27th Parliament · 2nd Session
THE PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
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– I inform the Senate that I have received through His Excellency the Governor-General, from the Governor of the State of New South Wales, a certificate certifying the choice of Douglas Barr Scott as a senator to fill the vacancy in the representation of New South Wales caused by the death of Senator McKellar. The certificate will be laid on the table and read by the Clerk.
The Clerk then laid on the table the certificate certifying the choice as a senator of Douglas B.,rr. Scott.
Senator Douglas Barr Scott made and subscribed the oath of allegiance.
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– lt is with deep regret that I have to announce formally to the Senate the death in Melbourne on 31st July of Sir Wilfrid Selwyn Kent Hughes, K.B.E., M.V.O., M.C., E.D., the honourable member for Chisholm. Sir Wilfrid had represented the Chisholm electorate since 1949. His political career began in his home state of Victoria when he was elected to the Legislative Assembly as the honourable member for Kew in 1927. He held that seat until his resignation in 1949 to contest the Federal election. During his period in the Victorian Parliament Sir Wilfrid held a variety of ministerial postings. He was Honourable Minister from 19th May 1932 to 25th July 1934, and Minister of Transport, Minister of Labour and Vice President of the Board of Land and Works from 25th July 1934 to 2nd April 1935.
He was Deputy Premier from 20th March to 2nd April 1935, Minister of Transport and Vice President of the Board of Land and Works from 20th November 1947 to 29th October 1949, and Minister of Public Instruction from 20th November 1947 to 7th December 1948. He was Minister in charge of Electrical Undertakings from 7th December 1948 to 29th October 1 949 and Deputy Premier from 3rd December 1948 to 29th October 1949.
Sir Wilfrid was elected to the House of Representatives by the electorate of Chisholm in the general elections of 1949, 1951, 1954, 1955, 1958, 1961, 1963, 1966 and 1969. He was a member of the Privileges Committee from 1st March 1950 to 19th March 1951, and Minister for the Interior and Minister for Works and Housing from 11th May 1951 to 1 1th January 1956. He was Commissioner representing the Commonwealth River Murray Commission from May 1951 to May 1956. Sir Wilfrid inspected Australian war graves in the Pacific and South East Asian areas from January to March 1955. He was a member of the Joint Parliamentary Committee on Foreign Affairs from 1st March 1956 to 2nd November 1961, being Chairman from 20th March 1956, and he represented the Austraiian Government at the inauguration of the Chinese President at Taiwan in 1966.
Sir Wilfrid had a distinguished military record. He enlisted in the Australian Imperial Force on 7th August 1914 and embarked on 18th October 1914. He served in the 7th Battalion of the 3rd Australian Light Horse Brigade Headquarters and the Australian Mounted Division. He was awarded the Military Cross in 1916 and mentioned in despatches four times. He was discharged in England with the rank of major on 30th January 1920. Sir Wilfrid enlisted in the 2nd Australian Imperial Force on 1st July 1940 from the Citizen Military Forces with the rank of Major and was appointed Lieutenant-Colonel in 1941. He served with Administration Headquarters and with 8th Division Headquarters in Malaya, and was appointed Colonel in 1942. He was taken prisoner of war by the Japanese following the fall of Singapore and was recovered at Mukden on 17th August 1945. He returned to Australia on 15th
October 1945, was awarded the Order of the British Empire and the Efficiency Decoration in 1946, and was mentioned in despatches.
Sir Wilfrid was certainly a man who earned the title of Great Australian. His death ended an illustrious career dedicated to the service of his country. His life and the long span of his varied achievements was a copybook example to Australian youth. In his teenage, Sir Wilfrid starred in scholastic pursuits and sport. In 1914 he won a Rhodes Scholarship for Victoria. He captained the Oxford ski team. In 1920 he represented Australia as a hurdler at the Olympic Games. His interest in the Olympics continued throughout his life and was climaxed when he was appointed Chairman of the Organising Committee for the 1956 Olympic Games in Melbourne. In two World Wars he served with distinction. In World War I he served as a young Light Horse officer and in World War II he served as a senior staff officer of the Eighth Australian Division in Malaya. 1 would also like to add some personal remarks about Sir Wilfrid’s career as a parliamentarian and as a citizen of Australia. Senator Branson and myself perhaps had a closer association with the late Sir Wilfrid Kent Hughes than most other honourable senator because we were in military service with him. I think I speak for all when I say that he was a man of strong views and a man who held very strongly to his views. He was a very humane man; he had a human touch. On occasions when members or senators were sick, going overseas or had some problems, it was natural for him to contact them and say something kindly to them. In our Parliament, where strong views are held, he showed great humanity. I think we all came to respect and appreciate that in Sir Wilfrid. I know that we all in this Parliament feel that Australia has lost a very wonderful Australian and a man who had a great contribution to make in the interests of his country. I move:
– On behalf of the Opposition, I support the motion moved by the Leader of the Government in the Senate (Senator Sir Kenneth Anderson). He has given us a brief outline of the extraordinary scope of the career of Sir Wilfrid Kent Hughes. It is impossible to list in detail the positions Sir Wilfrid held in his 22 years in the Victorian Parliament, followed by over 21 years in the Federal arena. He was a man with a great spread of interests and a man who lived a crowded life. Sir Wilfrid was an Olympian, a Rhodes Scholar, a published poet, a Deputy Premier of Victoria, a Federal Minister, a member of the famous Australian Light Horse, a Japanese war prisoner in Malaya and an ardent conservationist. It would be difficult to find many other Australians who played so many different roles in one lifetime.
Above all, Sir Wilfrid was a man with strongly held views on independence. Although he undoubtedly held many political views similar to those of Sir Robert Menzies, he was too independent to remain a Minister under Sir Robert after 195S and he quickly established a reputation as a most effective back bencher, always prodding the Government, criticising it strongly whenever he disapproved of policy or performance. He spoke out and fought for his beliefs in and out of Parliament. However, he did noL let his well known political convictions overrule his independence of mind. He was an acknowledged enemy of the Australian Labor Party and yet he was a close friend of some of its members. He was known to attack unions as dupes, but at the same time he argued fervently for equal pay for female public servants. In the last session of Parliament he refused to vote with the Government to gag debate on benefits for returned soldiers and marched, ramrod stiff as ever, out of the House. He was a defender of the role of the back bencher and of the ultimate authority of Parliament over the Executive.
