact, a plan along the lines of the above has been operating on an interim basis during the 1965 leaf selling season and the broad functions of the proposed board have been carried out by an interim committee.

The Australian Tobacco Board will have the following powers and functions, derived from complementary Commonwealth and State legislation: (a) To control and regulate exports of tobacco leaf; (b) to negotiate with manufacturers, growers and appropriate Government bodies agreements concerning quantities and grades of tobacco leaf to which stabilisation arrangements will apply each year; (c) to allocate such quantity between producing States according to a specific formula acceptable to the Australian Agricultural Council; (d) as a basis for such allocation to relate the formula to the average quantity of leaf sold from each State over the last five years; (e) to determine policy for the sale of quota and overquota leaf; (f) to determine a satisfactory grade and price schedule; (g) to determine the sales date schedule; (h) to negotiate with the Commonwealth Government as necessary on all matters related to tobacco marketing.

State Ministers in New South Wales, Victoria and Queensland, the current tobacco producing States, have agreed, and State legislation will be enacted, to confer upon the Australian Tobacco Board such of the above powers as fall within the sphere of State reponsibility. The Australian Tobacco Board will be comprised of four grower representatives, four manufacturer representatives, a representative of each of the three State Governments concerned and a representative of the Commonwealth as chairman. The financing of the Board’s operations is being covered by amendments to existing tobacco charge legislation.

The overall annual marketing quota of 26 million lb. will be divided amongst the tobacco producing States by the Board on a formula approved by the Australian Agricultural Council. Of course, honorable senators will appreciate that the allocation of these State quotas among individual growers will be carried out by the States themselves. The figure of 26 million lb., which has been set as the annual marketing quota, is the average of the leaf sold in the three years ending 1964. Having regard to views of both manufacturers and growers, and bearing in mind that manufacturers were carrying substantial excess stocks at the end of the 1964 season, the Government considers that the stabilisation of the annual marketing quota at this level is reasonable.

The development of a satisfactory grade and minimum price schedule is basic to the plan. The figure of 125d. per lb., as an average minimum return for a normal crop, is considered reasonable by Commonwealth and State Governments. Because of the failure of growers and manufacturers to agree on the details of a grade and minimum price schedule, the Commonwealth, in view of the proximity of the commencement of leaf sales in March this year, was reluctantly obliged to construct a schedule, based on the available information, to operate for the 1965 selling season. It was fully appreciated at the time that this schedule would be subject to review in the light of the selling experience in 1965. This will be the task of the new Australian Tobacco Board and it is hoped that it will be approached by all parties in a spirit of co-operation and goodwill with a view to the construction of a schedule which will represent with advantage the interests of growers, manufacturers and consumers alike.

Because the system will provide for minimum prices applicable to specific grades, provision must be made to settle disputes on grades. A very competent tobacco man, in the person of the late Mr. P. C. South, was appointed to the position of Arbitrator, as a Commonwealth public servant, just prior to the commencement of sales in March this year. Unfortunately, Mr. South passed away suddenly before taking up his duties. In the difficult situation which thus arose, arrangements were made with W. D. & H. O. Wills (Aust.) Ltd. for the secondment to the Commonwealth for the 1965 selling season of Mr. F. M. Munster to carry out the functions of Arbitrator. I would like to express my appreciation of the company’s secondment of Mr. Munster and to Mr. Munster himself for the very able manner in which he carried out a most difficult task. It is proposed to make a suitable permanent appointment for 1966 and subsequent selling seasons.

I have set out the main provisions of the plan for the industry which the Government hopes will bring stability into an industry which has been subject over the years to fluctuations in both production and price. As I have already informed honorable senators, the plan actually commenced in 1965 and has encountered some initial difficulties. It must be appreciated that in any stabilisation plan, it is difficult initially completely to satisfy all parties on every aspect. From the growers’ point of view, the fact that much leaf had to be re-offered, more than once on occasions, before final sale represented a somewhat costly additional marketing expense. Again, growers could not be particularly happy that manufacturers passed a large proportion of the crop to the Arbitrator. For myself, I feel that these aspects are part of the teething troubles of a new plan and I would certainly expect under normal conditions that these problems will be solved. It must be remembered that the 1965 season was a difficult one, particularly in drought stricken areas and this in itself resulted in problems as to the types of leaf on offer.

Some manufacturers, for their part, have protested with some vigour that the grade and minimum price schedule was not satisfactory to them. In the first place, they said that price relationships between grades were out of line. More importantly, however, they alleged that the schedule contains some grades of leaf which they claim are unusable. As I have already mentioned because of the lack of agreement between growers and manufacturers, a starting point had to be found early this year by the Government, with the recognition that the schedule so determined must of necessity be subject to review in the light of experience. This will be done by the Australian Tobacco Board at a very early date.

In spite of the initial difficulties which have been encountered, the 1965 tobacco sales resulted in a 95 per cent, clearance of all marketing quota leaf offered and the recent dispute between certain manufacturers and the Government concerned only the minor part, that is the remaining 5 per cent. This result indicates that growers have had an eventual clearance of all leaf and the fact of a 95 per cent, clearance at auction does not indicate that the grade and price schedule problems are insoluble insofar as they now refer only to a very small portion of the crop.

The plan as devised provides growers with an assured market at at least a minimum price for a reasonable level of production. Manufacturers are given an assurance against over-rapid and indiscriminate expansion of the local growing industry and the principle of a grade and minimum price directed towards encouraging the production of better quality leaf should ensure a confining improvement in the quality of leaf offered to them by growers. State Governments strongly support the Commonwealth in the steps being taken to stabilise the tobacco growing industry and I am confident that, given goodwill and co-operation, the various sectors of the tobacco industry, through their representatives on the Australian Tobacco Board, will solve any initial difficulties which .have arisen and ensure growers a reasonable standard of living and manufacturers and consumers a readily acceptable product. I commend the Bill to honorable senators.

Debate (on motion by Senator Benn) adjourned.

page 1703

TOBACCO CHARGE BILL (No. 1) 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to increase charges on the sale and purchase of tobacco leaf to meet the administrative expenses of the proposed Australian Tobacco Board.

Under the Tobacco Charge Act (No. 1) 1955, the rate of the charge on leaf sold by growers is one halfpenny per lb. The Tobacco Charge Act (No. 2) 1955 provides that leaf purchased by manufacturers shall bear a charge which is twice the rate applicaable in the Tobacco Charge Act (No. 1) 1955. The Tobacco Charge Act (No. 3) 1955 makes provision for rates of charge on leaf grown by a manufacturer and appropriated by him for manufacturing purposes. This latter Act, designed to meet the situation of a grower co-operative manufacturer is not relevant at the present time because no such co-operatives are in operation.

The amendment proposed in this Bill to increase the rate of charge under Tobacco Charge Act (No. 1) 1955 from one halfpenny to three fifths of a penny per lb. will therefore have the consequential effect of raising the rate of charge under Tobacco Charge Act (No. 2) 1955 from one penny to one and one fifth of a penny per lb.

In a normal year, the additional amount which would be raised by the amendment to the legislation will be £32,500. It is intended that a maximum annual amount of £30,000 will be made available to the Australian Tobacco Board for administrative expenses. As the present purpose of tobacco charge legislation is to raise moneys for research into tobacco leaf, the balance of the additional moneys raised by the present amendment to the legislation will go to the Tobacco Industry Trust Account set up for that purpose.

The amendment which is proposed is a most convenient method of raising the relatively small amount required to finance the proposed Australian Tobacco Board. It avoids the necessity for separate levies on tobacco leaf and, on the changeover to decimal currency, will mean that the charges applicable on leaf sold and leaf purchased will be one half-cent and one cent respectively. This will make for ease of collection and minimise administrative handling of deductions by selling brokers. I commend the Bill to honorable senators.

Debate (on motion by Senator Benn) adjourned.

page 1703

TOBACCO INDUSTRY BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I move -

That the Bill be now read a second time.

The amendment to the Tobacco Industry Act 1955, proposed in this Bill, is consequential to legislation in which I have already proposed to finance an Australian Tobacco Board and, for this purpose, to increase the rates of charges under tobacco charge legislation.

Section 4 (1.) (a) of the Tobacco Industry Act 1955 provides that moneys received under tobacco charge legislation shall be paid into the Tobacco Industry Trust Account which is set up under the Act to finance research and associated activities on tobacco leaf. Section 19 of the Tobacco Marketing Bill proposes that moneys be appropriated from the Consolidated Revenue Fund for the administration of the Australian Tobacco Board and an amendment which I have proposed to the Tobacco Charge Act (No. 1) 1955 will raise the necessary additional moneys for this purpose. The purpose of this Bill is to provide that moneys to be paid into the Tobacco Industry Trust Account, from amounts received under Tobacco Charge Acts, will be reduced by the amounts which are paid to the Australian Tobacco Board.

As I have already advised honorable senators, the additional amount which will be raised by the proposed amendment to Tobacco Charge Act (No. 1) 1955 will be £32,500 in a normal year. It is intended that annual payments to the Australian Tobacco Board will not exceed £30,000 and if the Board’s requirements are less, payments will be accordingly lower. The effect will be that moneys received from tobacco charges over and above payments to the Australian Tobacco Board will automatically revert to the Tobacco Industry Trust Account. Therefore, research funds will not be detrimentally affected and, in fact, are likely to be somewhat increased. I commend the Bill to honorable senators.

Debate (on motion by Senator Benn) adjourned.

page 1704

FOOT AND MOUTH DISEASE BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator MCKELLAR:
Minister for Repatriation · New South Wales · CP

– I move -

That the Bill be now read a second time. The purpose of this Bill is to extend the present provisions of the Foot and Mouth Disease Act to include two exotic animal diseases, namely, vesicular exanthema and vesicular stomatitis, which are clinically indistinguishable from foot and mouth disease. Under arrangements already made with the States, the Commonwealth will contribute 50 per cent, of the cost of eradication of foot and mouth disease should that dreaded disease ever gain entry to the country. The States collectively would contribute the other 50 per cent, of the costs of eradication.

The Foot and Mouth Disease Act, which it is proposed will be amended by this Bill, establishes a Foot and Mouth Disease Eradication Trust Account for the Northern Territory and the Australian Capital Territory in line with the arrangements I have just mentioned, and provides the terms and conditions for payment of compensation to owners of animals in the Australian Capital Territory which may be destroyed during an eradication campaign. The terms and conditions for payment of compensation in the Northern Territory are covered by the Northern Territory Foot and Mouth Disease Compensation Ordinance. Fortunately, due to the ever vigilant efforts of Australia’s excellent quarantine service, foot and mouth disease does not exist in Australia. This disease, if introduced and allowed to get out of hand in a country such as this, -would cause economic losses that could be measured in millions of pounds. In presenting this Bill to the House I am pleased to have the opportunity of reminding honorable senators how much Australia owes to the unceasing work of the quarantine service and of seeking the co-operation of travellers in complying with the quarantine requirements that are laid down. These requirements, I know, are vexatious at times to travellers, but our first consideration at all times must be the safeguarding of Australia from the heavy economic losses that the entry of exotic diseases such as foot and mouth disease would cause.

As I stated earlier, vesicular exanthema and vesicular stomatitis are clinically indistinguishable from foot and mouth disease and the Bill is intended to remove legal difficulties that could arise under existing legislation, if steps were taken to eradicate vesicular exanthema or vesicular stomatitis in the belief it was an outbreak of foot and mouth disease. I might mention that the differential diagnosis of these diseases may take a week or perhaps more and it is imperative, in the event of an outbreak of any disease with foot and mouth disease symptoms, that eradication measures be taken without delay. Both these diseases are dangerous exotic diseases in their own right and steps to eradicate any outbreaks of them that may occur should be taken immediately. Of course, expenditure of Commonwealth moneys would only be involved if an actual outbreak of one of the diseases occurred. 1 commend the Bill to honorable senators.

Debate (on motion by Senator O’Byrne) adjourned.

page 1705

NATIONAL HEALTH BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator McKELLAR:
Minister for Repatriation · New South Wales · CP

[4. 12J. - I move -

That the Bill be now read a second time.

The purpose of this Bill is to give effect to the Government’s Budget proposals on the pensioner medical service. This is the second successive year in which the Government has introduced amending legislation to provide increased benefits under the national health service. Last year, honorable senators will ‘ recall, we provided for substantial increases in the amounts of Commonwealth benefit payable to members of registered medical benefit funds. On this occasion I am pleased to say that the* Government’s measures are designed mainly to assist the senior citizens of the nation, in particular some 120,000 pensioners and their dependants.

The pensioner medical service, which commenced on 21st February 1951, operates under Part IV of the National Health Act and is a general practitioner medical service provided free of charge to eligible pensioners and their dependants. By pensioners 1 mean persons in receipt of age, invalid or widow pensions under the Social Services Act, service pensions under the Repatriation Act, and tuberculosis allowances under the Tuberculosis Act. Under the pensioner medical service, participating doctors provide medical attention of a general practitioner nature, such as is ordinarily rendered by a general practitioner in his surgery or at the patient’s home, to enrolled pensioners and their dependants. The Commonwealth pays concessional fees of 16s. for surgery consultations and £1 for domiciliary visits to doctors participating in the scheme. Pensioners eligible for enrolment in the service are issued with entitlement cards which must be produced on each occasion a pensioner or a dependant consults a participating doctor. The pensioner, or dependant, has complete freedom of choice within the range of participating doctors.

Eligible pensioners and their dependants are also entitled to additional benefits by virtue of the provisions of the National Health Act. Firstly, a full range of drugs and medicines, on a doctor’s prescription, is provided without charge under the pharmaceutical benefits scheme and, secondly, free public ward accommodation in public hospitals is available. The pensioner medical service and the allied benefits have been enormously successful and have assisted pensioners to an immeasurable degree by removing the financial worries connected with sickness.

One aspect of the service that has invoked criticism in the past concerns the restrictions placed on the eligibility for enrolment. Pensioners whose income from sources other than their pension would have rendered them ineligible to receive a pension at the maximum rate under the pensions income means test in force at 31st December 1953 are at present barred from enrolment in the pensioner medical service. The effect of this provision has been that some 120,000 of the total of 863,000 pensioners receiving age, invalid and widow pensions under the Social Service Act, service pensions under the Repatriation Act or allowances under the Tuberculosis Act have been excluded from receiving the free medical treatment, free medicines and free hospitalisation provided for eligible pensioners. Now the effect of this Bill will be to remove this restriction on the eligibility of pensioners for enrolment in the pensioner medical service. The service will be available to all full and part social service pensioners and repatriation service pensioners and their dependants who have qualified or subsequently qualify for full or part pensions under the pensions means test as at 1st January 1966.

The Australian Medical Association has indicated that its members are prepared to provide a medical service for this enlarged group of pensioners at the concessional rates of payment made by the Government which I mentioned earlier.

A further relaxation which is proposed by the Bill concerns the widening of tha provisions relating to the definition of dependants for pensioner medical service purposes. In future, full time student children of pensioners will be accepted up to the age of 21 years. This provision will mean that all dependants of pensioners recognised by social service and repatriation legislation for pension purposes and those recognised for tuberculosis allowance purposes will also be accepted for the pensioner medical service. This measure will remove some minor but nevertheless irritating anomalies.

The cost of introducing these measures is expected to be £2 million in a full year. The Government regards this expenditure as well worthwhile as a positive step forward in improving the lot of the pensioner, lt also provides further concrete evidence of the Government’s intention to expand the national health service, as the nation’s economy permits, to provide a more comprehensive coverage befitting a modern health service. The Government takes a great pride in the success of a health service which is firmly based on the principle of self help through voluntary insurance, and which has proved so acceptable to the Australian people with their well known characteristics of sturdy independence and faith in their own abilities. At the same time, the Government has always kept well in mind its responsibilities towards the elderly people who have helped to build this nation, and it gives me great pleasure to introduce this Bill which provides for increased assistance in meeting the health needs not only of age pensioners, but of other pensioners as well.

To enable the extensive administrative arrangements to be completed, which involve the Department of Social Services and the Repatriation Department as well as the Department of Health, it is proposed that the measures for relaxation of the pensioner medical service means test will come into force on 1st January 1966. The provision relating to student children will come into force from the date on which the Bill receives royal assent.

I commend the Bill to honorable senators.

Debate (on motion by Senator Dittmer) adjourned.

page 1706

JUDICIARY BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works · Victoria · LP

– 1 move -

That the Bill be now read a second time.

The purpose of this Bill is to increase the salaries of Her Majesty’s justices of the High Court of Australia. The present salaries, last dealt with in 1960, are - Chief Justice £10,000 a year, and each puisne justice £8,500 a year, lt is proposed that these salaries should now become - Chief Justice £12,000 a year and each puisne justice £10,500 a year. The Government has recently reviewed the salaries of all the Commonwealth judges but the present Bill, in recognition of the special position occupied by the High Court in the Australian judicial system, deals separately with that Court. The High Court is, unlike other courts, established by the Constitution itself. Not only is the High Court entrusted with the special task of interpreting and safeguarding the Constitution, but it is also the supreme court of appeal in Australia from all courts, including State Supreme Courts, in matters of State or Federal law. There is no doubt that the High Court is the most important court in Australia, and indeed its eminence is not merely national. Its decisions are internationally recognised, particularly in other countries with federal constitutions. It is beyond question that the High Court bench must be able to attract the most able and most learned jurists in the country. There is no justification for the members of the High Court bench being remunerated at a standard below that of the courts whose judgments they review.

The Government does not desire that there should be frequent changes in the judges’ salaries, but five years have elapsed since the salaries were last reviewed. When, in 1960, it was decided that they should be increased, two considerations particularly influenced that decision. They were the increases, in the same year, in the salaries of senior Commonwealth statutory office holders and increases that had been taking place in State judicial salaries since the previous increase in Commonwealth judicial salaries in 1955.

Itis these same two considerations that led the Government to review the judges’ salaries this year. In 1964 the salaries of the senior permanent heads of Commonwealth Departments and of the senior Commonwealth statutory office holders, were increased from £6,900 to £8,750 a year. Moreover, the salaries of the judges of the Supreme Courts of the States have been substantially increased since 1960, particularly in New South Wales, as is shown by the following table -

This means that, since the increases in recent years in New South Wales, the salaries of the judges in that State are higher than those of the justices of the High Court with the exception of the Chief Justice of the High Court. The Government has decided that the position of the High Court requires that parliamentary approval should be sought for fixing the remuneration of the justices of the High Court of Australia at the figures I have already mentioned with effect from 1st July 1965, and the Bill provides accordingly. I commend the Bill to the Senate.

Debate (on motion by Senator Kennelly) adjourned.

page 1707

JUDGES’ REMUNERATION BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works · Victoria · LP

.- I move-

That the Bill be now read a second time.

This Bill is complementary to that which deals with the salaries of the judges of the High Court. Its purpose is to increase the salaries of the judges of the Commonwealth Industrial Court, the Federal Court of Bankruptcy, the Supreme Court of the Australian Capital Territory, and the Supreme Court of the Northern Territory and the presidential members of the Commonwealth Conciliation and Arbitration Commission. It will alter the basic judicial salary of the judges and the Deputy Presidents of the Commission from £7,000 to £8,500 a year, and that of the Chief Judge of the Commonwealth Industrial Court and the President of the Commission from £8,000 to £9,500, with effect in each case from 1st July 1965.

