House of Representatives
26 September 1951

20th Parliament · 1st Session

Mr. Speaker (Hon. Archie Cameron) took the chair at 3 p.m., and read prayers.

page 35


Returns to Writs: Mr. P. E. Joske and Mr. A. S. Luchetti Sworn.


– I have to announce that I have received returns to the writs which I issued on the 28th June last for the election of members to serve for the electoral divisions of Balaclava, in the State of Victoria, and Macquarie, in the State of New SouthWales, to fill the vacancies caused by the resignation of the Honorable Thomas “Walter White and the death of the Right Honorable Joseph Benedict Chifley, and that, by the endorsement on the writs, it is certified that Percy Ernest Joske and Anthony Sylvester Luchetti have been elected in pursuance of the said writs.

Mr. Joske and Mr. Luchetti made and subscribed the oath of allegiance.

page 38


Prime Minister · Kooyong · LP

– I desire to submit a motion to the House with reference to the illness of His Majesty the King. I move -

Thatwe, the Speaker and members of the House nf Representatives of the Commonwealth of Australia in Parliament asaembled, express our deep sympathy with His Majesty theKing, Her Majesty the Queen and the members of the Royal Family in the illness of His Majesty. We are gratified that His Majesty is recovering from his serious operation and we fervently hope that he may be speedily restored in health and strength.

Honorable members, of course, are well aware ofthe fact that His Majesty’s health has given rise to anxiety and that he recently underwent an operation. The last advice which is available about His Majesty’s condition indicates that he is continuing to gain strength, and there is a feeling of substantial optimism about his relatively speedy recovery. Not only is this Parliament concerned with His Majesty’s health, but we have also had much in mind the possible effect of his illness upon bis projected visit to this country. I think, therefore, that I should say tp the House that in the middle of June last, after having had some discussions with the Prime Minister of New Zealand, I communicated through the proper channels to His Majesty an expression of our view on that matter. Honorable members may be interested to know the terms in which the matter was stated on that occasion by me, because that view still stands. The communication was as follows: -

We are, of course, conscious of the deep desire of all Australians and New Zealanders that there should be an opportunity fora direct and personal expression of our loyalty to the throne, and our deep and affectionate regard for Their Majesties and their family, but we would be distressed if we thought that His Majesty, felt in any woy obliged to accept unnecessary risks to his health or constrained to place undue burdens on his nervous and physical energy. Having this feelinz, both Mr. Holland and I would like His Majesty to reconsider the matter without any sense of commitment. Would he like even the proposed programme modified? Would he like some postponement? Would he prefer that the tour should he made by Her Majesty and/ or Princess Elizabeth and/or Princess Margaret? In brief, we want to help and will fall in with any arrangements that may be proposed.

I should think that that statement, which was conveyed on the 15th June of this year, would express the general opinion of all honorable members and of all the people of Australia. The present position is that until further medical advice has been obtained after future consultations, no decision will bema de upon the carrying out of the arrangements which have already been made, but I anticipate that within the next week or two we shall be in a position to know the result. In the meantime, it is, I am sure, the warm desire of everybody in the House and in the country that we convey to His Majesty the expression of our loyalty, affection and deep sympathy with him in his illness.

Leader of the Opposition · Barton

.- On behalf of the Parliamentary Labour party, which is His Majesty’s Opposition in this Parliament, I have the honour to second the motion. I expressed the views of the Labour party on this subject during the last sessional period. It is certain that the enormous strain of the war, and the unremitting labours of His Majesty during that struggle, have helped to contribute to the deterioration of his health which, we hope, is only temporary. I entirely agree’ with the statement by the Prime Minister (Mr, Menzies) in which it has been made clear, not only to His Majesty, but also to the members of the Royal family, that the affection and loyalty of all the people in this country to the King do not depend upon personal visits, much as we desire them and would welcome them. All of us trust that His Majesty will long be spared in good health to continue his reign over all his subjects throughout tho British Commonwealth.

Question resolved in the affirmative.

page 38


Acknowledgment by His Majesty The King.