Sir Wilfrid’s death of a heart attack on 3 1st July, at the age of 75, came as a shock to those who knew his passion for physical fitness. He was a familiar figure in the early hours around Canberra, jogging for miles near the lake. With his death this
Parliament has lost one of its most colourful and controversial members. It is unlikely to see another in his mould again.
– I support the tributes paid by the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) and the Leader of the Opposition (Senator Murphy) to the late Sir Wilfrid Kent Hughes. I know I speak for every member of the Australian Country Party when I say that Sir Wilfrid’s death has robbed the Australian Parliament and the Australian people of a most remarkable figure. Only a comparative few have the honour of representing the Australian people either in State or Federal politics. Sir Wilfrid did both, winning selection for the Victorian Parliament and later being elected to the Federal Parliament. It is significant that such was his outstanding ability that he rose to ministerial rank in both the State and Federal governments.
The outstanding qualities of this man extended well beyond the boundaries of Parliament where he served and legislated with distinction. He will always be remembered outside (he parliamentary ranks as a man who represented his country as an Olympic athlete of distinction and who put back into sport probably more than he ever took out of it. Sir Wilfrid, significantly and appropriately, was Chairman of the Organising Committee of the Olympic Games held in Melbourne in 1956, the first time that the Olympic Games had been held in this country.
Any mention of this man would be incomplete without remembering that Sir Wilfrid served his country with valour during 2 world wars. He will be missed by all. I and my Country Party colleagues extend our deepest sympathy to his widow and 3 daughters.
- Mr President, the Democratic Labor Party has asked me to speak on its behalf in regard to Sir Wilfrid Kent Hughes because he was a fellow Victorian and because I knew him well. I can recall him in the 1920s when, as a former Olympian, he was very active in promoting sport at the University of Melbourne. He later had a most distinguished career in State politics and he entered Federal politics. He and I shared a common interest in foreign affairs and we had many a discussion upon foreign policy and how the security of this country should be preserved. Only a couple of days before he died he came to my office in Melbourne and we had a long discussion. As I looked at him I could not help thinking how well he appeared to be for a man of his age. He told me that he had just come back from the United States of America but that he was about to leave Australia again because, as a former Rhodes scholar, he had been extended the honour of an invitation to the Cecil Rhodes centenary celebrations which were to be held shortly in South Africa. It was typical of Sir Wilfrid that he then told me that he proposed to extend his tour abroad because he felt that he had contacts which could be of value to Australia, particularly from a defence and a security point of view. He proposed at his own expense to extend his tour to meet these people and to endeavour to put before them ideas which he believed would be in Australia’s interests. Well, that was not to be. He has now left us. In my view he was a great and patriotic Australian. All of us in this Parliament will miss him. My Party offers its most sincere sympathy to his wife and family.
– Mr President, I wish to pay a brief tribute to our colleague. As a soldier, a statesman, a sportsman, a scholar and a citizen he was pre-eminent. In every field of endeavour his contribution was of the highest order. His patriotism is expressed in his own classic odyssey ‘The Slaves of the Samurai’ where, having been recovered from Mukden and starting out on the voyage of the sparkling Pacific he said:
Australia! Land which gave me birth!
I love you with a proud passion’s flame.
I long to touch your soft warm earth,
And reach the shores from whence I came.
Australia! Anzac’s sun-drenched home!
The living and the dead return.
They are but one ‘neath heaven’s dome.
The sky is mankind’s common urn.
The war is won. To win the peace
Strive hard to cure the faults of youth,
Shut out blind pride and never cease
To seek the living light of truth.
On his urn I would wish to inscribe the epitaph which he recorded in his dedication of that poem:
He served his country, as he served his friends, With selfless courage and to noble ends.
– I desire to associate myself with the remarks that have been made by the various speakers. It is true that I differed very violently with some of the political thoughts of Sir Wilfrid Kent Hughes; but he was always a great friend of mine. We were close in the administration of sport. We were together in the Victorian Parliament for 12 or 13 years; and, of course, we were together in this Parliament, although not in the same House, from 1953.
I found him to be a very humane man, as has been said. I remember that in Melbourne I had a driver who had been a prisoner of war in the same camp as Sir Wilfrid. He spoke in very glowing terms of how Sir Wilfrid at all times went out of his way to do what he could for others in those very bad and barbarous days. In regard to Sir Wilfrid’s activities in sport, he was an Olympian and, whilst we may not have seen eye to eye on which is the greatest sporting park in Victoria, he did a terrific job for amateur sport. Only a few days before he died I made arrangements with him to have lunch with me and to view an area just outside Melbourne in which 1 take some little interest. I regret thai his untimely passing prevented that from happening.
I believe that, as everyone has said, Australia has lost one of its greatest sons. It is true that we differed, and differed very violently, on some questions of the day; but no-one who knew Billy Kent Hughes as I and many others here knew him could help admiring him. The tribute that was paid at his funeral service portrayed to the people who were present the great esteem in which he was held on account of the work he had done. I desire to add these few words to the others that have been said and also to attempt to console his widow and daughters. I trust that God will remember him.
– I should like to be associated with this motion of condolence to the widow and family of the late Sir Wilfrid Kent Hughes. He was a truly great man. Mention has been made of the contributions he made as a scholar, a poet, a soldier and a parliamentarian. But, if anyone were to ask me, as one who knew him for many years, where and when he made his greatest contribution, I would certainly say that it was during the years of the depression.
At that time, when events were burning themselves into the brains of those who were experiencing hardship as a result of the depression and when men were out of work, women were worried and children were hungry, Sir Wilfrid Kent Hughes was in charge of State relief. He was enlisting the support of the Government and voluntary organisations. All people who were imbued with the idea There but for the grace of God go I’ in those days were being thrown into some type of association in order to help in whatever way they could. No effort was too great; and no request too insignificant. But through it all shone the compassion of Billy Kent Hughes, as he was known then. His task of administering State relief to so many people was not an easy one, but he carried it out in a manner that was typical of the man. He gave sympathy but at no time did he attempt to patronise those who were in difficulties. So although he will be known for many things, that period in our history was one that ensured for Billy Kent Hughes an abiding place in the memory of the people who worked with him and who went through those difficult years.