When the Government reviewed the salaries of the justices of the High Court, it also looked at the salaries of other federal judges, and found the same disparity between the present salaries of those judges and the remuneration payable to other public officers of the Commonwealth and to State judges, to which I referred in my second reading speech dealing with the salaries of High Court judges. The disparity is shown by a table which compares the salaries of the judges of the Commonwealth Industrial Court, which is a federal superior court having jurisdiction comparable with that of a State Supreme Court, with those of the judges of the Supreme Court of New South Wales. The table also companes the salaries of the presidential members of the Commonwealth Conciliation and Arbitration Commission, which is the national industrial arbitration tribunal, with those of the judges of the Industrial Commission of New South Wales. The table is as follows -

The table shows that all members of the Industrial Commission of New South Wales are now considerably better remunerated than any member of the Conciliation and Arbitration Commission, and that the puisne judges of the Supreme Court of that State receive considerably more than any of the judges of the Commonwealth Industrial Court. The proposed increases will remove most of this disparity whilst maintaining a proper relationship with the salaries of the High Court judges.

The Government believes that the salaries fixed for the judges of the Industrial Court and the Deputy Presidents of the Conciliation and Arbitration Commission should also apply to the judges of the other Commonwealth superior courts. These judges perform functions broadly comparable with those of the Supreme Courts of the States. Several judges of the Commonwealth Industrial Court at present also hold, without additional salary, appointments as additional judges of the Supreme Court of the Australian Capital Territory and the Supreme Court of the Northern Territory, and the permanent judge of the latter court is an additional judge in the Australian Capital Territory. These arrangements, which have considerable practical advantages, underline the desirability of the various judges being remunerated at the same level. I commend the Bill to the Senate.

Debate (on motion by Senator Kennelly) adjourned.

page 1708

MATRIMONIAL CAUSES BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works · Victoria · LP

.- I move-

That the Bill be now read a second time.

This Bill proposes a number of amendments to the Matrimonial Causes Act 1959, which, honorable senators will recall, introduced a uniform divorce law for Australia on 1st February 1961. Experience throughout Australia over the period of nearly five years has shown that the legislation has been well accepted by all concerned with it. The amendments now brought forward do not add to or amend the grounds for dissolution of marriage, nor do they otherwise affect the basic principles of the legislation.

The proposals derive from careful consideration of the many helpful suggestions that came from various sources during this five year period. Judges concerned with hearing cases under the Act, the Law Council of Australia on behalf of the legal profession, the Registrars of the Supreme Courts concerned with the administration of the Act, and others having special experience or interest have made suggestions. In addition, the Government has had regard to judicial interpretation of the Act and to legislative change in the United Kingdom and in New Zealand. Some of the amendments now brought forward relate to matters of machinery or procedure, but each has its own importance, and some raise questions of principle. I propose to refer in some detail to the more important proposals in the order in which they are presented in the Bill.

The first amendment will have a narrow scope but will be of importance because it will cure an injustice from which some Australians who have married overseas may suffer. Honorable senators are well aware that a marriage solemnised according to our law must be a monogamous marriage, and it is unthinkable that we should depart from that concept. We cannot, however, ignore the position of a person who, whilst domiciled in a country that recognises polygamy, married there according to the local law. The marriage is given the character of a polygamous one by the mere possibility that the husband may take another wife.

There are unfortunate legal consequences to the parties if they should subsequently settle in Australia and seek matrimonial relief here. These unfortunate consequences are highlighted because the parties are regarded, generally, in Australia as being legally married. In this regard 1 would point out that the model Uniform Maintenance Bill, which has already passed into law in at least two States, expressly permits parties married in polygamous form to apply for maintenance orders in the magistrates courts.

English law, whilst permitting dissolution of a monogamous marriage, has never allowed the courts to deal in the same way with polygamous marriages. This law has been followed in Australia. The harshness of the rule appeared most clearly in a recent case, where the husband and wife were living in Victoria. The woman was Australian born, but acquired a domicile in Pakistan and married there in the local polygamous form. She was the only wife. Later she and her husband came to live in Australia, and her husband became an Australian citizen. Although the court found that her husband had committed adultery in Australia, the court had to deny the woman dissolution of her marriage. Yet that marriage is sufficiently recognised by our law to prevent her re-marrying in Australia. Cases like this will not be frequent, but they can occur when persons from Eastern countries become permanent residents in Australia.

The amendment, proposed in order to do justice in such cases, is carefully limited to restrict its operation. The only polygamous marriages covered will be polygamous marriages celebrated outside Australia between parties permitted by the law of their domicile to enter into such a marriage. Relief will be granted only to a party to the first subsisting marriage. The amendment will not alter our insistence that Australian marriage is monogamous, and it will give no encouragement to Australians temporarily overseas to enter polygamous marriages. Indeed, any such marriages would be invalid. A learned Professor of Law here in Australia recently pointed to the need for legislation such as is proposed, and in England there has been a good deal of criticism of the English law in this regard. I think we should bo prepared to amend our law to cover these situations, although it seems that no other English-speaking country has yet done so.

Clause 6 of the Bill ensures that, where children are State wards and their parents are divorced, the divorce will not prevent the State child welfare laws continuing to operate in relation to the children. Care of children by the child welfare authorities is a matter that should be left to State law, and the amendment makes clear a matter on which some judicial doubt has been expressed.

The next topic is reconciliation of married partners. Reconciliation is a major object of the Matrimonial Causes Act. Under the Act, the Commonwealth subsidises marriage guidance organisations to assist reconciliation. Significant success is achieved, but usually at a stage before divorce proceedings have been started or are imminent. There is a serious legal difficulty in the way of reconciliation at the stage when divorce proceedings are being contemplated or have indeed commenced. One or both parties may have grounds for divorce, but the right to divorce can be destroyed by resumption of cohabitation, even if it takes place only in an unsuccessful attempt to bring about a true reconciliation. For this reason solicitors tend to advise their clients contemplating divorce to hesitate about attempting reconciliation because of the risk that they may end up without either a reconciliation or a divorce.

The Government believes that attempts at reconciliation should nol’ be discouraged in this way, and therefore the Bill proposes provisions along the lines of recent legislation in the United Kingdom and New Zealand. Parties will be permitted to resume cohabitation for a trial period, not exceeding three months, without destroying the grounds of a petition for divorce if reconciliation is not effected during the three months period. The Court will have to be satisfied that the case is a genuine one and, once there is reconciliation at any stage during the three months period, the right to divorce will go. I am confident there will be warm approval of a provision to encourage reconciliation. It would be illogical to extend that encouragement where there has been a matrimonial offence but to deny it where the ground does not involve a matrimonial offence, as in the separation ground of section 28 (m). Reconciliation is just as much to be encouraged in these cases as in the cases of matrimonial offence. I believe that any amendment which may lead to a reduction in the number of divorces is well justified.

Proposed section 39a, also taken from the recent United Kingdom legislation, is bound up with the amendment I have just mentioned. At present, resumption of marital intercourse is conclusive against u husband that he has condoned - that is, forgiven - any matrimonial offence by his wife of which he is aware. It is not conclusive against a wife, because the law recognises that her position may be more difficult, but it is nevertheless strong evidence. Section 39a will make it’ clear that a husband, as well as a wife, may give evidence to establish the true facts without being bound by legal presumptions.

Clause 12 of the Bill is designed to prevent a combination of circumstances making a decree of divorce invalid, and thereby invalidating any subsequent marriage. Under section 71 of the Act, a decree nisi does not become absolute unless and until the Court has made a declaration that satisfactory arrangements have been made for those children of the marriage who are under 16 years of age. Cases have occurred where a child has, through inadvertence, not been named in the petition, or his age has been mis-stated. If such an error were not discovered in time, there would be no valid decree absolute. In such a case any marriage subsequently contracted would be invalid. The amendment overcomes the possibility, but the court is still required to satisfy itself that it has in fact considered the position of each of the children of the marriage. A provision is included to validate any invalid decrees that may already have been made in the circumstances I have mentioned. I doubt that in fact any cases have escaped detection, and the likelihood of future error as to the facts is even further reduced by the stringent requirements of recent amendments of the Matrimonial Causes Rules.

I pass now to clause 14 of the Bill. It is common for the court, when granting a decree nisi, to order the husband to transfer property to the wife. Section 88 is an aid to this end. It authorises the court to appoint the registrar to execute any necessary transfer that a party “refuses or neglects “ to execute. A weakness in the section was disclosed when a case occurred of a husband who could not be found to be served with the order. It could hardly be said that he had “ refused or neglected “ to obey the court’s order if it had not come to his knowledge. This gap should be closed for the future, by making it impossible to defeat the court’s order by evading service.

Clause 15 of the Bill proposes an amendment to section 89 of the Act. Where the Court dismisses a petition it may nevertheless make an order for maintenance and also for custody of children, if it is satisfied that the proceedings were instituted in good faith. In a recent case decided by the Full Supreme Court of Victoria it was held that bad faith on the part of the petitioner prevented the respondent from obtaining an order for maintenance. This was never intended, and the amendment makes it clear, that, where there is bad faith on the part of a petitioner in bringing the proceedings, it is only the petitioner who is prevented from obtaining an order for maintenance or custody. A number of minor provisions in the Bill to which I have not referred can, I feel, be more appropriately explained at the Committee stage.

I conclude by saying that the Matrimonial Causes Act of 1959 has operated with great success as a uniform law throughout Australia on a matter of great social concern. The amendments that have so far been found to be necessary are really very few when one considers the comprehensive nature of the original Act, the fact that it was the first general exercise of Federal legislative power in this field, and the previous diversity of the State laws. I commend the Bill to the Senate.

Debate (on motion by Senator Cohen) adjourned.

page 1711

STATES GRANTS (RESEARCH) BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator GORTON:
Minister for Works, and Minister in Charge of Commonwealth Activities in Education and Research · Victoria · LP

– 1 move -

That the Bill be now read a second time.

The purpose of this Bill is to establish machinery which will enable grants to be made to the States for the benefit of individual research projects of particular merit. Under the authority of this measure the responsible Minister will have power to approve Commonwealth grants to selected research workers in the States, within the limits of the amounts of money appropriated by the Parliament from time to time. The Australian Government believes that in order to obtain the best possible use of the funds which it, and where appropriate the State Governments also, will provide for scientific research, grants should be made for the direct benefit of selected research activities which are judged most likely to make a significant contribution to the advancement of science and of scientific knowledge in Australia. These special research grants will be available to research workers in the universities and other institutions, but not to those employed by government authorities. However, the adoption of this method does not mean that other forms of research will no longer receive Government support. For instance, the Australian Universities Commission will be free to provide for the needs of research in the sense of the training of postgraduate students within its general recommendations for the support of the universities.

To decide which research project should bc supported is clearly a difficult task and one requiring expert knowledge. Therefore, we established the Australian Research Grants Committee under the Chairmanship of Professor R. N. Robertson to receive applications, assess their relative merits, and select the most worthy projects. The Committee, which comprises distinguished representatives of the major fields of learning, has considered a large number of applications and has recommended research grants in various branches of science and learning, including in the humanities and the social sciences. Within the limit of the total sum of £2 million nominated for it, the Committee has recommended grants during 1965 and the whole of 1966 to a total value of £1,848,875 of which the Commonwealth will pay £932,214, assuming that each State provides half of the amounts recommended for research workers in the universities in that State. The distribution of these grants among research workers in the various States is set out in a table which, with the concurrence of honorable senators, I incorporate in “ Hansard “.

I have already released the details of the Committee’s recommendations and have announced that the Australian Government accepts these recommendations. A statement setting out the details has been distributed to honorable senators. The sum of £2 million which was nominated for the Australian Research Grants Committee, is the balance of a sum of £5 million which the Australian Universities Commission in its second report recommended should be provided by the Commonwealth and the States for research in State universities during the 1964-1966 triennium. By agreement the Commonwealth and the States are providing the other £3 million for general research training purposes during the triennium.

On this occasion almost all of the grants recommended are for the benefit of research workers in State universities and the Commonwealth stands ready to meet half the cost of such grants. It is, of course, the prerogative of each State Government to decide whether and, if so, to what extent, it will join with the Commonwealth in matching the grants. While the States have known for some time about this programme of support for special research projects and of its financial implications, they could not know until the Australian Research Grants Committee had framed its recommendations what the financial commitment of each State would, in fact, be. I am pleased to inform the Senate that the Governments of five States have agreed to support the Committee’s recommendations in full. The Government of New South Wales is still considering its position.

This Bill gives general authority for the payment of special research grants to research workers in the States who will be selected under the procedures I have outlined. The Appropriation Bill (No. 2) 1965- 66 includes provision under Division No. 945, subdivision 1, for the estimated expenditure of £750,000 during the current financial year, on the first series of special research grants. I commend the Bill to the Senate.

Debate (on motion by Senator Cohen) adjourned.

page 1712

CURRENCY BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

page 1712

DECIMAL CURRENCY BOARD BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

page 1712

RESERVE BANK BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

page 1712

STATES GRANTS BILL 1965

Second Reading

Debate resumed from 16th November (vide page 1522), on motion by Senator Henty-

That the Bill be now read a second time. ‘

Senator WILLESEE:
Western Australia

.- The States Grants Bill 1965, which contains nine clauses, appears to be a rather innocuous bill when contrasted with some of the lengthy measures that come before the Senate and which undoubtedly will come before the Senate in the closing stages of this sessional period. The difficult measures always come before the Senate very late in the sessional period. The purpose of the Bill is stated in the title in the following words: “ To grant Financial Assistance to the States “. It seems to me that the word “ assistance “ is a great understatement. The term “ assistance “ conjures up in my mind the thought of help in carrying out a project or a task that one might be undertaking. But the assistance envisaged in the Bill provides by far the greatest amount of revenue that flows into the States’ coffers. The Bill, together with associated bills, provides for 20 per cent, of the estimated expenditure in this year’s Budget.

Although the Bill contains only nine clauses and has a very innocuous title, it is of tremendous importance. It provides the means for disbursing to the States approximately £378 million of the Commonwealth’s revenue. Provision has been made in the Budget for payments to or for the States amounting to £555 million. There are two interesting features of the Bill. First, it is not one of those bills that have to be considered by us each year and, secondly, it is not a bill to amend an act which we do not have to consider again until a further amendment is necessary.

This Bill covers revision of the tax reimbursement formula, which this Senate debates about every five years. This is the basis of the whole of the financial arrangements between the Commonwealth and the States. The Commonwealth, of course, has become the main taxing body. I would almost say it was the only taxing body, but that would not be true. In time to come, it certainly could be the only taxing body.

The present position came about in 1942 when, under the Prime Ministership of John Curtin, the States were assembled and asked, because of the war period through which Australia was passing and in the light of recommendations of a special committee on taxation, to grant to the Commonwealth exclusive power to impose income tax. It was said that there just was not room for seven taxing authorities in this field at one time. The proposal was opposed unanimously at that stage by the States. Later, it was opposed in the High Court of Australia by five of the States - one of them subsequently withdrew its opposition - but finally uniform income taxation as we know it today came to Australia. Although from time to time we hear from the States criticism of the system, I do not think that anybody any longer takes them seriously. Mr. Bolte, the Victorian Premier, was the latest to voice criticism of the system, but even though he made some headlines in the Australian Press, nobody who thought at all about this subject took him very seriously.

The States vacated this field of direct taxation, allowing the Commonwealth exclusive rights to it. In turn, the Commonwealth agreed to stand out of one or two fields of taxation, for instance, entertainments tax. Since that time, the High Court has held that the Commonwealth has a prior right to impose direct taxation. This Bill provides a means of reimbursement of some of the revenue received from uniform taxation. The Commonwealth insists upon priority in the field of direct taxation, leaving to the States other areas of taxation with which I shall deal in a moment or two. If we directed our thoughts to the manner in which income tax collections should be reimbursed to the States, this Bill could take several months to debate. The Government’s answer, quite rightly, always is that those distributions are the result of an agreement reached between the Premiers and representatives of the Commonwealth after meeting in conference. Although nobody suggests that the Premiers are completely satisfied when they leave the conference table, this distribution at least is on the basis of the agreement finally reached. A bill is then put forward by the Government and on this occasion it is certainly not opposed by the Opposition.

The matter opens up all sorts of fantastic studies, to which not enough thought is given, in relation to the rate of taxation, the rate of expenditure, and the flexibility of expenditure that is necessary in the Australian context today. We read that many years ago there were great debates on the question of the federal system as against unification. This Bill, more than any other, underlines the relationship between the Commonwealth and the States and illustrates to what extent federalism still exists in Australia and to what extent unification has progressed. I do not think it would be incorrect to say that in the financial field unification is already here, and here to stay. We have an interesting situation in that we have at least the federal structure in other relations between the Commonwealth and the States, but I do not think it is an overstatement to say that in the allimportant field of finance unification has already arrived.

The Senate ought to be applying itself to a consideration of how far along the track the Commonwealth has gone, how satisfactory these relationships are, and how satisfactory they will be in the foreseeable future, with the Commonwealth progressing at the tremendous rate at which it must progress. All sorts of taxes, both direct and indirect, are imposed by both the Commonwealth and the States. An indirect tax is levied by the Commonwealth in relation to health. Some portion of our income tax is specifically attributable to contributions for social services, and some part of our tax goes towards the provision of health services. In addition, if the people want to share in the benefits given by the Commonwealth under its health and medical services scheme, they must pay what is an extra tax or rate, which is a charge on the families of Australia and reduces their standard of living. The Commonwealth insists that in order to qualify for medical and hospital benefits a person must pay an amount of money to a private insurance company. For a small family this amount would average about £25 a year. This is another rate that the people must pay before they can take out of the Commonwealth’s coffers money which they have contributed in taxes and which has been allocated for Commonwealth hospital and medical benefits.

The States have their own spheres of taxation. I have already referred to entertainments tax. They engage in what 1 consider to be some very doubtful forms of taxation. One of these is a gambling tax. State Governments in every State except South Australia conduct lotteries. Last Saturday the Government of South Australia was given a clear mandate to go ahead and introduce a lottery. What might be termed starting price betting taxes operate in most States now. In my own State of Western Australia, for many years State revenue was augmented by the simple expedient of pinching and fining starting price bookmakers. A Labour government decided that this situation should be cleaned up and it allowed registered bookmakers to take over the activities in which illegal bookmakers had been engaged. A bookmaker who was registered for operations on the course was registered also for operations off the course. A Liberal government socialised this activity. It put the bookmakers out of business and set up a government agency called the Totalisator Agency Board.

This procedure has been followed by some other States. Here are some forms of taxation at which the founding fathers would have held up their hands in horror. But these are forms of taxation to which the States are forced to resort if they are not getting enough money from what might bc termed legitimate forms of taxation. Poker machines, from which States draw revenue, are not allowed in my State but are common in most other parts of Australia. As long as we have a Commonwealth

Government which does not return sufficient revenues to the States or does not use its influence to get the States to abandon those forms of taxation the States will be forced more and more to resort to forms of taxation which I call very doubtful and which I regard as undesirable.

I refer to taxes which are imposed on services. The States tax their people at a level higher than is required to allow them to render services; the States overtax them. An example of overtaxation is to be found in water rates. The States raise enough money for the servicing of water supplies, but this field has proved an enticing way to raise extra revenue. The same applies to motor car registration and land rates. These courses become necessary because the States are not being reimbursed sufficiently from the proceeds of uniform taxation through measures such as the one we are discussing today. We must realise that whatever the tax - whether it is levied by the Commonwealth, by States, by shires or by municipalities - it is levied upon one set of people to be used for their benefit. In other words, we are all Australians, and all of the taxes that we pay come out of the earnings of all of the people.