-I desire to- inform the House that I have received from His Excellency the Administrator the following communication in connexion with the Address-in-Reply : -

Mr. Speaker, 1 desire to acquaint you that the AddressinReply at the opening of the Twentieth Parliament of the Commonwealth of Australia has been laid before His Majesty the King, and I am commanded to convey to you and to honorable members, His Miljesty’s sincerethanks for the loyal message which your Address contained.

  1. Northcott

Administrator. 19th July, 1951

page 37


The followingbills were returned from the Senate without amendment : -

Ministers of State Bill 1951.

Defence Bill 1951.

Defence Preparations Bill 1951.

page 37


Assent to the following bills reported : -

Commonwealth Bank Bill 1951.

Ministers of State Bill 1951.

Conciliation and Arbitration Bill (No. 2) 1951.

Defence Bill 1951.

Defence Preparations Bill 1951.

page 37



Prime Minister · Kooyong · LP

– During the last sitting of the Parliament an amendment to the Ministers of State Act was approved by which the maximum number of Ministers was increased from nineteen to twenty. I have pleasure in formally announcing to the House that, following this amendment, I appointed the honorable member for Lowe (Mr. McMahon) to be Minister of State for the Navy and Minister of State for Air.

Honorable Members. - Hear, hear!


– I also announce to the House that, during the absence in London of the Minister for Commerce and Agriculture (Mr. McEwen), the Minister for Shipping and Transport (Senator McLeay) will act as Minister for Commerce and Agriculture.

page 37



Double Dissolution


– I remind the Prime Minister that some months ago, on behalf of the Opposition, I requested that the ordinary procedure be followed in connexion with the grant by His Majesty’s representative in Australia of a double dissolution of the Nineteenth Parliament under section 57 of the Constitution, and that the official papers and the advisings of the Prime Minister or his Ministers, or Government officials, to the GovernorGeneral be placed on the table of the House because of the importance of the constitutional precedent that was involved. The Prime Minister then undertook to treat my request as a question asked upon notice, but to-day I have read in the newspapers that the request is to bo refused because otherwise the GovernorGeneral might be embarrassed. I ask the Prime Minister whether that is a correct statement of the position. If so, will the right honorable gentleman reconsider his decision, because neither I nor any other member of the Opposition is in the slightest degree interested in anything except the assertions of fact or of constitutional law or practice that were made by responsible Ministers in the documents that passed from them, or on their behalf, to the Governor-General. It is on that basis that constitutional practice in this country is established and, without the information that I seek nobody can say what the constitutional practice is. I assure the Prime Minister that embarrassment to the GovernorGeneral would be in no sense involved.


– I have given consideration to this matter. I agree that the communications that passed between myself and the Governor-General and between His Excellency and myself on the occasion of the request for a double dissolution and the granting of it are of first-class historic and constitutional importance. They must, therefore, be tabled at a proper time. I do not propose to table them at a time when they would give rise to discussions in which the present occupant of the position of GovernorGeneral would be involved.

page 37




– I ask the Prime Minister whether the Government will do everything in its power to arrest the decline in agriculture and, in particular, to secure adequate returns from longterm overseas contracts for the sale of food. I direct his attention to the decline of food production due to the loss of rural producers, who constitute easily the most efficient section of Australian industry, and to the consequent reduction of the standard of living and our export income and to the unbalancing of the national economy.


– The Government shares the anxiety of the honorable gentleman about the food producing industries of Australia and has given much attention to the problems involved. The honorable gentleman referred particularly to long-term contracts made with other countries. The Minister for Commerce and Agriculture is at present abroad, specifically engaging, on behalf of the Australian industries concerned, in discussions upon that matter.

page 38




– Is th’e PostmasterGeneral aware that there are still large numbers of people, including many returned servicemen engaged in business, awaiting the installation of telephones which it has not been possible to install owing to a shortage of labour in the Postal Department? If the Minister is aware of that position, will he say whether he has taken any steps to countermand the dismissal notices that have been issued to many men employed in the technical branch of the Postal Department, which is engaged upon the installation of telephones? Will he endeavour to ensure that all outstanding applications for telephones shall be satisfied as soon as possible ?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– It is true that there are many outstanding applications for telephones, not only in Adelaide but also in every other city. “We are short of essential equipment. It will not be of much use to have labour available unless we can obtain supplies of the materials that we need. Until we obtain those supplies, we shall not he able to remedy the position.