He was a great family man. Possibly his appreciation of the problems of other people, which was gained so early in his life, helped him during his years as a prisoner of war and enabled him, with that determination that marked everything that he did, to endure and to return to the family whom he loved and who loved him so much. I have many memories of Sir Wilfrid Kent Hughes and therefore I would like to support the motion.
– As a brother officer, an old Service comrade, and one who was a prisoner of war with Billy Kent Hughes, I support everything that has been said about him. I think that if Billy Kent Hughes had to go, this is the way he would want to go - not being sick but being, up till the last minute, alert, agile and as forceful as he always had been. He was a great Australian and a great soldier. I salute him.
– I wish to associate myself in the spoken word with the tribute which is offered in memory of a departed colleague. He was, as has been so universally accepted, a distinguished Australian with notable achievements in many fields of public and private endeavour. He lived a very full life, but the life he lived was a useful life, pre-eminently one of public service. It is a warming reflection to have known him, to have worked with him and to have enjoyed his friendship and his confidence. I speak with a particular affection because for more than 20 years he was in the House of Representatives, the representative of the electorate of Chisholm and as a lifetime resident in that electorate I have not had occasion to vote for any other candidate.
He was an exemplary member of Parliament. He believed in Parliament. He believed in its processes and in its objectives. His conduct accorded with his precept. He was active and known throughout his electorate and concerned, over and above what might reasonably have been expected of a man with his tremendous range of interests, to maintain close relations with his electors and, in particular, with the rank and file of the Liberal Party branches throughout his electorate.
In 43 years of parliamentary life he was a Minister of the Crown in both State and Federal Parliaments, but for the last 14 years of his parliamentary life he was a backbench member. His interest and activity in that role did not slacken. He applied himself to widening his range of interests and informing himself at first hand by on the spot investigations throughout the world. He had an extensive and informative range of contacts internationally, and he imparted the information he obtained and the opinions he formed through a regular intelligence bulletin which he established and financed himself and which he circulated to a tremendous range of readers. He was a diligent, concerned and useful member of Parliament - a peer among equals. He was a remarkable man of great nobility, of great strength, of sincerity and of outgoing humanity. I am grateful to have this opportunity to pay my tribute to his memory.
Question resolved in the affirmative, honourable senators standing in their places.
Motion (by Senator Sir Kenneth Anderson) agreed to:
That as a mark of respect to the memory of the late Sir Wilfrid Kent Hughes, the sitting of the Senate bc suspended until 8 o.m.
Sitting suspended from 3.26 to 8 p.m.
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Senator POYSER presented from 59 citi zens of Victoria a petition showing that due to the higher living cost, persons on social service pensions are finding it extremely difficult to live in even the most frugal way. The petitioners call upon the Commonwealth Government to increase the base pension rate to 30% of the average weekly male earnings for all States, as ascertained by the Commonwealth Statistician, plus supplementary assistance and allowances in accordance with Australian Council of Trades Unions policy and adopted as a policy of the Australian Commonwealth Pensioners Federation, and by doing so give a reasonably moderate pension.
The petitioners pray that the Senate will take immediate steps to bring about the wishes expressed in the petition.
Petition received and read.
Senator McCLELLAND presented from 250 citizens of the Commonwealth a petition showing that the Commonwealth Parliament has acted to remove some inadequacies in the Australian education system; a major inadequacy at present in Australian education is the lack of equal education opportunity for all; 200,000 students from universities, colleges of advanced education and other tertiary institutions, and their parents suffer severe penalty from inadequacies in the Income Tax Assessment Act 1936-1968: and Australia cannot afford to hinder the education of these 200,000 Australians.
The petitioners pray that the Senate make legal provision for the allowance of personal education expenses as a deduction from income for tax purposes; removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students: increase in the amount of deduction allowable for tertiary education expenses; increase in the maintenance allowance for students; and exemption of non-bonded scholarships, for part-time students, from income tax.
Petition received and read.
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–
I give notice that at the next sitting of the Senate I shall move:
That, with reference to the appointment of the 5 Estimates Committees A, B, C, D and E agreed to by the Senate on 11th June 1970. the Senate resolves -
Each Committee shall consist of 8 Senators, 4 to be appointed by the Leader of the Government in the Senate, 3 to be appointed by the Leader of the Opposition the Senate, one to be appointed by the Leader of the Australian Democratic Labor Partyto each of 4 of the said Committees, and one to be appointed by any minority group or groups, or Independent or Independents to one of the said Committees.
The particular Committees in respect of which the Australian Democratic Labor Party, or any minority group or groups or Independent or Independents make appointments shall be determined by agreement between the Australian Democratic Labor Party and any minority group or groups or Independent or Independents and, in the absence of agreement duly notified to the President, the question as to the representation on any particular committee as between the Australian Democratic Labor Party and the minority group or groups, or Independent or Independents shall be determined by the Senate.
Each Committee may proceed to the dispatch of business notwithstanding that all members have not been appointed and notwithstanding any vacancy.
A Committee shall not meet while the Senate is actually sitting, unless by special order of the Senate.
The foregoing provisions of thisresolution, so far as they are inconsistent with the Standing Orders, shall have effect notwithstanding anything contained in the Standing Orders.
– I give notice that at the next sitting of the Senate I shall move:
That, with reference to the appointment of the 7 Standing Committees agreed to by the Senate on 11th June 1970, the Senate resolves:
The actual establishment of the total number of Committees, including the appointment of senators to the various Committees, shall be done over a period of not less than 12 months and not before two of the said Committees selected by the Senate for first establishment have actually operated and a report of the operation of these Committees has been presented to the Senate by the President.
The two such Committees selected for first establishment shall be - The Standing Committee on Health and Welfare: and the Standing Committee on Primary and Secondary Industry and Trade.