It is not easy to say how much should be raised by local authorities, by the States and by the Commonwealth. Each is doing an essential job. Forecasting and budgeting for expenditure is probably easier for the Commonwealth than for the States. It is much easier for the Commonwealth to assess what should be spent on the armed services, on public works and buildings and on the Postmaster-General’s Department - the biggest of the Commonwealth departments - than it is for the States to assess their expenditure. They may suddenly have to face up to the effect of a severe drought, a cyclonic disturbance or something of that nature. Assessment of expenditure is easier for the Commonwealth than for municipalities, which battle from day to day with the very intimate duties of clearing rubbish, setting up libraries and performing all the services which are common to municipalities.

In his second reading speech the Minister for Civil Aviation (Senator Henty) referred rather proudly to the amount provided for in the Bill, which is greater than any amount provided in any of the other years in which the current agreement has operated. We can fool ourselves unless we do more than the Minister did. He merely referred to the figures. Today the States are caught between two millstones, the upper stone being the deteriorating value of money and the lower stone being the increase in population. Each State has a higher population on Christmas Day than it had on the 1st January of that year. lt is misleading to say that we are doing more for the States because the allocation this year is greater than it was last year. We must increase the allocation each year to offset the two factors I have mentioned. If we do only that, we are merely providing services for the people on the same scale and in the same fields as in the previous year. If we want to move into other fields - my own State of Western Australia is vitally interested in moving into other fields - we must substantially increase the tax reimbursements. This means, of course, that the Commonwealth must raise an increased amount of revenue. If this is not done, the States will have to turn to lotteries, the Totalisator Agency Board and similar ways of obtaining funds. That would not be very desirable, particularly if we are interested in the future welfare of Australia.

The Commonwealth itself imposes some pretty peculiar taxes. Let me mention in passing a matter that has been raised and debated here on several occasions. Quite frankly, I cannot understand the Government’s action in levying taxes and charging the people interest when portions of the tax collections are farmed out to departments such as the Posmaster-General’s Department. The Commonwealth raises funds from taxes. No interest is payable by the Commonwealth on those funds, but when some of them are disbursed for capital works for the Postmaster-General’s Department we charge ourselves interest at the rate of 5 per cent, for the first half of the year and 5i per cent, for the second half of the year. Over the last 20 years the Postmaster-General’s Department has been supplied with £669 million to enable it to provide essential services to the people. Of this amount, the taxpayers provided £640 million through direct taxation, and the profits of the Post Office provided £29 million. The Treasury received £669 million on which hot one penny interest was payable. However, when the money is farmed out to the Post Office - £90 million has been earmarked for this purpose for next year - we charge ourselves interest of 5 per cent, and 5b per cent, on it. Telephone subscribers paid to the Post Office £41 million in rentals and £71 million for calls, and there was an interest charge of £25 million. It will be seen that the interest charge was about one-half the amount paid by way of rentals and about one-third the amount paid for calls.

If ever there was a country in which communications charges should be low, that country is Australia. This is a big country with a very small population. It is developing rapidly, but not rapidly enough. There is a growing body of opinion which is demanding that we should move into undeveloped areas and commit ourselves to high capital expenditure there, even though there will not be very much return on that expenditure for a while. So far those demands have fallen largely on deaf ears. Communications are very important in the outback areas. If we are to encourage people to go into those areas and develop them, we must provide cheap means of communication there.

I have not yet heard an argument which I can accept in favour of the process of our supplying interest free money to the Government and burdening ourselves with increased taxes so as to pay interest on that money when it is farmed out to Government depts. Why do we not try to raise money for these ventures by way of loans? Apparently we are committed to meeting this expenditure out of taxation revenue for no other reason than that the Government says we should do so.

Senator Ormonde:

– The charging of interest that the honorable senator has mentioned is a new development.

Senator WILLESEE:

– It has been in operation for only a few years. To me, it is fantastic to charge ourselves interest on our own money. The only fair tax is a direct tax, spread over, the people of Australia. Prior to 1942, such a statement would have been considered to be radical, but since the introduction of uniform taxation in 1942 it is only a statement of commonsense. The practice of concealing taxation by imposing indirect taxes on the community and letting them fall where they will is wrong. The only fair system of taxation is a system of direct taxation which allows the taxing body to assess accurately the amount that it wants to spend, the amount that it wants to raise and the levels of the community from which the funds will be raised.

I want to comment on the betterment factor, which the Minister said is set at 1.2 per cent. When he is replying to the debate I should like him to explain that in a little more detail. There was criticism when the Vernon Committee suggested that the national growth rate should be 5 per cent. I remember the Australian Labour Party suggesting a growth rate of 5 per cent. during an election campaign, and I think the Prime Minister then fixed the rate at 45 per cent. That was a case of Tweedledum or Tweedledee, because there was unanimity in all sections of the community which examined this problem that the growth rale should be about 5 per cent. The suggestions ranged from4½ per cent. to 5¼ per cent., but do not let us argue about that. In the circumstances, it seems to me that the proposed betterment factor of 1.2 per cent. is too low. I believe that it should be fixed at a higher rate.

Senator Scott:

– What rate does the honorable senator suggest?

Senator WILLESEE:

– I do not know. I am leaving that to the Minister. If we raised it to about 2½ per cent., that would be about half the 5 per cent. growth rate suggested by the Vernon Committee. In any case, the Minister may be able to develop this aspect later. I return to the theme that the Commonwealth, which raises its funds from the people of Australia, has fixed a developmental rate of4½ per cent. or 5 per cent. It is hardly of importance whether taxation funds are returned to the people through the activities of State Governments or local government authorities. I agree that it is not easy to allocate funds to meet the requirements of those two sets of authorities and of the Commonwealth as well. No-one would argue that either body should vacate its taxation field. They could not possibly be done in view of the way in which Australia is growing. State Govern ments and local government autho rities are confronted daily with problems which confront the Commonwealth only at very lengthy intervals. That is as it may be. The Minister has stated that the Premiers have complained that increases in the grants have been coming along too slowly. They wanted something done to speed up these increases. This seems to be a genuine complaint and I am left with the fear that the complaint might not be eradicated completely. There must be a good deal of flexibility in keeping grants more speedily up to the mark so that the States can deal with their day to day problems.

A good deal in the field of development seems to be left in limbo. There is much in the way of development that is not being tackled by anyone. For example, I have always been mystified by the lag in provision of sewerage in the capital cities of Australia. Sewerage is not a new service. I do not know how long it is since deep sewerage was introduced for the benefit of mankind but it must be 70, 80 or 100 years. Yet if you look at maps of Australian cities and projected development not only in the inner suburbs but in the outer suburbs, you get a tremendous shock when you see just how far behind normal development are plans for the installation of sewerage services. It seems that we are doing reasonably well - and I use the word reasonably advisedly - with the installation of telephones. We are providing electricity supplies and, in most cases, roads - although they might not be the best. But when the installation of sewerage is associated with development, people seem to throw up their hands in despair and say: “ We cannot cope with it “.

Sewerage is just as important a service as are the other services I have mentioned. Surely if this is a matter of money - and basically that is what is at the root of the problem - the Commonwealth should be looking at it. The Commonwealth should be saying to the Slates: “ You are not doing well enough. How soon do we move in?” I know that such a suggestion leads to the cry of unification and the complaint that it means getting away from the Federal system. But in the last few years we have seen that the Commonwealth Government no longer can pontificate on this question and say: “ This is within the region of the States”. This was said about education by the Prime Minister (Sir Robert Menzies) until a few years ago and then suddenly the right honorable gentleman said “ No, the States have to be helped with education “.

For years, the Commonwealth Government said that roads were a matter for the States but now the Government has promised to set up a Commonwealth Bureau of Roads. The fact that the Government has not done so yet is no surprise to the Opposition because this Government has never been very quick off the mark. But the Government is now saying that roads are becoming a problem for the Commonwealth. It is time the Commonwealth stepped in and looked at what is being done by other countries in improving their road systems. It would seem that some tiny countries are leaving us for dead. I do not think we will get anywhere with roads in the capital cities until we get overhead roads such as they have in Tokyo and the West Indies. Until this is done on the Commonwealth level, we will not make much progress. To say that this is a State matter does not hold water any longer.

Under the provisions of this Bill, the States will get by far the largest proportion of their revenue. The word “ assistance “ seems to be a beautiful piece of understatement. It is not assistance; it is almost the whole lifeblood of the State Budgets. We hold the purse strings. Such things as education, sewerage and roads must be taken more into the area of the Commonwealth day by day.

The Minister for Civil Aviation has pointed out that population figures to be used in calculating the grants for each year will include full blooded Aboriginal natives who were specifically excluded under the previous Act. The Minister said that this would be of particular interest to Queensland and Western Australia which have relatively large numbers of full blooded Aborigines. Soon we are to have a referendum to decide whether Aborigines should be included in the population figures. For how long has the Commonwealth Government hidden behind the Constitution and claimed that it has not had power to deal with this matter in relation to Aborigines? The interesting point in the context of this Bill is that although the Government will make grants in respect of full blooded

Aboriginal natives, it will not attach any strings to the funds so provided. The Commonwealth Government will not stipulate that this money must be spent for the benefit of the Aborigines. The Commonwealth is raising the money and feeding it out to the States. It is telling the States that they are receiving some of this money because they have Aborigines in their population, but the Commonwealth is not stipulating that the money must be spent for the benefit of the Aborigines. The Commonwealth is leaving it completely to the States. If this extra money is spent for some other purpose, the Commonwealth will not object. This expenditure is to be left to the conscience of the States.

If we are to have better roads and if we are to catch up with the lag in the provision of sewerage services, who is going to pay for them? Are we to have a sane system of taxation through a central body or are we going to leave it in New South Wales to those who play the one-armed bandits? In Western Australia are we going to leave the payment of taxes to those who go to the races and patronise the two-armed bandits? Are we going to wait for lotteries to be introduced in South Australia to pay for the progress we should be making instead of lagging behind. Is this going to be a bookmaker’s turnover tax? The only fair and sane way to raise taxation revenue for these purposes is by a system of central government taxation levied on those best able to pay. If it is not done in that way, there will be an overcharge on the services. Not only will we take sufficient money for our sewerage, water supplies and other services but by these dubious methods we will collect more because it is a good source of revenue.

We must remember that these things apply not only to the claimant States but to all the States. People in New South Wales and Victoria have as much right to look for development in their rich States as have the people in the claimant States. I shall have more to say about the needs of the claimant States in the debate on the next Bill and refrain from expanding on that subject in this debate, but the more one examines Commonwealth and State relationships, the more one thinks that the collection of tax revenue from the people and expenditure of that revenue on behalf of the people is something that the Commonwealth should do. The Commonwealth should accept more responsibility than it does. It is admitting this more from day to day.

We should get away from the thinking of the days before 1942 and bring ourselves up to date with our thinking. We have to get ahead of the thinking in 1942 when uniform taxation was introduced and we should be doing it without having the Constitution hanging over our heads. We should get away from the dogma and the shibboleths that we must have this or that arrangement by way of Commonwealth taxation and that the Commonwealth should not be intervening here or there. We should be getting away from the dogma that has been holding us back for so long. If we do that, the Commonwealth must accept more responsibility. It must not be pressing the States and pushing them into doubtful forms of taxation. The Commonwealth Government should be saying courageously to the people: “ This is the rate of taxation we must levy. This is the amount of revenue wc must collect. This is what we are going to do with the money “. The Government must make it known that, on its judgment after receiving expert advice, those with the broadest shoulders in a financial sense and best able to pay will provide the taxation revenue.

Senator LILLICO:
Tasmania

– At the outset, I want to say I think it is a great pity that the verbatim reports of the conferences at which the formula under discussion was agreed to by the State Premiers are no longer available to the members of the Senate. It is highly desirable that the views of the Premiers and of the Commonwealth expressed at those conferences should be made available to honorable senators when they are discussing a measure such as the Bill now before the Senate. Honorable senators would then know the attitude of the Premiers towards Commonwealth and State financial matters and have some knowledge of what actuated the Commonwealth Government. At one time, reports of these conferences were made available to honorable senators. In my opinion, that is an undesirable departure. I believe that in this House, which purports to be the House representing the States, it is necessary in order to achieve a complete study of the relationship that exists between the Commonwealth and the States that, as formerly, the reports of the Premiers’ Conference be available to all honorable senators. I understand that the practice has been discontinued and that it is impossible to obtain the reports. Such a proposition is most undesirable inasmuch as it does not concede to members of this House the right to have the fullest information available.

I agree with Senator Willesee that it is almost ridiculous to talk about the return of taxing powers to the States. Uniform taxation has become an integral part of CommonwealthState financial relations. In fact, the Premiers themselves set their seal upon it in 1959 at the Premiers’ Conference which produced the formula by which reimbursements were made to the States for five years. The Premiers, when they met at that Conference, were greatly dissatisfied with their financial dealings with and grants from the Commonwealth. I believe it was the then Acting Prime Minister, Mr. McEwen, who submitted the formula which was unanimously accepted by the Premiers. The formula contained a betterment clause which provided for an increase in grant to each State commensurate with the increase in wages that had taken place. Another clause provided for an increase in grant commensurate with increases in population. At that Conference, the question of uniform taxation was discussed. None of the States proposed with alacrity as that the taxing powers be returned to them. The formula was retained for five years. The Premiers met in June last year, and later another formula was agreed to. This formula is more generous than the preceding one as it contains a 1.2 betterment provision which is not tied to increases in wages. It also contains a provision to enable increases in population to be determined more speedily. That was agreed to unanimously, I think, by the Premiers.

While I might agree that, as Senator Willesee says, the States are forced to resort to forms of taxation which he claims are not desirable in some respects - I would add that his statement is arguable because there are people who consider that taxation on gambling is a desirable form of taxation. However, that does not alter the fact that the system of uniform taxation has many undesirable features. I do not think there is any doubt whatever that it leads the States into prodigalities. The mere fact that the States are not responsible to their own citizens for the money they expend brings about the position that it would not pay any State Government so to arrange its finances as to have a considerable surplus at the end of a financial year. The order of the day is for a State to produce a deficit. Instead of making an adjustment to correct that deficit a State’s first action is to cry to the Commonwealth for more and more financial assistance. Senator Willesee said that the Commonwealth would have to accept more responsibility for this expenditure. That statement prompts me to ask: If the Commonwealth accepts more and more responsibility, will not this raise the question of whether or not the existence of the States as we know them is justified? Sooner or later the position must be reached when, aggravated by the States, the Commonwealth will say: “ We are responsible for this, that and the other thing. We are expected to foot the bill for, or to assist the States to meet, nearly every avenue of State expenditure. We have to accept the financial responsibility. Surely it is a fair and reasonable proposition that we should accept financial responsibility for jurisdiction as well.” That is the situation which, I am afraid, will be reached eventually. I believe that is the system, or something very like it, that has operated for a long time in the Dominion of Canada. But in this Commonwealth, under the existing set-up where six allegedly sovereign States are responsible only partly to their own citizens for the money the expend, the position is aggravated by the States through their continuous clamouring to the Commonwealth for more and more money. Each State should take a look at its own house and attempt to put it in order. I verily believe that there is plenty of scope for this and that sooner or later more and more power must gravitate to the central government at Canberra.

In my opinion, the Tasmanian Government has been well treated in the allocation of grants. Never before in the history of the Commonwealth has there been a government in Tasmania in a better financial position than the present Government. Never before has any government been able to play the part of the benefactor as the existing State Government has played it. All grants paid to Tasmania by the Commonwealth have been increased considerably. At the same time, we have a position that requires examination. Senator Willesee mentioned local government. In Tasmania, the State Government has foisted more and more of its responsibility onto local government.

Senator Henty:

– But not the money - not road grants.

Senator LILLICO:

– No, local government does not get that money. On the last occasion when I looked at the relevant figures I noted that “in Tasmania local government received for general maintenance purposes about 7 per cent, of the total amount that was paid to the State Government, in spite of the fact that, on a population basis, the road grant to Tasmania was quite generous. Over the years the Tasmanian Government has made the municipal councils - in other words, one class of people, the ratepayers - responsible for ambulance services, inoculation for various forms of infectious disease such as diphtheria and poliomyelitis, and library services. All these functions properly belong to the general taxpayer and to nobody else. The State Government cannot have it both ways; it cannot clamour for more money from the Commonwealth for practically every sphere of State expenditure and, on the other hand, continually foist onto local governments functions that do not properly belong to them.

An amazing example of the State’s approach was provided by the State Minister for Education, Mr. Neilson, over 12 months ago when the Commonwealth Government decided to make grants for science blocks in secondary and technical schools. A case was put up by the Minister for Education and, to my amazement, by the Commonwealth Treasury. First, they said that grants to secondary schools should be based on secondary school enrolments. That would have been quite favorable to Tasmania. Because of the system that operates in that State, proportionately we probably have more secondary school enrolments than has any other State of the Commonwealth. On the other hand, Tasmania has very few technical school enrolments. Indeed, Tasmania lags behind the rest of the Commonwealth badly in this respect; technical school enrolments are very low indeed. But in regard to technical schools it was claimed that the grants should be in reverse ratio - that greater amounts should be paid to States with few technical school enrolments. The State cannot have it both ways.

Under the present financial system, with the States not responsible to their own taxpayers, the first thought seems to be to ask the Commonwealth to provide more money for expenditure in various directions. The resultant improvidence is not a good feature of the uniform taxation system. When I say that, I am not putting forward any remedy, because I do not think there is one. This is one of the evils which I think is inherent in the system. I have no doubt that if a thorough stocktaking were made of Tasmania’s finances by competent people, State expenditure could be revolutionised.

Senator Kennelly:

– Is that not done by the Commonwealth Grants Commission each year?

Senator LILLICO:

– The Grants Commission has been set up to deal with the provision of additional money for the two claimant States. It has nothing to do with general tax reimbursements.

Senator Kennelly:

– It must have a look at the States’ finances.

Senator LILLICO:

– It does. It looks at the way in which the State expends its money. It also looks at State taxation and lays down that State taxation in Tasmania and Western Australia must be on a par with State taxation in the standard States. Similarly, it looks at the expenditure of the two claimant States and of the standard States. But it has nothing to do with the actual system of government or the way in which the State Government expends its money.

I do not know what will be the end of the uniform taxation system. I believe that a mighty step towards unification was taken when taxing powers were reposed completely with the Commonwealth. Not many years ago the present Prime Minister (Sir Robert Menzies) said that there was not a pecuniary impost, government or semigovernment, in relation to which the Commonwealth could not take precedence if it chose to exert its authority. Be that as it may, to all intents and purposes power to raise the Commonwealth’s finances has been centralised in the Federal Parliament here in Canberra. It seems to me that, regrettable as it may be, in the course of time this centralisation of power will have repurcussions on our Federal system of government. I have always advocated the States having the right to control their own finances, but I concede the impossibility of putting the clock back and of reverting to the old system of State taxation. That system has gone for ever. The Premiers themselves do not want it back.

The present system is helping to intensify the States’ clamour for the Commonwealth to take over more State responsibility. If that trend continues, sooner of later it must result in the abolition of the Federal system as we know it. When I say that I do not suggest for one moment that the Commonwealth should be blind to the need for development in all the States. Indeed, it has shown that it is not. Nonetheless, the States have a duty. They should set their own house in order. As I have already indicated, their first recourse now is to go to the Commonwealth to get something extra to help them out of their difficulties. That is the easy way.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I listened with very great interest to Senator Willesee and indeed to Senator Lillico. I agree with both of them in several respects, particularly in regard to their assertion that the uniform system of taxation is here to stay. The Commonwealth now does not even make the pretence of imposing the condition that reimbursements to the States is dependent upon their abstaining from the field of income taxation. I would go further than Senator Lillico and say that not only would the State Premiers not seek to reverse the present practice; neither would, I think, the people of Australia. There simply is not elbow room for the States to come in at the rates that the Commonwealth levies and, above all, the rates which the Commonwealth must levy in a time of emergency, particularly a time of war.