– I ask the PostmasterGeneral whether it is a fact that, in order to bring the rate charged for public telephone calls into line with that charged for calls from private telephones, it is intended, when the necessary equipment is available, to increase the public telephone call rate to threepence? Can the Minister indicate when such equipment will be available? Will he also investigate the possibility of the equipment being such that the duration of a public telephone call can be limited, thus overcoming the necessity of queues waiting to use public telephones and, at the same time, increasing the earning capacity of the public telephone system ?


– There is no intention at the moment to increase the charge for calls from public telephones. If such a step is proposed at any time I shall give consideration to the honorable member’s suggestion.

page 38




– My question, which ii directed to the Minister for Social Services, relates to the sums that are deducted, from the pensions paid to age pensioners who are inmates of State institutions. During the previous sessional period, I addressed a question to the Minister on this matter and the honorable gentleman promised that he would investigate the possibility of correcting an anomaly which exists because the sum deducted by the Commonwealth from these age pensioners and paid to the State governments is in excess of the sum that the State governments claim from other inmates of the institutions. Has the Minister completed hi, investigations? If so, what are his findings? If not, can he indicate whether the investigations will be completed at an early date?

Minister for Social Services · DENISON, TASMANIA · LP

– The honorable gentleman has approached me upon thi? matter on several occasions and has made very strong representations to me. Over a ‘ period of years, successive governments have allotted to an age pensioner in a State institution 35 per cent, of the age pension, and have allocated the remainder to the institution as payment for the care and maintenance of the pensioner. In Queensland, and in some institutions in other States, persons other than age pensioners receive preferential treatment because they are charged only £1 ls. a week, while pensioners are expected to pay 32s. 6d. a week. I have made a very close examination of this matter, but I am not yet in a position to announce a decision. I hope to be able to do so in the very near future.


– Will the Treasurer give consideration to making any increases of age and invalid pensions for which provision may be made in the budget retrospective to the 1st July and, by doing so, make amends for the suffering that pensioners have -experienced while trying to live on £2 10s. per week?


– If the honorable gentleman will wait for a little while longer, his patience will be rewarded.


– I ask the Minister for Social Services whether it is a fact that the Social Services Consolidation Act makes it incumbent upon an applicant for an age pension to state fully hi3 financial position for only five years previous to his application? If that is so, is the Minister aware that an age pensioner who won £5,000 in the State lottery nine years ago, when he was 72 years old, and is now penniless, was refused a full pension ? Does the Minister consider that this very old man who is now over 80 should be permanently penalized because he is unable to account for his expenditure of every penny of the £5,000 during the preceding eight years while new applicants have only to state their financial position during the five years previous to their applications?


– I am aware of the provision in the Social Services Consolidation Act to which the honorable member has referred. It gives rise to anomalies. Those anomalies have been examined. The one to which the honorable member has referred will probably be removed by an amending bill that will be introduced during the current sessional period.

page 39




– Can the Minister for Immigration say whether, in view of the widespread dismissals of employees of the Postmaster-General’s Department and other public servants, as well as of workers on public works and hydro electricity projects, the Government will give consideration to re-casting its immigration policy with a view to reducing the intake of immigrants for at least twelve months? The workers being dismissed include thousands of Australian men and women, many of whom will not be able to find suitable employment elsewhere. Is the Minister aware that the sacking of Australian workmen on the one hand, and the ever increasing inflow of immigrants on the other, are causing bitterness and grave concern throughout Australia?