A report shall be presented to the Senate by the President not later than the commencement of the first session of 1971 as to the operation of the Standing Committees and their administration, accommodation and staff requirements.
Each Standing Committee shall consist of 8 senators, 4 to be appointed by the Leader of the Government in the Senate, 3 to be appointed by the Leader of the Opposition in the Senate, I to be appointed by the Leader of the Australian Democratic Labor Party to each of 6 of the said Committees, and I to be appointed by any minority group or groups or Independent or Independents to one of the said committees.
The particular Standing Committees in respect of which the Australian Democratic Labor Party, or any minority group or group or Independent or Independents mate appointments shall be determined by agreement between the Australian Demo- ticic Labor Party and any minority group or groups or Independent or Independents and. in the absence of agreement duly notified to the President, the question as to the representation on any particular standing committee as between the Australian Democratic Labor Parly and the minority group or groups or Independent or Independents shall be determined by the Senate.
A Standing Committee may proceed to the dispatch of business notwithstanding that all members have not been appointed and notwithstanding any vacancy.
Each Standing Committee shall elect a Government member as Chairman.
The Chairman may fromtime to time appoint a member of the Committee to be Deputy Chairman and the member so appointed shall act as Chairman of the Committee at any time when there is no Chairman or the Chairman is not present at a meeting of the Committee.
In the event of an equality of voting, the Chairman, or the Deputy Chairman when acting as Chairman, shall have a casting vote.
A Standing Committee shall not meet while the Senate is actually sitting, unless by special order of the Senate.
Unless it be otherwise specially provided by the Standing Orders, the reference of a matter to a Standing Committee shall be on motion after notice. Such notice of motion may be given -
in the usual manner when notices are given at the beginning of the business of the day; or
at any other time by a senator -
stating its terms to the Senate, when other business is not before the Chair; or
delivering a copy to the Clerk, who shall report it to the Senate at the first opportunity.
Any such notice of motion shall be placed on the notice paper for the next sitting day as ‘Business of the Senate’ and, as such, shall take precedence of Government and general business set down for that day.
The foregoing provisions of this resolution, so far as they are inconsistent with the Standing Orders, shall have effect notwithstanding any thing contained in the Standing Orders.
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Assent to the following Bills reported:
States Grants (Special Financial Assistance) Bill 1970.
Loan Bill 1970.
Queensland Grant (Bundaberg Irrigation Works) Bill 1970.
Defence Bill 1970.
Defence Forces Retirement Benefits Bill 1970.
Marginal Dairy Farms Agreements Bill 1970.
Customs Tariff Bill 1970.
Loan (Defence) Bill 1970.
Wheal Industry Stabilisation Bill 1970.
Snowy MountainsEngineering Corporation Bill 1970.
Loan (War Service Land Settlement) Bill 1970.
National Health Bill 1970.
Commonwealth Serum Laboratories Bill 1970.
Dairying Industry Levy Bill 1970.
Dairying Industry Levy Collection Bill 1970.
Dairying Industry Equalisation Bill 1970.
Dairying Industry Equalisation Legislation Referendum Bill 1970.
Dairying Industry Bill 1970.
Processed Milk Products Bounty Bill 1970.
Seamen’s Compensation Bill 1970.
Wool Industry Bill 1970.
Commonwealth Employees’ Compensation Bill 1970.
Stevedoring Industry (Temporary Provisions) Bill 1970.
Conciliation and Arbitration Bill 1970.
Civil Aviation (Carriers’ Liability) Bill 1970.
Australian National Airlines Bill 1970.
Air Accidents (Commonwealth Liability) Bill 1970.
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[8.10] -I present the following papers:
Civil Works Programme 1970-71.
Commonwealth Payments to or for the States, 1970-71.
Estimates of Receiptsand Summary of Estimated Expenditure for the year ending 30 June 1971.
Expenditure -
Particulars of proposed Expenditure for the Service of the year ending 30 June 1971.
Particulars of Proposed Provision for Certain Expenditure in respect of the year ending 30 June 1971.
Government Securities on Issue at 30 June 1970.
Commonwealth Income Tax Statistics for Income year 1967-68.
National Income and Expenditure, 1969-70. and move:
That the Senate take note of the papers.
Tonight the Treasurer is delivering in another place his Budget Speech for 1970-71. It is my privilege to outline to the Senate the Budget proposals of the Government.
By these proposals the Government seeks: - to provide for a large increase in essential expenditures, especially on payments to the States, welfare, development and assistance to industry, including emergency relief for woolgrowers hard hit by drought and low prices; - to make reductions in personal income taxation, especially on lower and middle income earners, estimated to have a value to the taxpayers concerned of $289m in a full financial year and $228m in 1970-71; we thereby make good - indeed more than make good - our undertaking to give substantial income tax relief to this large body of people; - notwithstanding these large commitments, to produce a responsible budget, a balanced budget, a budget shaped to the requirements of an economy that is dynamic and fast-growing - but an economy still threatened by disruptive inflation.
In 1969-70 the economy again achieved a high rate of growth. Gross national product at constant prices increased by about 5.5% - this despite the trials and setbacks of rural industry. The number of wage and salary earners increased by no less than 4% . Even though wool prices fell sharply, there was a remarkable increase of 24% in the total value of exports. But the strong lift in activity that lay behind these achievements brought developing stresses. By March, notwithstanding the big inflow of migrants and the entry of more and more married women into the work-force, the labour situation had become very tight, with job vacancies well above the number of registered applicants for work.
The surge in demand for labour reflected a quickening in demand generally. Consumer spending, which increased by 7.2% in 1968-69, moved up by 9.6% in 1969-70. All branches of private fixed capital expenditure - that is to say, on dwellings, other forms of building and construction, plant and equipment - rose stronglyuntil the final quarter of the year when, through tightening of finance, there was a moderate check to housing starts. Public authority spending also rose strongly throughout the year.
In brief, notably though output was increasing, demand was increasing faster. These are typically the conditions in which inflation breeds. Signs that it was active became more evident as the year went on. Cost and price increases gathered pace. Average weekly earnings rose by about 8% in 1969-70. The consumer price index rose at an accelerating rate throughout the year, reaching an annual rate of growth above 5% in the June quarter.