The Constitutional Review Committee addressed itself particularly to financial relations between the Commonwealth and the States. We had hoped to find a formula where, everybody else had failed. We came to the conclusion that that was not possible and returned to a starting point that I recall I established in the Senate in the early 1950’s- after the 1949 election- when I addressed myself here on many occasions, primarily to get the senators who came into the Senate at that time interested in this very important matter, to the question of Commonwealth and State financial relations. I stated the proposition on many occasions, and it has been proved right since, that no form of grant - no formula - will remain static for very long. Circumstances change, new demands on governments are made and it is inevitable that the course mentioned by Senator Lillico must develop where the Commonwealth becomes increasingly active in particular fields. It is discharging a national responsibility. Those trends will be augmented and not decreased by the continuous growth of Australia’s nationhood.

We must never overlook the fact that we arc one nation, with one economy, and with an extraordinary homogeniety of people, customs and language throughout the whole nation. We want to preserve that state. Senator Lillico rather indicated that the Tasmanian Government was specially favoured; that governments generally, under income tax reimbursement, tend to be rather lavish and not to aim at the desirable end of achieving a surplus in their Budgets. I think that view is rather narrow on several counts, the first of which was mentioned by interjection by Senator Kennelly; that is, that there is a Commonwealth Grants Commission whose guiding principle is simply to bring the States that come within its purview today - Tasmania and Western Australia - up to a standard not appreciably lower than that of certain mainland States selected for the purpose of establishing the standard.

Regardless of how the Tasmanian Government or the West Australian Government or, in fact, any government, uses the funds that are made available under the Bill we are now considering, it is completely clear in view of the size of the grants recommended by the Commonwealth Grants Commission, that neither Western Australia nor Tasmania, despite the grants made under this Bill, is able to function at a level not appreciably lower than that of

Victoria and New South Wales. Accordingly, the fact that the Commonwealth Grants Commission recommends grants totalling about £20 million this year - speaking from memory - as representing the needs of Tasmania and Western Australia, in addition to the funds that are made available under this Bill, is the clearest proof, on the face of it, that those Governments are not lavish. They are subjected to the closest scrutiny by the Commonwealth Grants Commission. Every detail of their Budgets is examined against the comparable items both of receipts and expenditure in the Budgets of the standard States.

Senator Lillico:

– They are free to act as they see fit as to the way they spend the money.

Senator McKENNA:

– Yes; but I suggest to the honorable senator that that is not a matter for complaint.

Sitting suspended from 5.45 to 8 p.m.

Senator McKENNA:

– As the Senate knows, I came into this debate by accident; but now I find that my interest has been stimulated and there are four or five matters on which I wish to say a little. The first is the history of Commonwealth-State financial relations. It might be as well just to run through about nine features. Originally, section 87 of the Constitution provided that the Commonwealth should apply threefourths of all the revenue that it collected from customs and excise duties to payments to the States. That operated from 1901 to 19.11. The relevant amounts were paid during those years.

Next, a grant of 25s. per head of population was made to all of the States. That represented the Commonwealth’s subvention to their budgets. Thirdly, we had the very important Financial Agreement from 1927 to 1929. It completely revolutionised Commonwealth-State financial relations. Under it the Commonwealth handled loan raising and undertook to make certain payments to the States - £7i million a year in respect of interest and one-half of the sum that each State had to contribute in respect of the principal of the loans. It is rather interesting to see that year by year the contribution in respect of the interest on State debts owing as at 1st July 1927 has remained static at £7-1- million. Then we came to the establishment of the Commonwealth Grants Commission - another great milestone and a tremendously useful contribution in the field of CommonwealthState financial relations.

In 1942 we saw the introduction of the system of uniform income tax, with reimbursements. This was nol done under any agreement but was enforced by the Commonwealth against the will of the Stales in the emergency of war. There was nothing else to be done. I recall that the scheme was evolved in the meeting room beneath the President’s suite. I think it was the brainchild of men such as Professor Mills, Mr. Scullin and Sir Patrick McGovern. Although the system was forced upon the States at that time, they settled down very happily under it. Being unable to undertake any great developmental works during the war period, even with the very modest grants that were made - they ran to only about £34 million a year in that periodthe States finished up with a very handsome surplus of about £75 million among them at the end of the war. It is rather laughable to look back at the size of the figures in those years and to compare it with the magnitude of the figures that we are considering today.

Then in 1944 a very important amendment to the Financial Agreement was effected by the Parliament. That amendment enabled the States to fund the debts and deficits that they had contracted during the depression years. The Commonwealth, under no obligation to do so, offered to make a contribution to payments of principal and interest if the States agreed to a funding of the debts. That came as a very great relief to State budgets. Then in 1946 came the first of the income tax reimbursement agreements. The upset amount of the grants was fixed at £40 million. It was intended that the formula should run from that base for a period of 10 years. But in the very next year the upset amount jumped to £45 million. That indicates that Commonwealth-State financial relations do not remain static for any great length of time. In 1948 there was a change in the calculation of the adjustment that was made on account of an increase in average wages. Whereas the formula began by allowing only half of the increase, just two years later the full increase was used in calculating the grants. From then until 1959 - a period of 1 1 years - that formula operated.

It is very interesting to look at Table No. 4 on page 168 of the Thirty-second Report of the Commonwealth Grants Commission. It sets out payments by the Commonwealth to or for the States. In 1945-46 the financial assistance grants made pursuant to the formula about which I have spoken were £35.6 million. Working solely on the formula, by last year they had reached £340.6 million. To people who are interested in Commonwealth-State financial relations, I suggest that the figures on that page are of enormous interest. They show the payments made under every conceivable heading. They show that since 1945-46 the total payments to the States under all heads have risen from £74 million to £509 million. Taking the introduction of uniform taxation as the starting point, they have risen from £45 million to £509 million. In the financial year just concluded the total subvention by the Commonwealth to State budgets was 11 times higher than it was in 1942-43. That gives an idea of how the payments have grown. It also shows the great elasticity of the formula that was evolved in 1946. I see Senator Scott smiling as much as to say: “ I have heard this story before “. I should like merely to refresh his memory and to add that I am very proud of the flexibility of that formula. I had some small part in settling it between the Premiers and the Commonwealth in that post-war reconstruction period.

I want to take up a point that Senator Lillico made. He referred to the fact that from 1963 onwards we have not, as formerly, had the notes of the Premiers’ Conference made available to us. I made my own inquiries about this matter some time ago. I was exceedingly disappointed to find that these documents were not available. I was told that they were not available because of the desire of one or more of the Premiers that they be treated as confidential. I should like the Minister in charge of this Bill to tell us, before the debate concludes, in respect of each of the last three years, by which Premiers and by how many Premiers the request was made, and to give us some indication of the reason for it.

It is quite clear that in the Premiers’ discussions, which deal with many matters, no question of security would be involved. Therefore, it can be only for the comfort or the convenience of the men who constitute the Premiers’ Conference that it has been decided to withhold the record of its proceedings. It seems to me that a completely wrong view of the matter is taken by all concerned, including the Commonwealth, because, even if the Commonwealth did not ask that the record be suppressed or not be made available, it has concurred in the request of one or more Premiers. I object to the withholding of the records first on the ground that I find them very interesting and very informative and, secondly, on the very important ground that when the Premiers and the Commonwealth representatives get together to discuss matters affecting the Commonwealth, they are not engaged on private business; they are engaged on public business. We in this Parliament have the right, in my view, to know what goes on at the Premiers’ Conferences. We read speculation in the Press. From prior experience we know that hard bargaining takes place, and, according to the Press, hard bargaining took place in some very peculiar circumstances at the last Conference. We know that Queensland came out of the Conference a coot £1 million per annum ahead on the formula, and that the Premier of Victoria, Mr. Bolte, came out with a cool £600,000 per annum. Those amounts go into the grants and they will be built upon down the period of five years for which this agreement is to run.

On behalf of the Opposition I record a very strong protest against the nonavailability of those documents. I hope that the Minister will give us full information and supply details as to who sought their retention. Unless there is a thoroughly satisfactory explanation - and the Senate ought to insist upon it - I regard the whole procedure as being outrageous.

Senator Wright:

– As to the £600,000?

Senator McKENNA:

– No, as to the suppression of these reports. I am speaking of the non-availability of the Conference reports for the last three years. I am not speaking of the details at all. I am speaking of the withholding of all the documents. I cannot see any really sound reason for their suppression.

Senator Gair:

– Premiers’ Conferences are usually held in public.

Senator McKENNA:

– I have known them to be held in public all the time. Of course, the meetings of the Australian Loan Council are held in camera for the very good reason that business considerations could be so enormously affected by knowledge of loan programmes and rates of interest contemplated. That is understandable. It is even understandable that something might arise in a Premiers’ Conference which, for very good reasons, should not be made public. If there is an individual item like that, let the Premiers’ Conference decide to go into committee and let it be shown on the record that it went into committee to discuss a particular matter. I would not deny the Conference the right in a particular set of circumstances, not all of which we can foresee, to go off the record. But to suppress the whole of the proceedings of the Premiers’ Conference is, in the view that I have put, quite wrong.

I have only one other matter to which I want . to make brief reference. The Treasurer (Mr. Harold Holt) in the course of his second reading speech referred to three elements upon which the Commonwealth made money available to the States. He pointed first to the general revenue grants, then to the grants that are made for specific purposes under section 96, and finally pointed out that the Commonwealth accepts responsibility for ensuring that sufficient funds are made available to the States for works and housing programmes agreed to by the Loan Council. Going on from that point, I refer to page 10 of the annexures to the Budget Speech, which shows that what otherwise would have been a surplus on Consolidated Revenue of £126.7 million was used to help finance matters outside the Budget including, very largely, the amount of £288 million which the States needed for their works and housing programmes. I do not for one moment object to the Commonwealth helping the States in those important matters. The work must go on. Those who want to see the picture into which the £126.7 million fitted will find it on page 10 of the annexures to the Budget Speech.

I next refer to the document entitled “Commonwealth Finance 1964-65 Bulletin

No. 3 “. But before I approach it, I should say that the £126.7 million was translated out of Consolidated Revenue into a trust fund called the Loan Consolidation and Investment Reserve. That particular account is listed, amongst others, in the Bulletin to which I have referred. Page 21 shows that there was a balance of £345.5 million as at 30th June last. To that has to be added another £126.7 million. Now I turn to what has happened to that fund. I refer to the Auditor-General’s report for the year ended 30th June 1965 and in particular to page 51 of the appendices to his report where the various trust funds and their investments are set out in detail. The balance of £345.5 million in the Loan Consolidation and Investment Reserve has been invested in Commonwealth bonds at rates of interest ranging from 4 per cent, for short term bonds to 5i per cent, for long terms bonds. The one exception is that £79,100,000 has been invested in Treasury bills. The great bulk of the money that comes out of Consolidated Revenue is paid into the reserve account, money from which is then lent to the Commonwealth and is replaced by Commonwealth bonds.

It is an intriguing situation that the Commonwealth is both the borrower and the lender. The effect on the States, which is the point to which I am leading, is that that money goes to help them with their works and housing programmes for the year. Under the Financial Agreement they are under an obligation to repay portion of the principal down a term of 53 years, and they are obliged also to pay interest on whatever money is made available to them. There was a balance of £345.5 million outstanding as at 30th June 1965. That process is repeated with the £126.7 million that will be taken out of Consolidated Revenue this year and used to help the works and housing programmes.

I merely make the point that it seems weird to me that the people are taxed in order to find the £126.7 million; the Commonwealth then lends the money to itself and is obliged to raise further money to pay interest on it to itself: and the States are obliged to treat the whole thing as a loan and, amongst other things, to tax their own people to pay both principal and interest, or the Commonwealth has to come to their aid in grants of this kind through the Com monwealth Grants Commission. What can be done? At least two things are obvious. Instead of the Commonwealth going through this tortuous process of borrowing and lending money to itself, why could not the amounts represent plain straight out grants to the States or, alternatively, why could not a large amount of the public debt of the States be cancelled and thus relieve the States of the burden of finding the principal and interest?

To give the Senate an appreciation of this position, during the suspension of the sitting for dinner I calculated what would be the financial obligation on the States in respect of the £345.5 million outstanding to the credit of the Loan Consolidation and Investment Reserve account as at 30th June last. So at an average rate of 5 per cent, on the £345 million, they would have to pay, per annum, interest of nearly £18 million. To that will be added, by reason of this year’s transactions, another £26 million, bringing their total liability with interest up to, perhaps, £23 million to £25 million. They have to pay 10s. per £100 off the principal under the Financial Agreement. By and large, spread over all of the States, that is a pretty heavy commitment.

Senator Wright:

– Are not all of these sums under the Financial Agreement?

Senator McKENNA:

– Once we have created the position with loan moneys, yes.

Senator Wright:

– Then we pay into sinking fund and we pay interest, do we not?

Senator McKENNA:

– We do, but where is the need to have anything under the national debt sinking fund at all? I put this to the honorable senator: Suppose this year, instead of filtering the £126 million into the Loan Consolidation and Investment Reserve Account and then investing it in Commonwealth bonds, we paid the amount direct to the States with no obligation to repay and no interest charge to meet. That is one alternative approach.

Senator Mattner:

– Would that be a gift?

Senator McKENNA:

– It would be a gift. What is the amount of £377.5 million, which is to be provided by this Bill, but a gift to the States to use as they wish, unconditionally?

Senator Wright:

– lt is a re-allocation of moneys that they would have been entitled to but for uniform taxation.

Senator McKENNA:

– I am answering the interjection that Senator Mattner made.

Senator Wright:

– And I am giving a cross answer.

Senator McKENNA:

– The honorable senator is making a diversion, I suggest. The alternative would be for the Commonwealth to cancel the debt. Why could it not cancel every one of the bonds held by the Loan Consolidation and Investment Reserve Account? Who would be hurt? The Commonwealth owes it to the Commonwealth. No individual in Australia would be hurt. There is the problem of apportioning it equitably and fairly between various States, easing their share of their national debts. But I refuse to believe that it is not possible to evolve some formula to carry out an equitable arrangement. I mention this not for the first time. 1 have raised this matter quite often and in much more detail, but being projected into the discussion unexpectedly I felt that I should not by-pass the opportunity just quietly to direct attention to it again.

There may be a further alternative that I have not put before the Senate, but I would think it would be well worth the Senate’s while at some time really to look into what is involved in this rather extraordinary procedure and to see whether something can be done that would achieve the same purpose - provide money to the States and not entangle them in the need to find from £18 million to £25 million a year in principal repayments and interest charges. In truth, what they are paying interest on and what they are repaying are their own moneys, paid in taxation. That is what it comes down to.

Senator Gair:

– “ Reimbursement “ is a better term than “ grant.”

Senator McKENNA:

– I would accept that, but as the only thing that we can do is to make payments to the States under section 96, I am following the wording of the empowering section, which talks about them as grants to the States, with or without application. I agree that the sense of them is of reimbursement. The States stay out of the income tax field and they meet the convenience of the Commonwealth. The grants are provided for the great convenience of the people. Therefore, getting away from the strictly technical term, I consider that “ reimbursement “ is the right word for this type of grant. I would not dispute that for a moment.

By and large this grant is a great improvement. The betterment factor is struck on a new and improved basis. That is a reasonable approach in the field of Commonwealth and State financial relations. It is one thing to say to a State: “ Here is the money to let you carry on only at the same level at which you have always carried on “. There is surely a need for progress, to branch out into new activities and new fields, and anything that is in the nature of a betterment allowance does have that effect. Therefore, one welcomes that main change in the formula applying to these grants. Nobody can see where the course will take us in this Parliament in doing justice to the States, but for the time being it is bedded down, and circumstances might really blow it sky high at any time in a way that none of us can foresee. The theme that I have developed from the first time I looked at Commonwealth and State financial relations is that we cannot make any arrangements or determine any formula that will be stable over a long period of years. We need a great deal of flexibility in the field.

Senator Wright:

– The formula of 1959 has worked pretty well.

Senator McKENNA:

– Yes, and the one before it rose, as I have indicated, from £34 million to over £345 million.

Senator Wright:

– But that was not under the formula at all. Ad hoc arbitrary annual grants were made from 1950 to 1959.

Senator McKENNA:

– The formula in 1959 was only a relatively slight variation from the one that was introduced in 1946. The main principles were still held. To show how flexible it was, I mention that it went from £35 million in 1945-46 to £340 million in the last year. But here is the point that I make. Flexible as it was, it was not flexible enough. The next column of the table, headed “ Special Grants under Section 96 “, shows that the Commonwealth had to keep on coming to the aid of the States over and above the formula. The

Senate will remember the discussion that we had in this place quite recently about the additional assistance grants of £20 million per annum. So it did not stay really settled. Elastic as it was, there had to be subventions to keep the States on an even keel and keep them moving.

This is one Bill, as Senator Willesee indicated, that we support. We do not oppose the measure and we propose no amendments. We hope to stimulate the Government, not in this debate but on some future occasion, into letting us have a good look at what we are doing with the Loan Consolidation and Investment Reserve, why we are doing it, and whether some arrangement that would have better effects for the States could be designed. I hope that the Minister will not forget the proposition that I put to him regarding withdrawal from our scanning of the Premiers’ Conference reports. I hope that he will tell us something about that with as much detail as he feels can be made available.

Senator LAUGHT:
South Australia

– I rise to support the Bill. I was very interested in the remarks made by the three preceding speakers. This is a Bill for the payment of financial assistance grants to the States. Being a senator from South Australia, I was very interested to see how South Australia had been treated. In 1964-65 financial assistance grants to South Australia totalled £39 million. In the current year they will be £43.25 million, which is a rise of £4.25 million, compared with a rise of £37 million over the whole of Australia. I am satisfied that South Australia is receiving its adequate share. Its population is about one eleventh of the population of the Commonwealth and it is receiving one ninth of Australian rise. To my way of thinking, that shows that the Commonwealth has treated South Australia adequately. South Australia has also received a fair proportion of the loan programme. This new formula rather appeals to me because it takes account of the respective populations of the States and the current wage rates and has a betterment factor. Possibly as a result of some horse trading, the Premiers devised a formula by which Queensland will receive £1 million a year for the next five years over and above its set allocation, and Victoria £600,000.

Like other honorable senators, I regret that we do not have a transcript of the proceedings of this important Premiers’ Conference. These meetings are not held in private. Some years ago I happened to be in Canberra when the Premiers were holding their conference and I sat in- and listened to all that 1 wanted to hear. When the Premiers return to their respective States they are questioned in the State Houses of Assembly on the proceedings of the Conference. We can well imagine that Sir Thomas Playford, at present Leader of the Opposition in South Australia and prior to that Premier for well over 20 years, put some very pointed questions to Mr. Walsh, the present Premier of that State, very soon after Mr. Walsh’s return from the Conference. No doubt Mr. Walsh attempted to answer the questions that were asked of him.

There is nothing confidential about Premiers’ Conferences. I am amazed that a copy of the transcript of the proceedings of the last Conference is not made available to us, because it is important that all honorable senators should know why Queensland will receive an additional £1 million a year and Victoria an additional £600,000. We all would like to know also whether anyother States sought a special allocation and what discussions took place on that aspect. I urge the Minister to bring this matter to the attention of the Prime Minister (Sir Robert Menzies) so that it can be resolved and so that in future, when the Senate is considering a Bill such as this, a full transcript of the proceedings of the Premiers’ Conference will be before it.