Minister for Immigration · HIGGINS, VICTORIA · LP

– During the parliamentary recess the Government made a thorough review of its immigration programme. An announcement has already been made by the Prime Minister following on these discussions. I can assure the honorable member that neither he, nor any of the people on behalf of whom he claims to speak in connexion with this matter, need have any fear that there will not be adequate opportunities’ for employment available to any Australians who, as a result of the economic measures adopted by the Government, are no longer required in the Government service. Indeed, at the moment the Department of Labour and National Service, has more than 125,000 vacancies registered and that number docs not by any means cover the total number of vacancies in the Commonwealth. Experience has revealed that the influx of immigrants has certainly not reduced the opportunity of obtaining work in Australia. In fact the number of vacancies for work has steadily increased with the flow of immigrants. The reasons for that are fairly obvious. I can assure the honorable member that my difficulty at the moment is not to place in employment Australians who are seeking work but to deal with the myriad of requests for labour that come to the Department of Labour and National Service from people engaged in essential industries who have the capital equipment but have not the necessary labour. Included anions; those industries are timber mills in Western Australia, agricultural machinery work3 in many parts of the Commonwealth, the coal, steel and cement industries which are starved for labour at the present t.:me. I assure the honorable member that there are excellent openings for work at good rates of pay for literally tens of thousands of Australians and others who are vital to us at the present time.


– Can the Minister for Immigration inform me whether it is a fact that the Kapooka immigrant camp at Wagga is to be taken over by the

Army, and the Uranquinty camp by the Air Force? If that is a fact, will the Minister reconsider the decision because these two camps, supply a considerable amount of immigrant labour for local industries, and any decision to close them down must have an adverse effect on the decentralization of industry.


– Following upon the Government’s examination of our immigration programme there has been some review of immigrant reception and holding centres. I do not think that it is intended to close down the Kapooka camp, certainly not in whole. I believe that there will certainly be immigrants in residence in the Wagga district at that centre. As to the Uranquinty camp, ,it is true that there is to be a transfer back to the Air Force, but I shall obtain more information on the matter and furnish an official reply to the honorable member as soon as I can.


– Can the Minister for Immigration indicate whether Australian immigration authorities overseas are making any special efforts to obtain a greater proportion of immigrants who are prepared to enter full-time employment in rural industries? As the shortage of labour in many primary producing areas has now become critical, is the Minister prepared to arrange a high priority for the provision of immigrant hostels in provincial centres particularly in instances in which approval has already been granted for the establishment of such hostels?


– We are conscious of the need for additional labour in rural districts and our officers overseas have been asked to obtain as many rural workers as they can from among those who offer for selection under the various schemes now in operation. I may say that there, as here, a relatively small proportion of persons are prepared to go into rural industries and, therefore, it is not easy to find the numbers that are immediately required. With respect to the construction of immigrant hostels in country districts it has, unfortunately, been found necessary to defer for some considerable time the construction of a number of hostels which had previously been approved. I am hoping that in view of the fact that the Government has taken this decision in order to reduce the demand upon its own services in the way of capital works of this character, local government authorities and voluntary organizations in the districts concerned will themselves see what they can do to meet the position from their own resources. This has already been, done in a number of districts. For instance, members of the ‘Colac Caledonian Society, living up to the splendid tradition of the Scot, are selecting good Scottish immigrants and are finding employers in the district to take them into their homes. I hope that that process can be carried out in other districts. My own department is trying to work out a practical scheme along those lines.


– As the Minister for Immigration is no doubt aware, immigrants who come here from Holland are permitted to bring only a very small amount of money with them when they leave that country. Will the Minister approach the Dutch Government with a view to obtaining some amelioration of that treatment?


– I am aware that some currency limitation has been imposed by the Dutch authorities upon Dutch settlers who are coming to this country. Discussions have- taken place between the Australian Government and the Dutch Government, and I shall ascertain whether I can supply the honorable gentleman with some information about the matter to which he has referred.


– I should like the Minister for Immigration to give me some information about the attitude that is adopted by the Government towards immigrants - many of them murderers and vicious criminals. Are such persons to be kept in Australia? If they are not to be retained here, when will they be deported ? How many of those new Australians, if any, have been deported during the last twelve months?


– I very much regret that the honorable member for Lang should see fit to make a general statement or general charge of that character against a body of people who, according to statements by the Commissioner of Police in Victoria, the Acting Commissioner of Police in New South Wales and other police authorities, have committed fewer offences, proportionate to their numbers, than have members of the Australian community.

Conversation, being audible,


– Order ! I must ask the House to maintain order. This day is important, and honorable gentlemen must contain themselves.