The end-year downswing in liquidity, reinforced as it was by sharp increases in interest rates, produced a marked monetary tightening, although its severity was moderated to some extent by a revival of capital inflow. The most evident effect it had on the demand situation was seen in housing activity; but there was also some general easing of the labour market. Even so, at the end of June the number of registered applicants for jobs did not exceed 1 % of the work-force.
The current year thus began with the economy pretty much at full stretch. Prospects for growth are very good provided the call on resources is kept within reason. Certainly, it is entirely possible that the year will see real gross national product increase again by 5.5% or thereabouts. With immigration flowing strongly, there should be a further large addition - more than 3% - to the work-force. The farm outlook is not encouraging but we can reasonably expect a good rise in non-farm productivity. Our external outlook is promising - in particular, there should be a further large rise in exports. Meanwhile, the fact that Bass Strait oil is coming on stream in a big way will hold down imports quite considerably. Capital inflow has been fairly strong lately though, of course, we cannot be sure of its trend through the year.
It is the demand side that will bear watching. Consumer spending is currently very buoyant and that situation seems likely to continue. Private spending on plant and equipment and non-residential building and construction seems set for continued strong growth - there is a wealth of investment opportunities, and such forward indicators as we have clearly suggest this. The earlier strong upward trend in dwelling construction has been checked for the time being but an upturn there is likely before long.
In framing the Budget, we have had to assess most carefully its potential influence on the economy. The Commonwealth’s expenditures, directly or indirectly, add to demand and we have had to scrutinise them carefully from that standpoint. All the increases we propose are in the high priority class. We have also taken as mandatory a sizeable reduction in personal income tax - we propose to meet that obligation squarely and unequivocally. But the increase in disposable incomes that will ensue must tend to stimulate demand.
Plainly, economic prospects being what they are, the Government must ensure that, in its overall effect, the Budget does not give additional impetus to demand. Accordingly, we have avoided any significant acceleration in the rate of increase in domestic outlays and, as the cornerstone of our policy, we are bringing in a balanced Budget - indeed, one in which total receipts will more than cover total expenditure. As overseas expenditures this year will again greatly exceed overseas receipts, this Budget will produce a considerable surplus of domestic receipts over domestic expenditures. From the standpoint of impact on resources and liquidity that will be all to the good.
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Total expenditure this year is estimated at $7, 883m, an increase of $795m or 11.2%. The increase last year was $519m or 7.9%. More important for the domestic economy, however, is the fact that the rate of increase in domestic outlay this year - estimated at 11.4% - is not greatly above the increase of 10.7% last year.
The prospective increase in expenditure this year owes much to the fact that, particularly over the last 12 months, the Government has entered into a number of major new commitments. Having already undertaken these large commitments, we could not, responsibly, put forward further large expenditure proposals at this juncture.
Accordingly, the new expenditure proposals which 1 shall mention presently are estimated to add no more than about S70m to our expenditures this year. As usual, detailed analyses of the estimates are to be found in statements attached to the Treasurer’s Budget Speech.
Payments to the States
Outstanding in this years estimates is the very large increase in payments to the States. These payments, including the funds required for the State works and housing programmes, are estimated at no less than S2,708m or $29 1m more than last year. They will absorb i of this year’s Budget and account for more than i of the estimated increase of $795m in our total expenditures this year.
An important factor in this increase is the new financial assistance arrangements we have entered into with the States and which commence this year. These will give the States $70m more Commonwealth assistance in 1970-71 than if the previous arrangements had continued. We shall also be meeting debt servicing charges on S200m of State debt this year at a cost of $l2m, and on a further $200m of State debt in each of the next 4 years. This will lead to the formal transfer of $ 1 ,000m of State debt to the Commonwealth in June 1975.
It was agreed at the recent Loan Council meeting that the State works and housing programmes should be increased this year by S65m, thus bringing them to S823m. Within this figure, the Commonwealth will be providing, for the first time, an interestfree grant of $200m that will help to relieve the States of debt charges on their non-revenue-producing works.
Other specific purpose payments to the States are estimated at $539m or S69m more than last year; these cover a wide variety of both revenue and capital payments, including $12m for drought relief assistance to Queensland in continuation of the widely extended measures introduced last year. The Commonwealth will also as usual give sympathetic consideration to any further approaches the States may make for assistance of this nature where the cost involved would place an undue burden on their finances. Over the past 5 years the Commonwealth has provided the States with drought relief assistance totalling $94m.
The Defence Vote proposed is $1,1 37m which is 3.1% greater than the 1969-70 expenditure of Si, 103m. Defence expenditure overseas - estimated at $233m - will be about the same as last year.
The estimates contain some provision for expenditure on major capital equipment projects for the Services which have already been announced but the full impact of expenditure on these projects will not be felt until next financial year or later. Other major items of equipment are under study. Provision is made for expenditure of $13m in 1970-71 for the lease of 24 Phantom aircraft from the United States Government. Major works projects include the RAN receiving station at Darwin, the continued development of the Army Aviation Centre at Oakey in Queensland and the development of the airfield at Learmonth in Western Australia.
It is planned to increase the strength of the Permanent Forces during 1970-71 by about 1,400. These additional personnel are required to man new ships and aircraft coming into service, meet operational commitments and provide supporting elements in Australia. Conditions of service are under review and several adjustments in these conditions have already been made.
As to Vietnam, progress in the general security situation has been such that, as announced by the Prime Minister earlier this year, the Government has decided that one Australian infantry battalion and some supporting personnel will be withdrawn. It is planned that this will take place within the next few months.
Next to our payments to the States, the largest element in the prospective increase in our expenditure this year is welfare. These expenditures on social services, health services, repatriation, and housing benefits are estimated to increase by SI 57m to $ 1,820m. Details are given in Statement No. 10 attached to the Budget Speech.