I should like to highlight to the Senate one or two passages of the Minister’s second reading speech. He said -

It was agreed that both Western Australia and Tasmania would continue to be eligible to apply for special grants, but it was made clear that, so far as the other States are concerned, it would be a condition of the new arrangements that they remain non claimant for the period of the arrangements. In the light of the special arrangements made to increase Queensland’s share of financial assistance grants, and of the demonstrated ability of South Australia to progress as a non-claimant State, it does not seem appropriate to continue to discriminate as between the four non-claimant States.

Certainly quite a tribute was paid to South Australia when the Minister referred” to “ the demonstrated ability of South Australia to progress as a non-claimant State “. I shall have something more to say in my concluding remarks about the ability of South Australia -to progress. At any rate, that is where South Australia stands at present. It is a non-claimant State. I was very interested in the Minister’s fervent hopes expressed in these words -

I feel confident that the improvements in the financial assistance arrangements which were agreed with the States in June, and which 1 have outlined to the Senate today, will make an important contribution to assisting the States, both individually and collectively, to continue to raise the standards of their services. We are all aware of the important role which the States play in providing such basic community services as education and public health.

Looking at the matter from the viewpoint of South Australia alone, the additional grant of £4i million should cover the increased cost of the services the State is supplying. I think the States should be reminded, as the Minister reminded them in the final paragraph of his second reading speech, of one important aspect. This is what he said -

Let me say in conclusion that by accepting the increased financial commitments to the States under the new agreement, the Commonwealth has placed a not inconsiderable burden on its own budget, particularly as this happens at a time when we are faced with heavy and increasing expenditure commitments in other directions.

It should be remembered that in this Budget payments to the States amount to £555 million. This is by far the largest item in the Budget, even taking into account commitments for defence and social services. I take up the point that the States still do not appreciate the fact that the Commonwealth has to go through the turmoil of collecting a huge amount of money in the form of income tax, for which it takes responsibility and for which it has to bear all the odium from the electorate, and then allocates a large part of that money to the States.

Senator Lillico, I thought, made a very valid criticism of the system of uniform taxation. He stated, quite rightly, it leads to prodigality by the States. They have no responsibility for raising this £555 million. Apparently their only concern is to be unpleasant and to make incessant complaints about the amounts being allocated to them by the Commonwealth. Some of these aspects have brought a very queer reaction from the South Australian Government. Admittedly it is a new Government, elected by the people in March of this year, but it has developed no sense of financial responsibility that I can see. It will receive from the Commonwealth nearly oneseventh of the loan moneys and one-ninth of the grants, whereas, on a population basis, its proportion should be only oneeleventh. So it is well ahead in relation to loan moneys and nearly as far ahead in relation to grants. It would be well for the Senate to examine for a minute or two the recent reaction of certain South Australian Ministers to grants in general and, in particular, to the grant that we are now discussing.

To the credit of this Commonwealth Government, it has taken a very keen interest in tertiary education. As is well known, the Australian Universities Commission makes a detailed examination of the requirements of State universities every three years. The Commission goes into the whole question with the relevant State Governments. It hears evidence, it makes inspections, it investigates the future requirements of State universities and then it produces a report. The Prime Minister, being the Minister in charge of the department of the Commonwealth Government interesting itself in university education, considers this report. He has invariably recommended the report to the Parliament in the form in which it had been drawn up. In other words, the Government uses no political pressure in this matter. It recommends the report in the full knowledge that the States concerned have furnished the evidence upon which the Universities Commission bases its report.

One item appeared in the report three years ago; possibly the evidence was taken four years ago. I refer to the new university to be built at Adelaide at Bedford Park. The new name for this university is the Flinders University but I shall continue to call it Bedford Park in my speech. A sum of £220,000 was budgeted for by this Government to complete a hall of residence for the University at Bedford Park. This was dealt with by the previous Government of South Australia under Sir Thomas Playford and I understand the money was set apart. Imagine my surprise the other day when, on asking a question of the

Minister in Charge of Commonwealth Activities in Education and Research (Senator Gorton), I was informed that the present Government of South Australia had not consented to take up this £220,000 for the construction during this triennium of a hall of residence at Bedford Park. The Minister said he understood also that only £20,000 would be taken up by the South Australian Government.

This shows complete irresponsibility on the part of the State Government. The Playford Government had agreed to act on its agreement with the Commonwealth Government two years or 2i years ago. The money was allotted in this triennium and now, right at the end of the triennium, the Labour Government of South Australia is unwilling to take up more than £20,000 in this triennium. This is a case of irresponsible finance in some direction. The South Australian Government has spent the money allotted for this work on some other purpose, and consequently the students of the new university at Bedford Park will be denied a hall of residence. It is a very serious matter when, through the irresponsibility of a State government, nearly a quarter of a million pounds of Commonwealth money will not be availed of and the young people who otherwise would have been in residence, providing an important part of the student life of the Bedford Park University, will not be in residence.

Another item is worthy of mention concerning the irresponsibility of the South Australian Government in these matters of finance and Commonwealth grants. This matter was raised in a question asked recently by my colleague, Senator Davidson, of the Minister in Charge of Commonweath Activities in Education and Research. This question followed the publication in the Adelaide “ Advertiser “ of an account of a television speech made by the Minister for Education in South Australia, Mr. Loveday. The burden of his televised speech was that the University of Adelaide might have to forgo £60,000 from its 1966 budget because apparently the State Labour Government is complaining bitterly over the amount of money the Commonwealth is making available for research grants.

The situation is that the South Australian Government, in order to match the research grants, would have to find about £148,000 and apparently it was unable to find that amount. In his answer to me, Senator Gorton said if the South Australian Government found a portion of that amount, the Commonwealth Government would match whatever portion the State Government found. Apparently the South Australian Government will find the full amount now but it will punish the University of Adelaide next year to the extent of £60,000 from its budget in order to match the Commonwealth money being provided for these research scholarships. I point out that this is another example of inept financing in the handling of matching money for Commonwealth grants.

What concerns me about the present South Australian Government is that, all along the line, it appears to be missing out in connection with the progress of South Australia. Under Sir Thomas Playford, South Australia had a magnificent history from 1935 onwards. At that stage, a great effort was made to rehabilitate the finances of South Australia. It ceased to be entirely a primary producing State and became well balanced with industrial activity as well as primary production. As a consequence, over the years it has been able to contribute to Commonwealth revenue very large sums through its exports of primary products and of manufactured goods as well. The unemployment rate in South Australia has usually been either the lowest or the second lowest in the Commonwealth. This was apparent particularly over the critical years around 1960 when the unemployment rate in South Australia was the lowest or second lowest in Australia. All this was done by virtue of the tremendous drive of the Premier of the day, Sir Thomas Playford, and the fact that industries were being attracted to South Australia. Industry was attracted because housing was the specialty of Sir Thomas Playford through his Housing Trust. He made housing available to those commencing industrial activities.

The South Australian Chamber of Manufactures is very concerned. The President of the Chamber, Mr. E. M. Schroder, made the following statement which was published in the “ Advertiser “ last Friday -

The South Australian Government seems determined to join in reinforcing these inflationary pressures produced by the weather and tightness of credit.

At the beginning of the financial year, there was an increase in water rates, fares and charges. There has since been an increase in registration fees of almost all kinds- from company registration through the whole list of charges.

Since Parliament bas assembled, bills have been introduced to reduce the effective carrying capacity of motor trucks and to add to the existing ton-mile road tax an indefinite charge to be credited to a railways fund.

These factors have hit home on the Chamber of Manufactures. It realises that the cost of all the things its members are producing has risen because of these charges and the legislation which has been introduced. The article refers also to increased stamp duty on cheques, receipts and documents. Wharfage rates, I understand, have been raised. Wharfage, which was normally just a service, has been turned into a revenue producing phase of government activity to the extent of £600,000. All of these things add to the cost of goods and lessen the effectiveness of export activities. The article continues -

All of these increases in the cost of operating in industry and commerce could have only one result - a slowing down of the economy with a consequent increase in the cost of production of each product unit.

Mr. Schroder goes on to warn that this is the beginning of a downturn for South Australia if the State Government persists in raising these charges. Consequently, when we are discussing this Bill relating to the money that is being handed over to the various States, I think it is appropriate to draw the attention of the Senate to what is going on in one’s own State. The Commonwealth will suffer if South Australia suffers because South Australia has one-eleventh of the population of the Commonwealth. If the downturn in South Australia persists because of ineffective State government, it will be a serious matter for the Commonwealth. I bring these matters before the Senate tonight. I support the Bill. I agree with Senator McKenna that some thought should be given to the matter he raised - the interest being paid on the fund money.

Senator BISHOP:
South Australia

– We have just heard a remarkable speech from Senator Laught. In my opinion, it constitutes an attack upon the South Australian Labour Government. Obviously Senator Laught resents the fact that there is a Labour Government in South Australia. It seems to me that he has descended into the political gutter. I make that statement having full confidence in what I am saying.

Senator Wright:

– The political what?

Senator BISHOP:

– The political gutter. Senator Laught’s responsibility in the Senate, I take it, is to defend the interests of the State which he represents. His attitude tonight is in marked contrast to the attitude which members of the Opposition here took in relation to rail standardisation and other matters when the Labour Party was in Opposition in South Australia. Our policy was to assist as far as possible the then State Government irrespective of our criticism of the gerrymanders which allowed Sir Thomas Playford to run South Australia for many years. We took the view that we had an obvious obligation, quite apart from party politics, to preserve the interests of the State we represented. Who can challenge that attitude? It is the correct attitude to adopt. We took the initiative in the matter of rail standardisation, and it is quite clear that because of our protestations on that occasion Government senators had to give us some support. I can say with confidence that the Commonwealth Government came to help South Australia with the project much sooner than it would have done.

It is very bad for a senator on the other side of the House, who believes in the Senate as the States’ House and who also believes in the principles of the States’ House, to attack the Government which was elected by the people of South Australia. While the honorable senator might not like (he politics of the party in government in the State he represents, he, in common with other honorable senators from South Australia, has a duty to assist that State and not be critical on political lines when dealing with financial matters in relation to it. The real position is this: The Labour Party was returned to government after many long years of fighting against a system which would have kept it out of office but for the growing popular support it received. The Labour Party became the Government. When the Labour Party came into office in South Australia funds it required were not there because Sir Thomas Playford had overspent in the year prior to the election on various projects which he used as catchcries to win him political support. He spent extravagantly on all sorts of things in the year preceding the election.

When the Labour Party came into office, it had the responsibility to ensure that the Government could work with the finance that was available. It is strange indeed to hear Senator Laught speak about irresponsible financial arrangements, and then criticise the Labour Premier of South Australia for not receiving of the Premiers’ Conference the same sort of treatment as the previous Premier allegedly had received. The facts were contested in the South Australian Parliament with the Leader of the Opposition arguing that the amounts received were less than he had obtained in the previous year. I want to refute this statement and in doing so quote the words of a member of the Liberal Party. The reference is to the amount of money received from the Loan Council. I quote from page 1042 of the South Australian .” Hansard “ of August 17, 18 and 19, 1965. Mr. Millhouse said -

No other member on either side of the House has his ability to hold the attention of all honorable members; even the shining light on the front bench of the Government - the Attorney-General -cannot hold a candle to the Leader of the Opposition when he speaks in this place.

Mr. Millhouse continued in relation to loan moneys -

Although 1 have, I suppose, complimented the Leader of the Opposition so far in what I have said, I am not sure that I can altogether agree with him in his contentions. In fact, as was pointed out by the member for Glenelg (Mr. Hudson) in his rather long speech, the present Treasurer obtained precisely the same percentage of the Loan Fund for South Australia this year as was obtained last year - 13.71 per cent. I am proud to say .1 have worked this out myself, and that is why I interjected at one stage, “ 13.71 per cent.”, which was precisely the same percentage to the second decimal point as was obtained by the previous Treasurer last year.

Despite the arguments advanced to the contrary by Opposition members in the South Australian State Parliament, the fact remains that the Premier of South Australia, Mr. Frank Walsh, has done a sterling job even though he was the youngest, in terms of time in office, of the Premiers at the Premiers’ Conference.

What are other complaints about the South Australian Government? One complaint which has been made in attacking the Government is that it is going to introduce reforms. Of course the Government is going to introduce reforms. For many years we have had a government which believed in low wage principles and standards. I know something about these matters because I was concerned with them. The industrial standards established by that Government were almost the lowest in Australia. An incoming government had an obligation to improve those standards in order to assist the people of South Australia. I well remember, as honorable senators on the other side well remember, an application by Sir Thomas Playford to the Commonwealth Arbitration Court sitting in Adelaide in which he tried to obtain a lower country basic wage. Sir Thomas sent his advocate - I think it was the Under Treasurer - into the court to assist the case that a lower basic wage ought to be set in the country because workers in such places as Mannum were able to obtain firewood more cheaply than people in the cities could obtain it. This was the trend. As a result of this attitude, important social legislation was never introduced. The present Government has been faced with the need to bring in a number of important reforms to improve the industrial code and to provide for new country factories acts. The Government has had to take up the challenge of equal pay for women for work of equal value. This matter has been talked about glibly by some members on the Government side. Our lady senators who talk about this matter always vote, against it.

The present South Australian Labour Government has committed itself to a financial programme which will mean, for instance, that a great deal of money will be allocated to the Minister of Education to be spent by his Department, and to cover, amongst other things, improvements such as equal pay. Obviously, the Education Department has not all the money it requires to provide all the things the Government would like to provide with regard to education. The Government has to catch up on the wage and salary problems with regard to its teachers. This is something it ought to do. To say that because the State Government failed to take up matching grants it is irresponsible is just nonsense.

On 16th November Senator Laught asked the Minister in charge of Commonwealth

Activities in Education and Research (Senator Gorton) this question -

Have there been any refusals by the Slates to avail themselves of moneys offered by the Commonwealth for the construction of buildings and halls connected with universities?

Senator Gorton said that South Australia did not intend to avail itself of the offer. Of course it does not intend to do so. It cannot afford to do it. If the South Australian Government decided to pursue a policy of deficit financing to the point where the economy of the State became unstable, the people about whom Senator Laught talks would be crying their eyes out. Already they are crying about certain improvements that have been effected. Only this week the Chamber of Manufactures met, complained about the downturn in industrial production and expressed fears about the state of the economy. Members of the Chamber undoubtedly will make representations to the Federal Government, but nobody on this side will say that that is evidence of mismanagement or irresponsibility.

Now I come to the matter of research grants. I originally raised this question on 21st October 1962. What was said, of course was not reported in the Press at that stage. In his reply, Senator Gorton said, in effect: “ If the State Government cannot do it, that is its business”. I do not think there was any political malice in his reply. However, when Senator Davidson raised the matter much more recently, what he said received headlines in the Press. What is happening in South Australia - and the people ought to know about it - is that the present State Government is trying to implement some long overdue reforms. Members of the former Conservative Government claim that, because of their conservatism, a certain degree of stability was established in the economy of the State. That is just a lot of nonsense. The fact is that Australia, and particularly South Australia, inherited economic conditions that were established during the war. The stability that has been enjoyed in that State has not been the result of Sir Thomas Playford’s administration. Arising out of. war production activities, the supply of technical facilities and the receipt of moneys from the Commonwealth, industry was well established in South Australia, and conditions established then continued to be enjoyed during the term of the

Playford Government. Nevertheless, during that Government’s term of office certain unstable wage conditions were experienced because of the fact that South Australia was a low wage State and because the organised industrial movement was unable to make very much progress.

For a while I was a member of the workers compensation board together with Sir Moxon Simpson. At that time standards were low compared with those operated in other States. Industrial codes and long service leave provisions were very bad. When other States were awarding three weeks annual leave and were introducing long service leave provisions, Sir Thomas Playford introduced an in-between system, with leave based on a period of service of seven years. The present Labour Government has had to legislate against that background. The present Government has been game enough to place certain financial obligations upon the whole community. Quite often the Liberal people, or should I say the Conservative people, say that when the Labour Party assumes office and starts to socialise it places the whole burden on the rich. However, the impositions that the Labour Government of South Australia has adopted in order to raise revenue to improve social standards have been fairly well distributed throughout the community. I suggest that if anybody rises and attacks the present State Government for doing so, he is being very unfair politically. Rather should that person be trying to highlight the kind of problem that South Australia experiences.

I have referred to the subject of education generally, accommodation at the Flinders University and the matching grants for research. In my opinion, the argument that has been advanced by the Minister of Education in South Australia in relation to the allocation of research grants is very sound. I draw the attention of honorable senators to the following Press report of 21st October of Mr. Loveday’s remarks -

He told the Assembly that he “ strongly resented “ being placed in the position of hearing from Canberra that money was going to be made available for projects in S.A., particularly as the Prime Minister (Sir Robert Menzies)’ had been told of the facts.

The State Government could not provide the matching amount unless cuts were made in tha. budget.

In this statement, Mr. Loveday said that all 70 staff members of the Adelaide and Bedford Park University staffs might not receive the FederalSlate grants worth £297,000 for which they had nominated.

Mr. Loveday said yesterday that the whole method of allocation for Commonwealth grants for research work was most unsatisfactory.

The research in the main was of national benefit and “ we should protest strongly against the procedure which calls for such an unreasonable contribution from the State “, he said.

What Mr. Loveday was saying, in effect, was that whatever commitments were made prior to the election of the present Labour Government in relation to the method of allocating research grants, the new Government, and more particularly the Minister of Education, should have been consulted about possible new procedures. The Minister was also saying, in effect, that the South Australian Minister of Education and Mr. M under Jones, the Director-General of Education, had no direct control over the allocution of research grants to particular individuals whose work had been of special value or quality but that the allocation was made by a certain committee. He was suggesting that, as the allocation was not made by a State authority but by a Commonwealth authority, a new basis ought to be adopted. 1 suggest that his complaint is well based.

I said earlier that the arguments that were being advanced were a form of political trickery. Reference has been made to the smaller sums that are now available in South Australia for housing. In another place a question was asked about this subject on 12th November. I suggest that it has been used wrongly in the Press. This is the question asked by Mr. Giles -

My question to the Minister for Housing relates to the decision made by the South Australian Government last week, 1 believe, to decrease the rale of commencement of Housing Trust homes. Did the South Australian Premier request this year as large an allocation of loan funds for housing purposes as has been requested in the past? Of total loan funds granted Lo South Australia, docs the proportion devoted to housing this year compare favorably with the proportions devoted to that purpose in years gone by?

The Minister for Housing (Mr. Bury) replied -

Each State has to decide what proportion of the total loan funds it receives from the Australian Loan Council it will devote to housing. I think that this year South Australia, as well as other States, received an increased loan allocation, but South Australia requested for housing purposes about £750,000 less than it requested last year. That, of course, is a matter for the South Australian Government to decide, not the Commonwealth.

This is the important thing which the Minister said, but which has not been reported -

On the whole, South Australia devotes a larger proportion of its loan funds to housing than do other States. . . .

The fact is that South Australia continues to undertake the amazingly good work that has been done in the past by the Housing Trust. The amount set aside for the Housing Trust this year has been increased from £12 million to £14 million. The State Government declined an extra amount which might have been made available to it because it was of the opinion that if it accepted the extra amount it would be placed financially in a situation where it could not maintain its other programmes. Not .only does a State government have the responsibility of building homes, factories and shops. Connected with those tasks is the responsibility of other engineering projects which con.situte the basic problem of the housing situation.