– Law breakers will bo found among immigrants as among any other section of the community, but, fortunately, the Government has even more complete powers to deal with immigrants than it has to deal with sections of the community. The general policy which the Government follows, and which has obtained under the Immigration Act for many years, is that an immigrant who has been convicted of an offence that is punishable with a term of imprisonment of more than twelve months becomes liable to deportation. My predecessor and I have exercised that power suitably when we felt that its exercise was proper. I have been asked how many persons have been deported for criminal offences during the last twelve months. I have here figures for the period during which this Government has been in office, and I find that I have issued 78 orders for deportation from this cause. During a comparable period, my predecessor issued 59 deportation orders.

page 41




– In view of the vast amount of conjecture regarding the future of Trans-Australia Airlines, I ask the Prime Minister whether he will inform the House whether Australian National Airways Proprietary Limited has indicated to the Government that it is unable to continue its passenger services under existing conditions, and is consequently seeking an amalgamation with TransAustralia Airlines; and, if so, what negotiations, if any, have so far been entered into ? I further ask him whether, having regard to the future of Australian air services, he agrees that the interests of the public would be best served by the retention of truly competitive airlines in preference to either a government or a private monopoly?


– The statements that have appeared in the press concerning the matter to which the honorable member has referred have been entirely without foundation. They are purely of a speculative kind. The present position is that the Government has had in hand investigations into all the circumstances of both of the major airline operators mentioned by the honorable member, including their financial circumstances, so that it may have before it, as it always likes to have, all the facts, in order to arrive at a conclusion. When the facts have been presented to the Cabinet they will be considered. So far no consideration has been given to the matter.


– I desire to address a question to the Minister for Civil Aviation and I point out, by way of explanation, that the Department of Civil Aviation has stated that if local councils build aerodromes which become stopping places on regular routes, the Government will reimburse them for the expenditure that they have incurred. Does the Minister give any guarantee or assurance that the Department of Civil Aviation, when it takes over such an aerodrome, will fully reimburse the council concerned for the money that it has expended upon the construction of tha air field, or is it possible for the amount of reimbursement to be smaller than the actual expenditure? Has any standard number of arrivals and departures a week been set as the necessary number for an aerodrome to be taken over by the department?


– Each of these cases is naturally determined according to individual circumstances, and, consequently, no set rule is laid down. Aerodromes are taken over by the Department of Civil Aviation if time and usage demonstrate that they are of a permanent nature and that they fulfil the conditions of eligibility. Each case is judged on its particular circumstances.

page 41




– I ask the Prime Minister whether representations have been made to him concerning an American firm which proposed to develop a new mine by modern methods in the Greta coal area where spontaneous combustion causes about 50 per cent, of potential coal production to be lost? This firm has a method by which it can obviate the danger of spontaneous combustion. In this area the coal is of the richest calorific value in the world both in regard to its gas and oil content. In view of the fact that you cannot receive a deputation yourself I would introduce a deputation-


-Order ! What is the honorable gentleman’s question?


– I desire to know whether the Prime Minister will obtain a report regarding the company to which I have referred which is prepared to spend £.10,000,000 sterling in developing this coal seam. If there is one thing more necessary than another in the coal industry it is the avoidance of spontaneous combustion.


-Order ! The honorable gentleman must ask a question.


– I ask the Prime Minister whether he will obtain information horn the Minister for Supply on whether it is proposed to welcome these people to this country?


– I have no personal knowledge of this matter.

Mr James:

– I spoke to the right honorable gentleman about it.


– I still have no personal knowledge of it. However, I shall certainly make inquiries and advise the honorable member on the matter.

page 42




– Will the Minister for Air supply the House with any information that may be available in relation to reports from Korea concerning the grounding of the Meteor Mark VIII. aircraft of No. 77 Squadron of the Royal Australian Air Force?

Minister for Air · LOWE, NEW SOUTH WALES · LP

– I have heard reports, not from Korea but from London, that the Austral:an Meteor Squadron has been grounded.. Those reports are inaccurate. Last Thursday Meteors carried out independent operations on a fighter sweep and as overhead cover for United States bombers. The Meteors are flying well.