The Government proposes to increase the maximum rates of all age, invalid and widows’ pensions by 50 cents a week. This will mean that, in terms of the maximum weekly rate of pensions, a married couple who are both pensioners will receive $27.50 a week. When they are living apart because of illness or infirmity they will receive $31 a week. A single pensioner will receive $15.50 a week. A widow with one child will receive at least $22 a week and a widow without children $13.75 a week. In addition, supplementary assistance of up to $2 a week is payable to each eligible pensioner. Persons in receipt of service pensions - which are repatriation benefits - will receive similar pension increases. So will tuberculosis sufferers in receipt of allowances and handicapped persons in receipt of sheltered employment allowances.
The rate of sickness benefit for adults, married minors and minors without a parent in Australia will be increased after six weeks to $15.50 a week, that is, equivalent to the standard rale of invalid pension. The benefit rate to apply after 6 weeks in the case of an unmarried minor will be $10 a week. In addition, a supplementary allowance of $2 a week will be paid where the beneficiary pays rent and is entirely or substantially dependent on his benefit. Persons who are in hospital and have no dependants will not qualify for these increased and additional benefits.
Sheltered workshops incur additional costs in providing training and supervisory staff, doctors, social workers, counsellors and others necessary to help handicapped employees overcome their disabilities. A $1 for $1 subsidy will be paid towards the salaries of staff engaged to provide these special services.
It is also proposed to encourage sheltered workshops to graduate more of their employees to work in open industry by paying the organisation a training fee of $500 for each eligible employee who is placed in open employment for not less than 12 months. This payment will also serve to compensate sheltered workshops for the considerable time and effort spent in training handicapped workers.
It has been found that inability to obtain suitable residential accommodation is one reason why some handicapped people are unable to accept normal employment. It is therefore proposed to extend the S2 for $1 capital subsidy now available towards the cost of hostels for handicapped people in sheltered employment, to hostels for those disabled persons who are able to engage in normal employment but still require special accommodation.
We propose a number of improvements in repatriation pensions and benefits.
The totally and permanently incapacitated war pensioner is to receive an increase of $2.00, to raise the pension to S38.00 a week.
The intermediate rate war pension, payable to those able to work only part-time or intermittently because of a war-caused disability, will be increased by SI. 50 to S28.00 a week.
The special compensation allowance, payable to certain of the more severely disabled general rate pensioners, will be increased. The increase is to be $1.00 a week for those eligible at the 100% level, grading down to 75 cents at the 75% level. The allowance at the 100% level will be $6.00 a week, bringing the combined payment of allowance and general rate war pension to SI 8.00 a week for most of those receiving pensions at the 100% rate.
Benefits for war widows are to be increased. The pension for war widows is to rise by 50 cents to $15.50 a week, and the domestic allowance that is payable to most war widows will also be increased by 50 cents, to $8.00 a week. The new maximum level of combined benefits for eligible war widows will thus be $23.50 a week.
War pensions payable for children of exservicemen who have died as a result of war service are to be increased by 60 cents to $6.00 a week for the first child and by 75 cents to S5.00 a week for the second and each subsequent child. The rate for a double orphan, that is, a child who has lost both parents, will be increased by SI. 85 to $12.00 a week.
The Government has decided to continue for a further three years from 1 July 1970 the provision of assistance towards capital expenditure incurred by the States on mental institutions. The Commonwealth assistance will remain on the basis of one-third of the total expenditure by the States on approved projects.
The Government intends to increase, from 1 September, the subsidy at present payable to approved organisations providing home nursing services. For organisations established before September 1956, the annual subsidy for each nurse over and above the number employed at 30 September 1956 will be increased from $2,600 to S3.200. For organisations formed after that date, the subsidy for each nurse employed will be increased from $1,300 to SI, 600 a year. As at present, the amount of Commonwealth subsidy payable to an organisation will not exceed the amount of State assistance received by that organisation.
The Commonwealth continues to make a significant contribution to the expansion and improvement of Australia’s education services. The greatly improved system of general revenue grants to the States over the next five years should enable them lo do much more for education which is, of course, one of their major activities. Besides this indirect assistance, Commonwealth expenditures specifically related to education are expected this year lo exceed S3 1 2m - which would bc an increase of $63m or 25%.
For 1971 the number of open-entrance university scholarships will be increased by 1,000 to 8,500, in addition to the present 4,000 later-year university awards and 2,500 advanced education awards. In 1971, the number of post-graduate awards for research training will be increased by 50 and a new category of post-graduate awards for course work leading to masters degrees will be created; there will be 100 of these new awards in 1971. In addition, a number of scholarships will be available to students who enter the new teacher education courses at the Canberra College of Advanced Education when these commence in 1971.
All told, the Government will provide over S200m this year for external aid. Details are given in Statement No. 8 attached to the Budget Speech.
Commonwealth payments to or on behalf of industry are expected to reach S272m in 1970-71, $8lm more than last year. Expenditure relating to rural industries is estimated at $2 15m, $77m more than last year.
Woolgrowers’ incomes fell steeply in 1969-70 because of lower prices for wool and, in some areas, because of drought. Those growers particularly affected by these circumstances, and who are heavily dependent on income from wool, are to be assisted by a one-year scheme of emergency relief. Within a total amount of $30m, the Commonwealth will make payments to woolgrowers based on the fall in their gross proceeds from wool between 1968-69 and 1969-70 beyond a certain percentage, and subject to a number of conditions. Details will be announced shortly.
The scheme is regarded as an interim measure pending consideration of other possible action appropriate to the longer-term problems of the woolgrowing industry. In particular, the Government is examining the need for reconstruction in the wool industry including as one aspect of reconstruction the question of growers’ indebtedness, and of ways in which the Commonwealth can most effectively assist. The Minister for Primary Industry will submit a report to the Government on these matters. The Government will also examine all aspects of the setting up and operation of the proposed statutory wool marketing authority. These investigations will be pursued as matters of urgency.
Provision is made for Commonwealth expenditure of $2. 9m in 1970-71 towards costs of handling and brokers’ administration charges relating to the price averaging plan that the Australian Wool Marketing Corporation Pty Ltd has now commenced to operate. In addition, the Commonwealth has offered to meet for 3 years any losses incurred by the Marketing Corporation on resale of wool purchased at the end of a price averaging period.