The Premier of South Australia has replied to the criticisms which, I suggest, are nonsense. I am not saying that the Minister has misrepresented the situation. I think that the members who asked the questions were playing politics. Honorable senators opposite have been playing politics in relation to education grants and the issue raised tonight. In the Adelaide “ Advertiser “ of 13th November a report, referred to the reply by the Premier of South Australia, Mr. Walsh. The report stated -

The Premier said yesterday that the Housing Trust had, in all, practically as much new money for housing as last year. Commenting on Mr. Giles’ question in Federal Parliament, the Premier said that £6,625,000 for housing this year was £175,000 or 2i per cent, less - but this would be far more than balanced by funds in hand, greater recoveries and reduced commitments for projects other than housing.

The South Australian Government is proposing to supplement the funds available for housing by greater recoveries of money which has already been lent. Some new measures have been introduced only this week in relation to mortgages. Action has been taken to encourage people to discharge very small mortgages and thus return to the Housing Trust the money required by the

Trust in a period of inflation and rising costs. That is not the only action taken. The report states that the Premier went on to say that the State Bank and the Commonwealth Savings Bank had been maintaining the amounts of money available in South Australia for housing as far as possible. The report then states -

The Government would have liked to increase its housing activity and finance to offset the fall in the private sector, the Premier said. . . . “ The reduction in housing and house lending activity which has occurred in this State has been wholely in the private sector “, Mr. Walsh said.

I am sure that most honorable senators will agree. How can a State Government be blamed for economic situations brought about because people who usually direct finance to housing in the private sector decide that that field is not as fruitful as it was?

The position was made very clear in this chamber when this Government, in an effort to provide more finance for housing, introduced two most important Bills - the Homes Savings Grant Bill and the Housing Loans Insurance Bill. Through that legislation, more money was made available for young people to purchase homes and an opportunity was provided to insure housing loans. That legislation was introduced at a time when avenues for raising money for housing were decreasing. The situation has since worsened. I was one senator on this side of the chamber who suggested that the proposed scheme might provide cheaper money for young people who otherwise would be forced to pay interest at rates of up to 10 per cent, per annum on part of their loans. The situation is not peculiar to South Australia but is well known throughout Australia.

It suits the political purposes of some people to place an absolutely incorrect interpretation on what the South Australian Government is doing. Because of certain developments, South Australia has a higher percentage of school attenders than other States. In that situation, the South Australian Government has said that it could use more Commonwealth moneys to cope with the great problems linked with expansion.

The industrial growth of South Australia is very satisfactory at present. Employers and such people as members of the Cham ber of Manufactures have lived in a paradise for many years. They have enjoyed a low wage climate and have not had to face the movements in industrial legislation that have occurred in Tasmania under a Labour Government; in Victoria before a Labour Government was defeated, where improved leave conditions were provided, including long service leave, together with grants to railwaymen and better compensation legislation; and in New South Wales, where maximum compensation of £4,300 was payable at a time when a maximum of £2,500 was payable in South Australia. I am not complaining about the methods used in South Australia, but it was difficult to negotiate to obtain the best possible compensation payments.

The people referred to tonight by Senator Laught should be very pleased that they have had such favorable conditions in a community which has been most responsive. Perhaps we were too responsive. For seven years I was Secretary of the Labour Council. Perhaps I was too docile at that time. If the arguments of Senator Laught hold water and his general observations are correct, it may be that I did not sufficiently urge the claims of the industrial population. However, I do not think that is so, because we were doing the best we knew, just as the Labour Government in South Australia is doing today. The South Australian Government will go on in that way, despite the criticisms which have been levelled at legislation which now allows a person with ordinary’ means to be free of taxation but will impose some burdens on people with higher incomes.

The legislation which imposes charges upon road transportation has been misunderstood. The South Australian Government is attempting to re-establish the prime position in the community of the railways administration. If a railways administration is competent - and this is true of the South Australian and Commonwealth Railways - it can be of tremendous benefit in developing a State. It is the cheapest form of transport and is not used as effectively as it should be. The railways in South Australia have never been properly used and the present South Australian Government is trying to establish the railways as the foremost form of transport.

I challenge any honorable senator to study the reports of the former commissioner, Mr. Chapman, or the present Commissioner, Mr. Fargher, who is shortly to retire. The reports show that each year the Railways Commissioner has complained about unfair competition from road transport and the prohibition on the railways competing with other carriers because of the policy of the State Government. The South Australian railways had to accept the obligation of carting many commodities at non-profitable rates. For that reason it could not advance its own cause. In fact, certain moneys were paid to the railways to compensate for its losses brought about by Government policy.

The present South Australian Government has done what other State Governments should do. It has said that there should be proper co-ordination of road and rail transport. A bill is to be introduced in the South Australian Parliament to achieve that result. In some country towns - particularly in the Liberal Party strongholds - people are distorting the aims of the Government. South Australia has never had a government which has striven so conscientiously and diligently. The Parliament has been sitting almost every day and probably will continue until Christmas. There is a possibility that it will return after Christmas. Never has a government in South Australia so applied itself to the task of instituting reforms. I refer, not only to economic and industrial reforms, but also to social reforms which are necessary because of the repressive conditions which existed under the previous State Government. Slowly the South Australian people are coming to recognise the worth of the efforts of the present State Government.

Senator Mattner, I know, has a great deal of time for the present Premier of South Australia, Mr. Walsh, who is an honest, straightforward and capable man. His efforts to rid South Australia of gerrymandering are being frustrated in the Parliament and misrepresented outside the Parliament. I sincerely believe in what I have said. I am not the sort of person who stands up and glibly makes statements to which he cannot subscribe. If the South Australian Government had not taken the measures that it has taken to impose certain unavoidable charges on the community, honorable senators opposite could have said that it is irresponsible because it has great social welfare plans and great reform plans but does not secure the means of carrying them out. Last night I heard the Premier of South Australia say: “Our first task is to establish a system by which we can get revenue into the State Treasury. After we have done that, we will carry out our reforms as we promised to do in the Budget speech.”

I do not think it does credit to any honorable senator to use an occasion such as this to make a political attack on a government that is in its infancy. When a party gains office after such a long period out of office, during which it was defeated by the Press and by gerrymandering, we should be a little tolerant and give it a chance to implement its programme. I am satisfied that the South Austraiian Government will succeed, although it has had to take certain measures within the State. I stress that in future any discussion of policies in debates on Commonwealth-State relations should be on a similar basis to that on which we dealt with aid for South Australia for rail standardisation work.

Senator WRIGHT:
Tasmania

.- I think few honorable senators are aware that tonight the Senate is charged with the responsibility of approving the formula under which, for the next five years, the financial relations between the Commonwealth and the States will be determined. The Senate is under challenge at the present time. I believe that in some respects the challenge is not directed to a very important matter; but the first stage in the dissolution of its security is to bc proposed at the first referendum to be put before the people for some years. I mention that because I believe that it behoves the Senate to take stock of its responsibilities.

The first point that I wish to note is that the whole of this debate has taken place in the presence of only one Minister at a time. Ministers have succeeded each other from time to time; but, as is usual when the Parliament sits in order to make a convenient opportunity for the Cabinet to sit, we have been afforded the presence of only one Minister at a time. If the Ministry takes responsibility for these matters, I believe that the first obligation of Ministers is (o take note of our debates. On a matter such as this, when the Senate claims that its future existence is in the public interest, its debates should indicate an alertness to the importance of the issue that is now before us. The issue is no less important because the Premiers have already indicated their concurrence in the formula that is expressed in this Bill. I do not intend to dissent from any part of it. But I believe that the Senate has a duty to indicate that it is alive to the most important issue in internal Federal politics - money, lt is only with money that we will implement policies for the welfare of our people.

Recently, a committee of 12, representative of all parties in the Parliament and elected by the members of their own parties, met to devise appropriate alterations to the Constitution. It should be obvious that any earnest senator on that committee would take account of the tendency in financial relations between the Commonwealth and the States and of the importance of that subject to the existence of the Senate. My view is that honorable senators come here to represent the people of their States and for the purpose of advancing the general welfare of their States. They do not come here as delegates of State Governments or State Parliaments. They are elected directly by the people of their States. I remind you, Mr. Acting Deputy President, that the amount of Federal money that was voted by this Parliament for the States in 1964-65 was about £494 million. It seems to me that, unless the smaller States retain their secured and entrenched rights in this Parliament to determine whether or not such money is voted for the States, there is a real challenge to the security of those smaller States.

I deplore the spirit that has come over this debate in the last hour. It has been practically a party contention as to the merit of the Liberal Party in South Australia on the one hand and the Labour Government of that State on the other hand. I believe that on an occasion such as this we should forget party differences, which are bedevilling not only this debate but also wider issues in respect of our functions in this place. We should consider the interests of the country and whether or not we senators are ensuring that the States, as entities and as represented by their Governments, irrespective of party, are receiving, by way df reimbursements, special grants or other categories of grants to which I shall refer, from the revenue that is raised by various means but only by the authority of this Parliament, sufficient moneys to discharge their proper functions for the benefit of their people.

According to the statement of the Treasurer (Mr. Harold Holt), in 1964-65 the total amount of Federal money that went to the States was £494,321,000. The payments to the States are likely to grow proportionately to the Commonwealth Budget, so long as the Federal system continues. Who in this Parliament will secure the proper supervision of the voting of that money if the authority of this chamber is impaired? The Premiers perform an entirely proper function in their negotiation arrangements at Premiers’ Conferences, but if they were not supported by the assurance that there was sufficient State representation in this chamber to guarantee the passage of appropriations in accordance with their arrangements, their arguments would be distorted as compared with present experience and would be unavailing.

The present proposals to unlink the nexus between the Senate and the House of Representatives is going to spell disaster for this chamber in one respect. It is going to corrode the first link of State security that is written into the Federal Constitution. As we are considering appropriations of the order of £494 million this year, the smaller States of the Commonwealth should take heed to see that there is in this Parliament a unit so constituted that it can supervise proper appropriations for their benefit. I have an abiding faith in my fellow countrymen, even those who reside in Melbourne and Sydney. That faith is intensified by experience which convinces me that as long as human nature is human nature, if Melbourne and Sydney could gain the right to control appropriation uninhibited by the equal voting strength of the smaller States in the Senate, the smaller States would be receiving a much diminished vote today. Make no mistake about that.

It was a Tasmanian who originally put into the Constitution the Braddon blot which ensured that for the first ten years of the Constitution- the Commonwealth would return surplus revenues to the States. But, unfortunately, he was prevailed upon to allow that provision to be terminated at the end of 10 years. Before the 10 year period had expired, this Parliament had devised a new formula so as to give Melbourne and Sydney a greater share of the cake, and for a long time the smaller States were impoverished. In 1933 the late Mr. J. A. Lyons, fresh from his experience of impoverishment in Tasmania became Prime Minister. He established the Commonwealth Grants Commission, from which South Australia, Western Australia and Tasmania received succour until 1959. At th;it time South Australia had gained a degree of independence and was able to discontinue. its claims as a claimant State. Now Tasmania and Western Australia are the only claimant States, and from the way in which fortune has worked in Western Australia, that State has every prospect in the next five years of no longer being a claimant State. But for those political events I have mentioned, Melbourne and Sydney would have been in the ascendancy.

We have heard speeches in this chamber within the last 12 months indicating Melbourne’s jaundice at the fact that Federal money is developing northern Australia. What an idea it is that Victoria is dissociated from the interests of northern Australia or that Tasmania is not interested in the security and prosperity of northern Australia. All I say is that we are here to approve or otherwise of a formula for the appropriation of Federal moneys for the purposes of the States, lt is imperative, in my view, that while that appropriation depends upon a Federal act of Parliament, there should remain secure in this Parliament a House in which all States have equal representation. That representation of the States should remain unimpaired in all the constitutional processes through which any act of this Parliament may pass. If it happens at some stage that a disagreement exists between the Senate and the other House concerning financial allocations to the States and a joint session of the Houses is necessary, it is most important that at that joint meeting honorable senators from each State retain their right to a vote, which is equivalent to one in two in accordance with the present constitutional nexus which it is proposed to disturb.

When 1 first entered politics straight after demobilisation at the end of the Second

World War, Federal and State financial relations were a keenly fought political issue. There were many on my side of politics who said that until the States regained their taxing rights they would have no independence. Honorable senators will remember that the uniform tax formula was originally proposed in 1942 in the rigours of the most exacting and challenging time of the war. The collection of income tax was unified. It was expected that that practice would endure for the period of the war. But the Labour Government proposed its continuance. There was opposition to it from my side of politics. A formula was devised whereby the Commonwealth collected the taxes and reimbursed the States for the tax revenue that it had arrogated from the States. From time to time Senator McKenna has expounded in this chamber in a creaking fashion the way in which the formula operated. The present Government came into power in 1949 and continued the formula, with supplementary grants of a purely arbitrary nature. These were fixed by Federal Cabinet and approved of by Federal Parliament. This formula operated until 1959. That was a decade of the most unsatisfactory relations between the central government and the Stales in the history of Federation.

We all expected this matter to go sour. That is why some members of the Constitutional Review Committee related any question of the Senate’s power to the question of Federal and State finances. If there was provision in the Constitution for the allocation of some fields of finance to the Stales, upon which they could feel secure, and for the allocation of other fields of finance to the Federal Government, I would not regard the continuance of the Senate’s authority unimpaired as importantly as I do. But if you abandon the idea entrenched in the Constitution itself of a provision securing constitutionally to the States their right to public moneys, it is imperative in the true interest of the States that the authority of this chamber remain unimpaired so as to be exercised, if sufficient will is represented in the chamber, to preserve the proper interests of the States.

So we had this most unsatisfactory position of formula grants and supplementary grants fixed by the Commonwealth

Government until 1959, when the Premiers were able to agree upon a formula. Whereas they were then getting, in round figures, about £220 million by way of reimbursement, they accepted from the Commonwealth Treasurer an offer of about £243 million. The States thought that they could get along if that amount were carved up on a basis of wages and population, with a betterment factor. That formula has given, in my judgment, comparative satisfaction to the States during the intervening years. The grants that were previously called tax reimbursement grants and afterwards were called financial assistance grants, moved from £205 million in 1958-59 to £224.5 in 1959-60. They have been increased to £377.5 million in 1965-66.

Senator Gair:

– So did taxation rise in that’ period.

Senator WRIGHT:

– State or Federal?

Senator Gair:

– Federal.

Senator WRIGHT:

– Yes. It would have to do so. Senator Gair realises that there has been a great upsurge of figure finance in that period, not all of it inflationary, and some of it represented by real growth. All I am saying is that we are given an idea of the increased amount that has been granted to the States under this formula -£205 million in 1958-59 and £377.5 million in 1965-66.

Senator Gair:

– What percentage of the total tax does reimbursement represent?

Senator WRIGHT:

– I shall not take time to refer to the per capita figures in all instances, but I shall come to some of them in a moment. One of the matters about which I am rather disappointed is that owing to the calls from the Chair I precede Senator Gair. I am very conscious of the debt that we will owe to Senator Gair when he speaks in this matter, because I for one in this Senate rejoice at the advent of an ex-Premier, with all the experience that he has of Premiers’ Conferences and State finance that will give us a sense of reality in this matter. So I hope that nothing I say is construed as contentious. I am one who is silly enough and old fashioned enough to think that we in this chamber ought to devote our minds to a subject of this sort with an earnest sense of purpose and impartiality. That is my only purpose now, and I am drawing attention to the fact that, owing to this formula, the amount reimbursed to the States has risen from £205 million in 1958-59 to £377.5 million in 1965-66. Each of us has to make his own conscious assessment of what inflation represents and what real growth represents in that time. That is simply one of the items of Federal money that goes back to the States, an item that represents reimbursement of income tax. Looking at that growth from £205 million to £377 million, I would share the view of the Premiers who said that this formula of 1959 had worked pretty well. However, They wanted an improvement of the betterment factor which would give them a little better advantage.

I heard some deprecation expressed of the treatment of Queensland, I think, from my side tonight - if, indeed, I am recognised as having a side. I heard a reference to the granting of an additional £1 million to Queensland. In view of Queensland’s relatively sparse population, huge undeveloped areas and challenging resources, is any one of us so mildewed as to say that we should not devote £1 million specially to place emphasis upon development in that part of the Commonwealth? Apart from that, Victoria gets £600,000 just as a matter of negotiation. Tasmania, from her outlook, will say: “If Victoria is in a temporary pinch and wants to make a bargain on the side, who will cavil at £600,000?” I make that statement with a full knowledge of the risk I run, perhaps, of being chided in my State with not advocating that Tasmania should grizzle. But when I do so, I want honorable senators to be patient enough to come with me to Table 3 of this paper that the Treasury has prepared on Commonwealth payments to or for the States.

There, we see that of the total payments that go to the States from the Commonwealth in general revenue grants, specific purpose grants, payments of a capital nature, and loans for payments of a capital nature, the per capita figures to the nearest £ are £38 for New South Wales, £36 for Victoria, £47 for Queensland, £52 for South Australia, £84 for Western Australia and £76 for Tasmania. I for my part find that there is a good deal of health in a Commonwealth that retains a system of appropriation expressed in the per capita figures that I have read. In case they excite too much interest, I forbear from re-reading them.

Senator Anderson:

– Would the honorable senator like to state the Tasmanian figure again?

Senator WRIGHT:

– I am glad to find that the Minister is following the debate. The figure for Tasmania is £76 per head as against £38 per head for New South Wales. May I observe that one of the greatest things that could happen to this country, having regard to the congestion in Sydney, would be a recognition of the opportunities to be found in the outposts, whether they be in Tasmania or Queensland.

The next thing to be noted is that the Minister, in his second reading speech, took the opportunity to bring to our attention the fact that Federal moneys now represent one-half of the States’ available finances. He said - lt is not often appreciated that in recent years approximately one-half of total annual net budgetary expenditure by the States has been financed by way of general revenue grants paid by the Commonwealth.

That proportion of itself should impress upon us the importance of maintaining unimpaired the States’ agency in this Parliament - the approving agency - to ensure a continuance of a proper appropriation of moneys by the Commonwealth for the States.

The Premiers in 1 965 agreed substantially to renew the 1959 formula, after a fiveyear period during which Victoria had despairingly challenged the consitutional base of those arrangements but was defeated in the High Court. We should recognise the 1965 agreement, which we are approving by the passage of this Bill, as registering the end of one epoch and the beginning of another in Federal-State financial relations. In future, the prosperity of the States, and therefore the welfare of their peoples, will depend upon such allocations of money as are made by the Federal Parliament, of which this Senate is one House. This is not a matter in which the States have any con.stitutional guarantee. Their only security is a fair appropriation by the Federal Parliament. All the Acts that the State Parliaments could pass in an endeavour to regain their taxing powers would be both politically and constitutionally unavailing.

It is important, therefore, that any honorable senator who is concerned with the welfare of the people of his State should make it abundantly plain that future appropriations, as political history goes on in accordance with the development that we are registering in this place now, will depend upon an Act of the Federal Parliament and therefore, in the final analysis, upon the Senate’s vote. I cannot emphasise too much that I always saw the situation - it is no secret that I saw it when I was a member of the Consitutional Review Committee - that unless the States had written into the Constitution a guarantee of appropriations of Federal finance, the Senate had to be retained unimpaired. Otherwise the three small States would be faced with the risk of being overridden by the more populous States on a primary vote, and ultimately on a secondary vote at a joint meeting after a deadlock and a double dissolution.