The selling of wool by samples, the properties of which would be scientifically measured and made known to buyers before sale, is considered to offer the prospect of substantial economies for the woolgrowing industry. We have decided to support a programme of research and trials on pre-sale objective measurement of wool. The estimated cost over a period of about 2 years is nearly S1.5m, of which about §650,000 will be spent in 1970-71. Commonwealth contributions towards the costs of wool promotion and research in 1970-71 are expected to total $29m, compared with $13m in 1969-70; growers’ contributions have been reduced, as from 1st August 1970, from 2% to 1% of the value of wool sold.
The Government has also agreed in principle to guarantee approved borrowings by the Australian Wool Board for the construction and equipping of integrated wool selling complexes.
It is estimated that advances for capital purposes will amount to S443m, an increase of S78m.
A large part of this increase comprises an estimated rise of $52m in advances to Qantas Airways Limited and the Australian National Airlines Commission. These advances are required mainly for the airline re-equipment programmes and are expected to be financed from loans raised overseas for this purpose.
New items in this year’s estimates include $25m as an initial capital subscription to the Australian Industry Development corporation and $800,000 as working capital for the new Snowy Mountains Engineering Corporation.
An amount of S2.4m is provided for expenditure by the Australian Atomic Energy Commission in connection with the proposed nuclear power station at Jervis Bay.
A provision of $60m has been made for War Service Homes, an increase of $5m over the amount provided last year.
An amount of $240m - $7m more than last year - will be provided to the Post Office to help finance expansion and renewal of facilities. Towards the same purpose the Post Office expects to provide SI 68m from internal sources - mainly depreciation funds - making a total for capital requirements of S408m.
To avoid a Post Office loss this year, and to enable the Post Office to make its contribution to financing the desired capital programme, it is proposed to raise charges to increase receipts by about S42m in 1970-71 and about $53m in a full year. The proposed increases cover postal charges, telephone rentals, the telephone connection fee and charges for certain other services. Further details will be available shortly.
Post Office policy on the provision of telephone services in country districts has been reviewed. With effect from January 1969 the Post Office will provide rural subscribers with a greater length of line than previously, so reducing the amount subscribers are required to finance. A statement in more detail will be made on this.
In 1970-71, expenditure on other capital works and services is estimated to total S247m, an increase of S54m or 28%.
We propose to provide SI 0.4m for special Aboriginal advancement programmes in 1970-71. After taking account of the balance in the Aboriginal Advancement Trust Account, an amount of SI 1.3m will be available for expenditure this year on these programmes.
In accordance with the undertaking given in the Prime Minister’s Election Policy Speech, provision has been made in the estimates for the introduction of a vocational training scheme for married women and adult single women who, because of changes in their domestic responsibilities, wish to enter or re-enter the work-force. Details of this scheme will be announced shortly.
Grants in support of Performing Arts
Grants in support of the Performing Arts will be increased by 45% to a total of $3.85m.
page 15
On the basis of existing rates of taxation it is estimated that receipts in 1970-71 would total $7,922m, an increase of S840m or 11.9%. This estimate is based on the expectation that 1970-71 will see a continued strong rise in incomes and general buoyancy in spending.
Total expenditure in 1970-71 is estimated to be S7,883m. This is $39m less than the estimate of revenue I have just cited. But I have already said that the Government proposes to reduce personal income taxation at an estimated cost to revenue in 1970-71 of S228m. Especially on grounds of equity, we consider a reduction of this magnitude to be justified and we do not think it should any longer be deferred. Obviously, therefore, we have to raise additional revenues if a balanced budget is to be achieved.
At this point also I wish to state that the Government will introduce, as part of the Budget, legislation to impose receipts duties the revenue from which will be for the benefit of the States. The history of these receipts duties is well known to honourable senators. It should be enough for me to say here that, unless receipts duties are imposed by Commonwealth legislation, there will be a heavy loss of revenue to the States with crippling effects on State Budgets.
We propose to increase the rates of customs and excise duty on cigarettes and cigars by 50 cents per lb and on manufactured tobacco by 20 cents per lb. lt is estimated that these increases in duty will yield $20m in 1970-71 and $3lm in a full year.
Along with tobacco, alcoholic beverages have been a traditional source of revenue both in Australia and in many other countries. In Australia, however, there has been one type of alcoholic beverage which, with a minor exception, has not been subject to excise duty al all. I refer here to wine. Consumption of wine has been rising strongly from year to year and, in the light of this trend, the evident profitability of wine production, and the heavy taxation levied on other forms of alcoholic beverage, we have decided that a moderate excise duty of 50 cents per gallon should be placed on locally produced grape wine and that there should bc a corresponding increase of 50 cents per gallon in customs duty on imported wine. This is equivalent to a duty of just over 8 cents a bottle. The excise duty will not be levied on small amounts of wine produced by ‘home wine producers’ for their own use. Concurrently, we propose to remove the duty on spirit used to fortify wine. It is estimated that these customs and excise duties on wine will yield SI 2.7m in 1970-71 and $ 15.2m in a full year. The removal of duty on spirit used to fortify wine is expected to reduce revenue by $0.85m in 1970-71 and Sim in a full year.
Finally, within the customs and excise field, we propose to increase duties on certain petroleum products currently subject to excise duty. Demand for petroleum products has been growing strongly. Moreover, the taxation of such products in Australia is much lighter than in most comparable countries. We propose to increase by 3 cents a gallon the excise and customs duty on motor spirit, automotive disillate used in road vehicles operating on public roads, aviation turbine fuel and aviation gasoline. The yield in 1970-71 is estimated at$63m and in a full year at $79.6m.
The Government has decided to increase the rate of sales tax on goods currently in the 25% class to 271/2%. Cars and station wagons, radios, television sets, etc, are the principal goods affected. The estimated increase in revenue in 1970-71 is $23m and, in a full year, $29m.
The Government appreciates that gains in productivity depend in large measure on business investment and that prospects of good profits have a big part in incentives to investment. Nevertheless, in current circumstances in which investment opportunities abound and profits are generally high, we think it reasonable to levy a higher tax on company profits and thus help to raise revenue to bring the Budget into balance. This will, moreover, spread more widely throughout the community the benefits of the generally profitable outcome of companies’ operations.
Our proposal is to add 2.5 cents in the dollar to the rates on taxable incomes of companies. The general company tax - on all except the first$1 0,000 of taxable income - would then become 47.5 cents in the dollar for public companies and 42.5 cents for private companies. It is estimated that the proposed increases, which will apply to incomes derived by companies during the income year 1969-70, will add$76m to revenue in 1970-71.
The licence fee for radio communication services, licensed under the Wireless Telegraphy Act, has remained unchanged at$2 a year since 1924. Proposed increases in the fee for most services, to either$6 or $10 a year depending on the type of service licensed, are expected to yield additional revenue of $460,000 in 1970-71 and $620,000 in a full year.
To help meet the rising cost of providing marine navigation aids, it is proposed to increase charges to shipping - known as light dues - from 18 cents to 20 cents per net registered ton per quarter. This is expected to yield additional revenue of$450,000 in 1970-71 and $600,000 in a full year.
In accordance with our policy that the air transport industry should progressively meet a greater proportion of the costs incurred in providing and operating airports and airway facilities, it is proposed to increase air navigation charges by 10%, with effect from January, 1971. The increased charges are expected to yield additional revenue of$850,000 in 1970-71 and$1. 8m in a full year.
Personal Income taxation
The increases in taxation and charges I have outlined are expected to yield, in total, $1 96m in 1970-71.I now come to personal income taxation.
On other occasions the Government has expressed its concern at the way in which the present graduated rate scale has shifted a growing share of the weight of taxation on to personal income taxpayers. In his Policy Speech last year, the Prime Minister stated our intention to improve the situation and the Governor-General also referred to this matter in his speech at the opening of Parliament last February.
With rising incomes the present scale has brought about a relatively rapid increase in personal income taxation. The revenue so obtained was needed to meet our commitments, but there is no doubt that, in the process, inequity has grown into the system. In real terms there have been increases in effective rates of tax at most levels of taxable income, but the increase has not been the same at all levels, and that is the particular source of inequity which concerns us.
To provide relief on an equitable basis it has been necessary to prepare a new general rate scale. As is at present the case, tax payable will be the sum of the amount calculated at the general rates and a 21/2% levy. Tableswill be made available in which tax payable under the new and the old scales is compared at various levels of taxable income. The new rates will apply to 1970-71 incomes and a new scale of tax instalment deductions from wages and salaries will operate from 1st October 1970.
On taxable incomes up to Si 0,000 there will be a reduction of some 10% in tax payable. Above SI 0,000 the percentage reduction in tax will taper off, reaching 4.4% at $20,000 and cutting out altogether at $32,000.
In deciding on this kind of revision, we have had regard to the way in which the incidence of the effective burden of tax has been altered by past rises in incomes. Effective tax rates have increased more on lower and middle incomes than on higher incomes, and in giving some relief from the effects of the past trends, there is a clear case for ensuring that most of the relief will go to lower and middle income earners. In the result there will be increases in the takehome remuneration in the income ranges where it :s most needed. This should serve to strengthen incentives for people in those groups; this is an objective to which we attach great importance.
We propose to increase the relief given through the income tax age allowance to residents of Australia who are of qualifying age. that is 65 years for men and 60 for women. At present no tax is payable by an aged person whose taxable income does not exceed 31.300 or by a married aged person unless the combined taxable income of husband and wife exceeds $2,262. In line with the proposed increase in maximum pension rates, these exemption levels will be raised to Si, 326 and $2,314 respectively. Some further relief will also be given by adjustments to the ‘shading-in’ arrangements which limit the tax payable by an aged person with a taxable income somewhat greater than the exemption level. The changes to the age allowance are estimated to cost $2m in 1970-71 and $3m in a full year.
page 17
Let me now sum up the Budget. After bringing to account the changes in taxation and charges I have described, total receipts in 1970-71 are estimated to be $7,887m, or 11.4% more than last year. Since total expenditure is estimated at $7. 883m the Budget shows a surplus of $4m.
Within this overall result there would, on present figuring, be a surplus of domestic receipts over domestic expenditure of the order of $550m which would be about $50m greater than the actual domestic surplus in 1969-70.
It is of course not possible, at this early stage of the financial year, to predict with certainty and precision what the ruling trends and events will be through the months ahead. It would be rash to claim that the Budget will prove to be exactly suited to the requirements of the Australian economy through 1970-71. In any case, strong and pervasive though its effects can be, the Commonwealth Budget does not determine the whole course of our economic affairs. A multitude of initiatives and decisions on the part of others have a share in that. In particular, excessive demands for increases in money wages and other incomes - -especially when pushed ruthlessly in conditions of full employment - could jeopardise prospects of balanced growth.
In general, we see the probability of further strong growth, the one exception to this being the rural sector where highly adverse conditions could to some extent offset the rise in both output and demand which is likely to occur elsewhere. There has been some check in recent months to the overexpansive conditions of the preceding period. We do not want those conditions to return - as they undoubtedly could in the absence of restraint.
Whilst, therefore, we are in no sense trying, through the Budget, to slow down the rate of growth, we are seeking to ensure that the Budget will not add impetus to demand in general. Domestic outlays have been kept to much the same rate of increase as last year while the net effect on demand of the taxation changes will not be significant. Moreover, we calculate that the domestic surplus for which it provides will work against the development of excessive liquidity. We have sought to make this a precautionary Budget but not a repressive one.
page 18
Tn introducing a balanced Budget we have kept firmly in mind the need to help create conditions under which sound economic growth may proceed.
We have made provisions which secure to the State Governments a larger and growing share of our gross national product. At the same time this Budget helps to achieve other great national objectives in important areas such as defence, social welfare and the economic welfare of industry - including our great woolgrowing industry that is currently beset by special problems.
Finally, we have made a great effort in this Budget to provide substantial income tax relief to those in the lower and middle income groups.
Debate (on motion by Senator Murphy) adjourned.
Senate adjourned at 8.52 p.m.
Cite as: Australia, Senate, Debates, 18 August 1970, viewed 22 October 2017, <http://historichansard.net/senate/1970/19700818_senate_27_s45/>.