I should like to proceed to develop other aspects of this subject. I have dealt with the subject so far from the point of view of the responsibility of this Parliament. We should take note of the fact that the moneys that the States receive from the Commonwealth do not consist only of those appropriated in accordance with the formula set out in this Bill, which are in reality reimbursements of income tax. The formula for that has been fixed by the Premiers. The justice of it has to be taken into account when we have regard to the special grants to the States. Honorable senators will remember that at one time not only Tasmania, Western Australia and South Australia were claimant States for special assistance. Queensland also announced that she would advance such a claim. I think a great deal of statesmanship was displayed by those who managed the financial conferences at which there was evolved an outlook acceptable to Queensland and South Australia. They said, in effect: “ We will have a grosssly imbalanced Commonwealth unless we can reduce the claimant States to two “. That was part of the agreement of 1959. Queensland ceased to prosecute her claim and South Australia was taken into account as a non-claimant State. She has been able to develop on that independent basis and her continuance as a non-claimant State is acceptable to her.

If we look at the special grants to Tasmania and Western Australia for the present year - they are set out in the next Bill to come before the Senate - we will see that the recommended grant for Western Australia is £12 million and for Tasmania £8.8 million. When we compare those amounts with the £38 million and £15.9 million which Western Australia and Tasmania respectively will receive in the form of reimbursements of income tax, we see that the special grants are considerable in relation to the amounts that are, by right, given by way of reimbursement. Those two States are substantially dependent upon special assistance grants from revenue.

The other feature that has developed in the last 10 or 15 years of our experience of Federation in this country is that, in addition to those two forms of grants for general revenue purposes, the States receive payments for specific purposes. The first category consists of Financial Agreement payments and other assistance payments on which the largest is for universities.

Then we have developed, especially in the last five years, a procedure of giving payments for purposes of a capital nature. I was very interested to find these payments tabulated because in my view there has been a certain ad hoc approach by the Commonwealth to these matters. The Commonwealth receives a submission that a certain project is worthy of assistance. It may take the view that the project looks pretty good, that it will help the Government politically and should be supported. It might be a subsidy for the Ord River project in Western Australia, a steel undertaking or something of that sort. 1 have had the impression that there is a certain element of political expediency in the approval of these ad hoc payments of a capital nature. I have said before in this chamber that I should like to see something of the nature of a committee of supervision like the Public Works Committee within the Parliament to ensure that each project is economic and that such projects are coordinated to the purposes of true Australian development. I am not capable of suggesting that any one of the many projects for which we have voted money over the past five years is going to be disappointing or unworthy of the vote allotted to it. But there is no doubt that if a system of ad hoc capital grants for development is continued without any regular supervisory inquiry and report, there is every likelihood that the system can be abused for reasons of political expediency.

I am not an authority on the subject and I hate to refer to anything that might bring any contention around my head. But if I might refer to it in subdued tones, I rather think the Vernon Committee report offered some suggestion along these lines, lt suggested there should be a committee of coordination making recommendations as to what projects were most appropriate for development in the national interest. I was rather sorry to think that this recommendation was interpreted in some quarters as an idea that might establish a technocracy in lieu of a democracy. I would have thought that was a most far fetched and fanciful interpretation of the recommendation; but I hope that those who are earnestly listening to me will give it some understanding.

We have developed Australia along the lines of payments for specific purposes of a revenue nature. They are set forth in the Treasurer’s statement and include universities research grants, national disasters, coal mining, promotion of road safety practices, maintenance of the Eyre and Barkly Highways, dairy industry - extension services and expansion of agricultural advisory services, minor agricultural research, tobacco industry, cattle tick eradication and control, tuberculosis hospital services, blood transfusion services and investigation of water resources. It is a remarkable achievement that that rather miscellaneous structure of financial ideas contributes to an orderly development of the Commonwealth.

I do not think there are many who suggest that the moneys that go back to the States are expended with any significant loss to the public welfare. There are not many who will criticise the capital development upon which the Commonwealth Government has placed emphasis in the past six or eight years. I think there are many who applaud the way in which the Commonwealth increasingly is adding to the purposes of education, health and other arterial State matters by way of supplementary revenue grants. I can only rely upon the faith that nothing walks with aimless feet and that these things, in combination, produce a result that allows an integrated development of the Commonwealth.

When you get to the situation where one Parliament raises from the people 50 per cent, of the moneys which other State Parliaments expend, you put the whole system of representative government under extreme challenge. Those State voters who elect their Parliaments do so, under our system, with a primary responsibility upon the Parliaments to raise from their voters the money that they spend; but if elected Parliaments in the States have the responsibility of expending as to 50 per cent, of their expenditure, moneys that are appropriated under the responsibility of policies in this Parliament, the whole system of responsible government comes under extreme challenge. In all humility, it is not for me to advocate any change at present. I content myself with recognising the facts in the hope that we will watch the development of the system over the next 10 years because I for one view the possible, trend with some misgiving. I doubt whether these elements in the system of responsible representative parliaments will stand up to the challenge.

I think the formula the State Premiers evolved earlier this year, as explained in the Minister’s second reading speech, has worked well in the past six years and I think it will work well for the next five years for which it has been devised. There is no fixed date for it to terminate but it has been evolved with a view to its indefinite continuance. It is a formula which should continue to work well for that foreseeable period. After that time, I doubt whether I shall have any responsibility in the matter.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– 1 have not been in the Senate for the whole of the debate but I was present during Senator Wright’s speech. We all listened to his contribution with great interest. The Leader of the Opposition (Senator McKenna) suggested that the reports of the Premiers’ Conferences should be made available to the Senate. The Premiers’ Conference was held this year in June in Canberra at the wish of the Premiers. It is for the Premiers to decide whether the transcript of proceedings is to be made public. In this case, some of the Premiers were opposed to the transcript of proceedings being made public. In those circumstances, it would not be proper for the Commonwealth Government to provide the information in the documented form as the honorable senator requested. As honorable senators will appreciate, I am flying blind to some degree on this matter, but I think that I have dealt with the substance of the request made by the Leader of the Opposition.

Senator McKenna:

– What I asked was: In the last three years at the request of how many Premiers were the proceedings held in camera?

Senator ANDERSON:

– The answer to that question is not available to me. All I can say is that it was the decision of the Premiers that the Conferences should be held in camera.

Senator Wright discussed the problems of the States and also the position of the Senate in relation to the other place and the possible breaking of the nexus between the two Houses of Parliament. He said that, from the day that the fathers of Federation formulated the Constitution, the size of the representation in the Senate has been half the size of the representation in the House of Representatives. The honorable senator said that inherent in this provision was the proposition that this would have the effect of protecting the rights and interests of the less populous States. He then suggested, as I interpret his remarks, that any weakening of that position vis-a-vis the other place could have a detrimental effect on the appropriation of funds for those less populous States. It is fair enough for the honorable senator to put that view, but I do not believe that this could be so. I do not believe that the reimbursements to the States since the advent of uniform taxation, to which the honorable senator has referred in the debate tonight, have been governed only by the fact that in the Senate Western Australia has the same number of representatives as New South Wales, and Tasmania has the same number as Victoria. I do not. concede that point at all. I think that is a rather narrow view. The whole history of payments by the Commonwealth to the States shows that the payments have been founded always on need, equality and justice. I do not think the fact that the voice of Tasmania or the voice of Western Australia has been strong in this place has had any ultimate effect on the logic or the justice of the provision of Commonwealth funds to the States.

In fairness to Senator Wright I should say that he very properly made the point that we should look at the payments to the States in terms of the payments per head of population. He quoted the figures for the last finanancial year, 1964-65. I invite the honorable senator to look at the figures for the financial year 1965-66. In respect of the total Commonwealth payments to or for the States, per head of population, for payments of a capital nature, specific purpose payments and general revenue grants, he will find that Western Australia this year receives £99 8s. lOd. whereas last financial year-

Senator Wright:

– What document is this?

Senator ANDERSON:

– This is the same document from which the honorable senator quoted - “ Commonwealth Payments to or for the States, 1965-66”. The honorable senator quoted table 3 on page 44. I am referring to table 4 on page 45. The grant to Western Australia rises from £88 ls. lid. in the last financial year to £99 8s. lOd. in this financial year, which is a significant increase. The total Commonwealth payments to or for Tasmania, per head of population, rises from £75 16s. 4d. to £83 12s. 4d. I think the honorable senator has. to recognise and appreciate the fact that the whole concept of payments to or for the Stales has been based on the needs of the undeveloped States. That is to say, the payments have been based on developmental needs. The basis has been the overall requirements of Australia without regard to the boundaries of the States. For the life of me, I find it difficult to accept the proposition that, because a change is to be made in the relationship between the number of members in the Senate and the other place, the magnificent record with respect to Commonwealth payments to or for the States is to be prejudiced.

I do not think that we as senators can claim to have the exclusive right to preserve the interests of the States. Members of the other place have the same duty as we have. Let it be known and appreciated that the States have their representatives in the other place just as they have their representatives in the Senate. The representatives in the other place are as conscious as we are of the responsibilities with relation to the progress and development of the States.

Senator Wright:

– There is the very great danger that if New South Wales has 58 members and Tasmania five members in the House of Representatives and if New South Wales members want to chisel down the allocation to Tasmania-

Senator ANDERSON:

– It has always been the case that, although there are only five Tasmanian members in the House of Representatives and 10 senators in this chamber, the grants to Tasmania have not been affected thereby. The payments to or for Tasmania, per head of population, rise from £75 16s. 4d. last year to £83 12s. 4d. this year. It is readily understandable that, at the lime when the Constitution was being formulated, the less populous States coming into Federation may well have felt the need to safeguard their interests. But I believe that we have outgrown that attitude. As we have come to nationhood, we have developed beyond those boundaries. We speak in terms of Australia today. We aTe Australians first and Tasmanians, New South Welshmen, Victorians, South Australians, Western Australians and Queenslanders second.

Senator Wright:

– Hear, hear!

Senator ANDERSON:

– The whole history of the Commonwealth since this Government came into power - and indeed during the term of office of the previous Government - shows that the Commonwealth has looked at these matters in a national way and has taken a broad national outlook. I do not think that that broad national outlook will be prejudiced by the breaking of the nexus between the two Houses of Parliament. No doubt there will be opportunities for us to debate that matter at another time.

Senator McKenna:

– Does the Minister know of any government under which a grant to a State from this Parliament has been opposed or contested? I do not know of any such happening.

Senator ANDERSON:

– I would not say yea or nay to that question. I do not recall any such happening. When any matter in relation to a grant to a State is before the Senate, it is debated on its merits.

This brings me to the question of the other argument that Senator Wright used in relation to ad hoc capital grants. It is true that there have been ad hoc capital grants. We have a Department of National Development. Tremendous mineral resources are being discivered. A search for oil is going on. New markets overseas, particularly in the Far East, are expanding. Our trade prospects are continuing to improve. In these circumstances the necessity arises for ad hoc decisions to be made for the expenditure of huge capital sums. Inherent in the fact that these are the functions of the Department of National Development is to be found the safeguards to which the honorable senator refers. We must have a degree of elasticity in our financial structure. A fluid financial situation is required in this regard. I do not concede that there is any danger of expediency. These matters have to be judged, not on what good they will be in regard to Western Australia, Queensland, Victoria or New South Wales, but on what good they will be to Australia. We have to see whether a certain proposal, when compared with another proposal, is the one which in the circumstances is the one that ought to be proceeded with.

I came into this debate very late, but I was quite fascinated by and thoroughly enjoyed the contribution made by Senator Wright. The honorable senator referred to uniform taxation. I think it is quite proper to say that at a Premiers’ Conference, and indeed in the course of litigation, Victoria made an assault on the present system and sought a reversion to the right of the States to impose their own income tax. However, the fact is that the States have indicated that they are not now prepared to revert to the earlier arrangement because the present arrangement, even though no doubt it has some disadvantages, meets their requirements far more equitably.

Senator Wright:

– This spells a complete termination of any claim of this sort. It is the end of one epoch.

Senator ANDERSON:

– We cannot look into the future. Under the present arrangement, which has been in operation since the end of the last war, the Commonwealth has been able to ensure that the bigger, more populous and consequently wealthier States contribute to the development of the smaller States. That is what the honorable Senator and many other people have wanted. The State Premiers believe, I think, that the new formula, which now includes a higher betterment factor, will go a long way towards providing for the development of the smaller States.

I have not covered the whole debate; I have covered only one or two aspects of it. I thank the Senate for a speedy passage of the Bill.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

Clauses 1 to 4 agreed to.

Clause 5 (Grants to States).

Senator WRIGHT:
Tasmania

.- Clause 5 (4.) provides -

The amount of the grant . . . payable to the State of Victoria during the year that commenced on the first day of July, One thousand nine hundred and sixty-five, shall, by virtue of this sub-section, be increased by Six hundred thousand pounds.

I did not hear all the argument that was addressed to the secrecy of the negotiations that produced this result, but that argument emphasises the importance of our being informed of the factors that induced the Commonwealth to agree to this small increment for the State of Victoria. I do not challenge the item. I look upon it with the greatest of sympathy. However, we should be told of the public circumstances that justify this special allocation:

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I am not in a position to give the information, for the reasons that I gave to Senator McKenna. The proceedings of the Premiers’ Conference were held in camera. I have no information available to give to the Committee’.

Senator WRIGHT:
Tasmania

.- I respect the Minister’s sense of confidence in relation to the discussions. However, when he presents a Bill of this kind containing a special item such as the one I have mentioned he should, without retailing confidential discussions, tell us the factors which justified the inclusion of that item. I should have thought that honorable senators should be informed of the factors that entitled Victoria to receive a special vote over and above the appropriations that are being made in accordance with the formula. I note that the Minister is now consulting his adviser. While he is doing so, I shall add this point that I had not intended to add: I believe that it would lead to a better spirit of understanding if the Parliament were given in a straighforward manner a list of the items which Victoria was able to put forward that enabled her case to receive special consideration.

Senator Anderson:

– I cannot add to what I said earlier.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I support the request that has been made by Senator Wright. In the circumstances, I do not press for a statement of the arguments that were addressed by the Premiers to the representatives of the Commonwealth, but surely the Minister is in a position to say that, when providing for the additional sum of £600,000 to be made available to Victoria, certain factors such as unemployment, drought, fire, flood or industrial conditions were taken into account. We do not ask to be told all the arguments. I ask: On what grounds does the Commonwealth today justify the addition of this sum of £600,000 to the grant payable to Victoria? It is an important addition, because I take it thatwhat is expressed to operate for only the first year will go into the upset amount of the grant and will affect the percentage of increase from year to year. If that is so, it is a significant matter. I ask the Minister to be good enough to indicate to us in broad terms the factors that influenced the Commonwealth Government.

Senator McMANUS:
Victoria

.- I support what has been said by Senator Wright and Senator McKenna. As a Victorian senator, I am particularly interested in the reasons that lie behind the allocation of this additional sum to my State. I can understand our being denied knowledge of confidential conversations and anything of that kind. ButI believe that the representative of my State must have borne in mind and must have referred to certain special needs which he thought justified the allocation of that money. It would be quite wrong for the Government to adopt the attitude that it will deny to honorable senators information on this particular issue. I understand that, if the worst came to the worst, it would be possible for honorable senators to meet in camera. If we did that, perhaps we could be given the information. It seems to me to be quite wrong for the Minister to say in regard to the allocation of such a large sum that somebody has been told that nothing will be said about it and that he proposes to say nothing about it. This is a matter in relation to which we have certain rights, and I believe that we should press those rights.

Senator O’BYRNE:
Tasmania

– I wish to speak in relation to clause 5–

Consideration interrupted.

page 1743

THE TEMPORARY CHAIRMAN

(Senator Wood). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Temporary Chairman do now leave the chair and report to the Senate.

Question resolved in the affirmative. (The Temporary Chairman having reported accordingly) -

page 1743

ADJOURNMENT

The Parliament - Political Parties

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

That the Senate do now adjourn.

Senator KEEFFE:
Queensland

– I will not take up a great deal of time at this late hour of the evening, but I believe that I should reply to a number of comments that were made about myself and a colleague in another place during the adjournment debate last Thursday evening. At that time I did not have an opportunity to reply to those comments or to defend myself. I now claim that privilege because I believe that some of the statements that were made were not true. Other statements are gross distortions.

Honorable senators will remember that the issue which was debated last Thursday evening arose as a result of a challenge to your ruling, Mr. President; at least, that was the submission put by the Leader of the Opposition in the Senate (Senator McKenna) and by those who so rightly supported him. I claim that Senator Wedgwood grossly distorted statements I had made in this chamber when we were debating the Repatriation Bill. Unfortunately, the dignity of the Senate was further reduced when Senator Wedgwood’s story was taken up by three Ministers. It is my ambition, and the ambition of my Party, to ensure that the dignity of this Parliament is upheld at all times. That was the only reason why I entered the debate to challenge a statement made by the Minister for Repatriation (Senator McKellar). In spite of your warnings, Mr. President, last Thursday he continued to tell his story.

I am sorry to do this to a lady but, no doubt, as Senator Wedgwood is receiving equal pay, she will tolerate the statements that I am about to make and which I claim are truthful. I shall now relate what I claim is a distortion put by Senator Wedgwood. She claimed that I found no difficulty whatsoever in linking the Repatriation Department with the Returned Services League when I made a “ scurrilous “ - the word is Senator Wedgwood’s - attack in this chamber. She proceeded then to read out portions of a speech I had previously made. I want it to be clearly understood that on the occasion of my alleged attack I did not condemn the whole of the Returned Services League. I condemned the hierarchy of the League for not making proper protests when the Federal Government refused to increase repatriation benefits in some fields.

Senator Prowse:

– What does “ hierarchy “ mean?

Senator KEEFFE:

– If the honorable senator wants it more clearly defined, I have no quarrel with him if he applies it to the State and Federal officials. I have no quarrel with the officials of sub-branches, or with some of those higher up because I believe they do a magnificent job for returned servicemen. If the correspondence I have received as a result of my statement on a previous occasion is any indication of the support for my attitude, it ought to be restated. It is perfectly obvious that many ex-servicemen feel that something more ought to be done on their behalf by the Returned Services League. I think that is fair public criticism. I do not think it can be described as scurrilous or by any of the other adjectives applied by honorable senators opposite. If we are not allowed to use the Senate or another place to voice legitimate criticism, we can say goodbye to democracy. We are the official Opposition and our job is to offer constructive criticism. I believe we have seen a positive approach by the State Council of the Returned Services League in New South Wales in the last couple of days when it has criticised the Government for what it believes is a shortcoming.

I felt very sorry for Senator McKellar when Senator Wedgwood committed a faux pas and the Minister had to correct it. The honorable senator linked the Minister with the Returned Services League. Whether a man joins this or that organisation is entirely a matter for his own conscience. That is one of the embarrassing things that Senator Wedgwood did to Senator McKellar. No doubt the Minister could have provided an answer to what Senator Wedgwood said, either private or otherwise. Senator McKellar again came into the attack and linked my name with that of Dr. Cairns in another place. I think that this action was quite wrong and unfair. I had not made a scurrilous attack. Again, I make no apology for what I claim to be fair criticism of what happened on that occasion. If honorable senators opposite feel that statements I made were unfair. I say that their attitude was indeed most unfair when we were dealing with the Repatriation Bill. By a majority vote, the Senate decided to grant medical facilities to diggers of World War I. That amendment was subsequently rejected in the other House. When the Bill was returned to the Senate, it was also rejected here.

Let us be consistent in these things. If criticism is to be levelled by any Party - Government or Opposition - at least let us be fair. We should not be hypocritical. If honorable senators opposite feel that my attitude was unfair, I charge that they were more than unfair when they said to diggers- of World War I: “ You arc not entitled to any medical assistance “. The medical assistance which the Senate wished to give to veterans of World War I would have cost a very small amount of money In comparison with the total allocation for repatriation purposes. The Senate had decided that those benefits should be made available.

It is unfortunate that on last Thursday evening Senator Henty closed the debate when it must have been perfectly obvious to him that at least one or two Opposition senators wanted the right to offer a defence to the unfounded charges made against us. I again apologise for taking up the time of the Senate at this hour of the evening, but I felt that honorable senators opposite, particularly the Ministers, if they wish to uphold the dignity of the Senate, should show a fair dinkum attitude and not act like schoolboys as they did on a previous occasion.

Senator McMANUS:
Victoria

.- I am a little surprised at Senator Keeffe’s plea for sympathy and fair play and his statement that, in debate, senators should uphold the dignity of this chamber. Like myself, Senator Keeffe is an old campaigner. He has been round the course quite a few times, as I have been. Having been in the Labour Party for a long time, he knows that one of the principles it has always stood for is that if you give it, you should be prepared to take it. I wish to quote a few remarks made by Senator Keeffe some weeks ago and to leave it to honorable senators to decide whether they represented fair play and whether they upheld the dignity of the Senate. They were about the party to which 1 belong. I did not take any exception to them then. I do not take any exception to them now. I do not take exception to anything which he says and to which I can reply. I suggest that, coming from one who says he believes in the dignity of this chamber and in fair play in debate, this is worth hearing. He said -

The D.L.P. is a small Party that lives on hate. It feeds on hate and believes in some of the most reactionary things that can happen in any community. It believes in the atomic bomb. . . . It believes in all the things that the Fascists believed in years ago and still believe in. It believes in the power of the gun and the jackboot.

In other words, Senator Keeffe exercised his privilege to stand up here and say that I am a Fascist of the Hitler or Mussolini type. He exercised his privilege to say that I am an apostle of everything reactionary in the community. He said that if I were in power I would use the gun on the ordinary people in the community and, when I got them down, 1 would put the boot in.

Senator Keeffe:

– I did not say that the honorable senator would.

Senator McMANUS:

– Senator Keeffe said that the D.L.P. would, and he was referring to a speech that I made. He should not run away and say that he did not mean what he said. Only a week ago he went on record as saying that when a man says something he ought to be kept up to it.

Senator Cavanagh:

– He believes what he said.

Senator McMANUS:

– Yes, he believes it.

Senator Cavanagh:

– And so does his party.

Senator McMANUS:

– Now Senator Cavanagh says that he believes it. He is entitled to speak for himself but not for his party. A strange thing that I have noticed since my return to the Senate from an enforced vacation is that some members of the Australian Labour Party - not all of them; only a small minority which includes Senator Cavanagh and Senator Keeffe - adopt the attitude that they can say anything they like about anybody else and can be as tough as they want to be; but if anybody attempts to reply in kind they want the Chair to protect them or they turn around and say: “ These people are lowering the dignity of this chamber.”

My political upbringing taught me this much: If you give it, you have to take it. I am sorry to see the people who now claim to be the Australian Labour Party adopting the attitude that they can give it. but that, if anyone attempts to reply, the Chair has to protect them. I respect the Chair. In my opinion, Mr. President, you carry out your duties in the Chair in the way in which they should be carried out. Naturally, you control the chamber. But I will never appeal to the Chair. If I attack anybody and he replies, I will not appeal for sympathy and suggest that he should conduct himself on a higher plane. That is all I have to say. As I have often said, I am not worried about anything that anybody says about me. There is nothing which can be said about me which has not been said a dozen times before. All I want is the chance to have a shot back. Having had my shot back, I now sit down.

Senator O’BYRNE:
Tasmania

.- 1, too, was excluded from participation in the adjournment debate on Thursday night and Friday morning of last week. My intention was to enter the debate on the issue thai was raised by the Leader of the Opposition (Senator McKenna), namely the need for honorable senators to obey the Standing Orders and particularly the rulings of the Chair. During the debate we saw an exhibition of the tactics of members of the Government parlies. Those tactics were highlighted by the words that came from some of Her Majesty’s Ministers of State, who, in their old groove, used their old slush tactics. Senator Wedgwood was the foil or the front. In a meek and mild tone of voice, but with lots of venom, she asked her question and then subsequently entered the debate in the same way.

Ministers of the Crown are able to hide temporarily behind their numbers in this chamber. Perhaps they have the idea that the fact of their numbers outweighs other considerations. But I have seen Ministers come and go during the period of nearly 19 years for which I have been in the Senate. ( have also seen governments come and go in some States. There is no such thing as the eternal government or the eternal Minister. Some Ministers try to give the impression that they are eternal. Perhaps that idea gives them an arrogance which is not becoming in a Minister of the Crown. Neither is it becoming to the Senate. That was the point that we raised in the adjournment debate last week. The things that keep the Senate and the parliamentary institution going are the Standing Orders, the rulings of the Chair and the decorum with which the proceedings are conducted.

Senator McManus, as always, has come along ostensibly with a fire engine. He has gone through the actions of pouring water on the flames. But, of course, petrol instead of water has come out of the end of the hose. Hate is the lifeblood of the Democratic Labour Party. I do not accuse Senator McManus in particular of living on hate; hut I would say that his life over the past 10 years has been dominated mainly by hale. I could give proof of his Party feeding on hate, in the form of the scurrilous propaganda that it directs at the Australian Labour Party during election campaigns, lt accuses my Party, including me, of sponsoring a political philosophy that would put the Australian people into concentration camps and says that we would be responsible for piles of skulls and bones.

The fact that our television stations can show such propaganda and that responsible people can conceive of that type of thing in a country such as Australia is a reflection on the whole of our society. It is absolutely ridiculous rot, and Senator McManus knows that. I believe that secretly he is reactionary enough to believe that people think as he does and as his Party does. From its inception, when it illegally took over the funds of the Australian Labour Party in Victoria-

Senator McManus:

– And stuck to them, too.

Senator O’BYRNE:

– And stuck to them, yes. This is no laughing matter. It was a criminal offence. Only criminals would stick to other people’s property and put in a man with a rifle to defend the office that they occupied illegally. This is the man who laughs and puts himself forward as a responsible citizen. He was one of the instigators, one of the mainstays, one of the arch supporters of the whole idea of the D.L.P. taking over the A.L.P.

Senator Wright:

– What did the court say?

Senator McManus:

– What did the court say when the A.L.P. went to it?

Senator O’BYRNE:

– It does not matter what the court said, but the honorable senator ought to know what it said. The court often says something which is the opposite of what he has advocated. He is not always a winner in the courts. What did the court say about the Hurseys and where did the money go from the “Daily Telegraph “ that went down from Sydney to defend the Hurseys? Courts do not always give decisions according to the submissions of advocates. As Senator Keeffe said, the D.L.P. believes in all things that are reactionary. The South American people are starting to disagree with the D.L.P. They say that there should be a nuclear free zona in South America.

Senator McManus:

– The South Americans?

Senator O’BYRNE:

– Yes, as we on this side of the chamber believe there should be here.

Senator McManus:

– There is no D.L.P. in South America.

Senator O’BYRNE:

– The people would not have it there. The people of South America are reactionary. They are supposed to be as bad as the Spaniards. Yet the South Americans will not have the D.L.P. policy. The D.L.P. believes in the power of the jackboot. Every time we see a lineup of other reactionary people we find the D.L.P. there aiding and abetting them.

Senator McManus:

– Name them.

Senator O’BYRNE:

– There was a show in Western Australia some years ago.

Senator McManus:

– Tell us who they are.

Senator O’BYRNE:

– I will get a list and have it incorporated in “ Hansard “. Another matter that certain senators from Victoria bring up in this chamber is the question of unity tickets. This unity ticket business is a Victorian idea. The Australian Country Party is united with the Liberal Party at the Commonwealth level, but in Victoria there is no such unity ticket; there is disunity. As a matter of fact, the Country Party has had strange bedfellows at times. However, the position is that the nation wide propaganda about unity tickets is coming out of the mouths and out of the distorted minds of members of the D.L.P. in Victoria.

There is this talk of Communists taking over Australia. You cannot get out of some people’s minds this philosophy of Communism. It is like Scientology. How can you get out of the mind of a scientologist what a’ stupid Alec he is? These people, like Jehovah’s Witnesses and members of other peculiar religious sects that would rather see a baby die than give it a blood transfusion, are just plain queer. I believe that the same comment applies to the adherents of extreme and extravagant political parties and ideologies such as the D.L.P., Communism, Fascism and Nazism with its storm troopers.

Senator McManus:

– What about the members of the Country Party?

Senator O’BYRNE:

– As Billy Hughes said, you have to draw the line somewhere, and I draw the line there. I think that at least they arc Australians. In fact, I pay homage to them as being good Australians, even though I disagree with them politically. However, the position is that an attack was made on a man who was riot here to defend himself. Those on our side who have entered the debate have tried to keep to the subject which was raised.

So far as I am concerned, the main point at issue was the reference to the Returned Services League. I have been a member of the R.S.L. ever since my discharge from the Forces. 1 know very well that there ure many thousands of members of the rank and file of the R.S.L. who disagree with the participation of the top echelon of the R.S.L. in politics. As a matter of fact, it is written into the League’s constitution that they should not participate in politics. But a number of men who are interested in politics are closely enough connected with the R.S.L. for the implications of their actions to bring the R.S.L. into politics.

Senator Wright:

– Are there any who say that the R.S.L. is the enemy of the freedom of Australia?

Senator O’BYRNE:

– I would say that some of the expressions of opinion that come from members of Parliament who are also members of the Returned Services League are similar to some of the things that Senator McManus could say, that a black shirt could say, or that Kent Hughes could say before the war - that he. was a Fascist.

The PRESIDENT:

– Order! Order!

Senator O’BYRNE:

– The honorable member for Chisholm, Sir Wilfrid Kent Hughes, before the war, gave his reasons why he was a Fascist and published them.

Senator McManus:

– You know that he is not here to defend himself.

Senator O’BYRNE:

– I can produce a paper in which he wrote an article finishing “ and that is why I am a Fascist without a shirt “.

Senator McManus:

– He is like Dr. Cairns. He is not here to defend himself.

Senator O’BYRNE:

– He does not want defending.

The PRESIDENT:

– Order! Senator O’Byrne, you would do better to address yourself to the Chair.

Senator O’BYRNE:

– If we have witch hunts such as we had the other night - and it is continuing tonight - we are going to reduce the standard in this Senate. We are going to bring criticism and contempt on this Senate. I believe that the Ministers who were responsible for diverting this debate away from its original purpose did no credit to themselves and did a disservice to the Senate.

Senator MCKELLAR:
Minister for Repatriation · New South Wales · CP

– 1 regret that I was not here when Senator Keeffe rose to speak on the adjournment this evening. I came into the chamber to hear portion of the speech he made. I think he said that he had been accused of making a scurrilous statement. That is his expression, not mine.

Senator Keeffe:

– lt was Senator Wedgwood’s statement.

Senator McKELLAR:

– All right. You say that Senator Wedgwood made a scurrilous statement. What Senator Wedgwood said was-

Senator Cavanagh:

– Senator Keeffe said it.

Senator McKELLAR:

– Senator Keeffe said that Senator Wedgwood made the statement. I am replying to what Senator Keeffe said to me not replying to you, Senator Cavanagh. This is what Senator Wedgwood quoted of what Senator Keeffe said -

My final criticism of the repatriation benefits is that I believe this Government is guided by the hierarchy of the Returned Servicemen’s League. 1 feci that this organisation, at the top level, no longer represents the ordinary average exservicemen of any war. They are fearful of condemning the Government when putting forward their requests prior to Budget time. When the requests ate not granted, there is little or no protest from the top echelon of the Returned Soldiers League.

Then Senator Wedgwood said: “ This is the vicious part of the statement “, and again quoted Senator Keeffe as having said -

I suppose that in this selfish world the people who guide the destinies of this organisation, which ought to be the greatest ex-servicemen’s organisation in the country, are fearful of what will happen to them if they are offside with the Government when the Queen’s birthday honours and the New Year honours lists are made out.

If that is not a scurrilous statement then 1 do not know what is. I criticised Senator Keeffe the other night for making that statement. 1 again criticise him. He referred to the lack of appreciation by the Government - this is the inference - of what World War I diggers had done and implied that we had not done enough for them. We have done a lol for them and I hope we can do a lot more for them. Senator Keeffe spoke about the dignity of the Senate. All I want to say in conclusion is this: Is it any wonder that the Australian Labour Party is in the trouble it is in when it has as President a man like Senator Keeffe?

Senator CAVANAGH:
South Australia

– Mr. President, I rise to take part in this debate because since I have been a member of the Senate I have been one who has utilised the adjournment debate on various occasions to express an opinion in order to rectify something that the Opposition considered should be rectified. I think that I have exploited the adjournment debate as much as anyone else by speaking on particular grievances. I think it is a valuable opportunity for senators to speak on a topic not permitted by the orders of the day. 1 would regret it if the adjournment debate were to be turned from time to time into a hate session for criticism of one another. I hope that the time never comes when that is the purpose of adjournment debates.

On Thursday night last the Opposition - whether rightly or wrongly - thought that it had a legitimate grievance. As you will remember, Mr. President, the question was not whether Dr. Cairns should be criticised for a statement that he was reported to have made but whether a statement that he had associated with persons and organisations that were enemies of Australia should be permitted. The Opposition thought that it was justified in saying that this was unfair commentary on someone who was .not here to defend himself. In the course of debate, we engage in party politics. I have never asked for a withdrawal of anything that has been said against me, and many bad things have been said against me from time to time. 1 think the accusations that have been levelled against me have, more than would anything that T could say, held the utterers of those accusations up to ridicule among those who know me. So we do not object to criticism or to the principle that if you give it you must take it. The Labour Party can give it, and we have no opposition to criticism by the Democratic Labour Party or by the Liberal Party, if it is just criticism, but we must draw the line at unjust criticism. Senator Keeffe tonight made no complaint about criticism and even distortion by the Minister for Repatriation (Senator McKellar).

Senator Wedgwood:

– He said that I had distorted what he said, but I read exactly what he said.

Senator CAVANAGH:

– I say that Senator Keeffe made no complaint about criticism of himself. He complained about untrue statements that he claimed had been made about him. Senator Keeffe said that Senator Wedgwood had said that he had made a scurrilous attack upon the Returned Servicemen’s League.

Senator McKellar:

– He did.

Senator CAVANAGH:

– The Minister for Repatriation, who came into the chamber to reply to an argument, apologised for not having heard it. He showed, in the distortion of it, that he was replying to something that he knew nothing about. Senator Keeffe said that on no occasion did he attack the R.S.L.

Senator Mattner:

– Whom did he attack?

Senator CAVANAGH:

– He attacked the hierarchy of the R.S.L.

Senator Gorton:

– The elected leaders.

Senator CAVANAGH:

– Let us put the matter in the right perspective. If an attack upon the hierarchy of the R.S.L. is a just matter for condemnation, Senator Keeffe is liable to condemnation and there is no squeal about it, but do not accuse him or anyone else of doing something that was not done. We on this side of the Senate have great admiration for those who form the R.S.L. Senator Keeffe’s statement, as reported in “ Hansard “, shows whom he did attack. When we were discussing on Thursday night the matter of what the honorable member for Yarra (Dr. J. F. Cairns) had said, we were relying on what had been referred to as the flimsy evidence of a newspaper report that he had attacked the R.S.L. as an enemy of freedom in Australia. That is a statement with which 1 could not agree if it was correctly reported. This individual has again been reported as saying during the weekend, that the enemies of freedom in Australia are the hierarchy of the R.S.L. and certain other people. I think that a lot of people in Australia agree with those comments. That is not an attack on the R.S.L.

In South Australia, witch hunts have been conducted in the Department of Education and so on at the instigation of Colonel Easlip to find Communists who were not there to be found. Are we to have similar witch hunts here? Some sections of this organisation are determined to stifle freedom of expression in Australia, if the views ex pressed do not coincide with their own. But let us at least keep this debate on the question that has been raised. We do not object to criticism, but we do object to distortion. Senator Keeffe, according to Senator McManus, has at some time or other expressed his opinion of the D.L.P. Possibly Senator Keeffe’s opinion would be endorsed by most senators on this side of the chamber. We have no objection to the D.L.P. retaliating by expressing its opinion of the A.L.P. But let us not criticise an individual or an organisation on false premises and false reports. If we maintain that basis, we will find that we can go on with our political disagreements. We may be called upon to justify what we have said, but we should not be called upon to justify something we have not said.

Senator BRANSON:
Western Australia

– I enter the debate purely to defend a fellow prisoner of war. I was amazed to hear another former prisoner of war in this place, Senator O’Byrne, attack Sir Wilfrid Kent Hughes, who is not here to defend himself. Every man in the Eighth Division would agree with me that Billy Kent Hughes, as he was affectionately known in the Service, was held in the highest regard as a soldier, and rightly so because he earned this regard. In case some young people may happen to hear of what was said here tonight about Sir Wilfrid Kent Hughes, I want to place on record in the same journal what this man has given to Australia. Let me start with his political record. He has given 38 years of service to the Parliaments of Australia. He served with distinction in the Victorian Parliament. He was Minister of Transport and Minister for Labour. He was twice the Deputy Premier of Victoria. He was the Chief Secretary and he was the Minister in Charge of Electrical Undertakings. He then moved into the Federal sphere and became Minister for the Interior. This man’s record in peacetime is second to none.

Let us now look at his glorious record as a soldier, and I remind my ex-prisoner of war friend of the record of this exprisoner of war. It would be most invidious to attempt to put other records against it, and I Will not do that. In the First World War. he enlisted in the Australian Imperial Force on 7th August 1914. He did not wait very long to serve his country in war time and he was here for only a little time after enlisting He embarked on 18th October 19.14. He served in the 7th Battalion 3rd Australian Light Horse Brigade Headquarters and the Australian Mounted Division. He was awarded the Military Cross in 19.16 and he was mentioned in despatches four times. He was discharged in England with the rank of major on 30th January 1920, two years after the war was over. This man was 70 years of age this year. In the Second World War, he enlisted in the 2nd Australian Imperial Force on 1st July 1940, from the Citizen Military Forces with the rank of major. He had carried on with the Service in peacetime. In 1941 he was a lieutenant-colonel. It was a few months later that I had the honour and privilege of getting to know him. He served with Administrative Headquarters and with 8th Division Head quarters in Malaya. He was promoted te Colonel in 1942. Then, unfortunately, he was taken prisoner by the Japanese at the fall of Singapore. He was recovered ai Mukden on 17th August 1945 and returned to Australia on 15th October 1945. In 1946 he was awarded the O.B.E. and the E.D., and was mentioned in despatches. This is the man the honorable senator attacked in this place when he was not here to defend himself. I leave this matter to the Australian people for judgment.

Senator O’Byrne. - Mr. President, I wish to make a personal explanation. I have been grievously misrepresented by Senator Branson. I did not make any attack on the personal bravery of Sir Wilfrid Kent Hughes. I directed attention to the fact that he had written a series of articles, which he has signed without any qualms. The title of the articles was “ Why I am a Facist “. He concluded the series of articles by saying: “That is why I am a Fascist without a shirt “. I repeat that I made no attack on his personal bravery. I did not denythat he was a very great man in adversity in prisoner of war camps. I have been grievously misrepresented by the construe-, ion that Senator Branson put on my references to Sir Wilfrid Kent Hughes.

Question resolved in the affirmative.

Senate adjourned at 11.12 p.m.

Cite as: Australia, Senate, Debates, 23 November 1965, viewed 22 October 2017, <http://historichansard.net/senate/1965/19651123_senate_25_s30/>.

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