The honorable member for St. George will probably be interested to know that the Meteors are the best aircraft that the Government can buy. It is perfectly true to say that the Russian M.I.G. has a slight superiority over the Meteor in speed when flying on the level and somewhat faster still in a dive. In other respects such as manoeuvrability, rate of climb and armaments, the Meteor is better than the M.I.G. Our own airmen are accepted as being the finest fighters in the Far Eastern Air Command. The Meteors are the best aircraft that can be obtained, the Squadron is fighting fit and, so far as the Government is aware, these aeroplanes will be used for some considerable time to come. It is still premature to judge their comparative performances.

page 42




– Can the Prime Minister inform the House why the United States Government refused a visa to Professor Oliphant, an outstanding Australian scientist, for the purpose of permitting him to attend a conference of atomic scientists in Chicago?


– I have no information at all about that matter. It is one that would be dealt with solely by the United States of America. I know nothing of it, nor does my colleague, the Minister for Immigration, who is in charge of the department that controls passports.

page 42




– I have received a letter from a woman who has been nine years in the service of the Postal Department. In that letter she informed me that she has received a fortnight’s notice of dismissal, but that actually she has been rostered to work overtime to the very day upon which she is to finish work. I ask the Postmaster-General what method was adopted in his department to single out those who are to be dismissed in conformity with the Government’s nian to dismiss 10,000 public servants? Does he think that he will improve the service of hi= department to the public bv giving dismissal notices to people who will h.ivp to work overtime to the day upon which they are to cease duty? Was any special method adopted to select those who are to be dismissed from the service? Generally speaking, is it a fact that if people are dismissed from the particular section of the department in which this woman works, one of two things must happen - either the service rendered to the public will become inefficient, or an excessive amount of overtime will have to be worked by those who remain in the service ?


– As the honorable member for Dalley is aware, there has been a reduction of staff in the Postal Department of between 3,500 and 4,000 employees. Of course the Postal Department employs about half the Commonwealth public servants, and consequently the number of employees dismissed from that department has teen greater than elsewhere.

Mr.Rosevear. - My question related to the volume of work.


– The matter of the volume of work and which persons were to stay and which to go, was left to the departmental officers who administer each department, and it is on their advice that the Director-General has acted and will act. The general principle involved in the dismissals is that the great majority of those who are to he retrenched would normally have been dismissed because of the cessation of certain work due to the non-availability of materials.

Mr.Rosevear. - But the woman to whom I referred is working overtime.


– That may be so, but in any case overtime can be worked to the last day of employment and arrangements made for the work done in overtime to be carried on thereafter in some other way.

page 43




– On a previous occa sion I asked the Minister for Social Services whether steps would be taken to increase the maximum amount of loan which could be made available to homebuilders under the War Service Homes Act. I now ask whether the Minister has considered this matter and whether he has made any recommendation to Cabinet. If so, what is Cabinet’s decision?


– The matter the honorable member has raised has been most carefully considered and the result of that consideration will be made known within a very few hours.


– As rentals for houses now being completed for the Government in Canberra are quite beyond the capacity to pay of men in the lower or even the average ranges of salaries and wages, can the Minister for the Interior state whether he is having action taken to reduce rentals of new homes by subsidy, by the extension of rental rebates, or by other means? Further, as a means of reducing the cost of home building, has the Minister given consideration to the abolition of the wasteful cost-plus system of contracting, the extension of day-labour building, and the abolition of overtime ?


– The honorable gentleman would not remember, because he was not the member for the Australian Capital Territory at the time, but shortly after this Government came into office in December, 1949, a rebate of 20 per cent. on the rents of houses which had been completed after September, 1948, was allowed. When I became the Minister for the Interior, I found that rents were assessed on the basis of 5 per cent. of the cost of a dwelling, irrespective of whether it had been erected in the 1920’s, the 1930’s or the 1950’s. I have asked the Department of the Interior for a complete survey of the rent position, and that is now being undertaken. Finally, I point out to the honorable gentleman that the previous Labour Government instituted a five-year contract on a cost-plus system, whichI cannot break.

page 43




– By way of preface to a question that I address to the Minister representing the Minister acting for the Minister for Commerce and Agriculture, I direct attention to the present alarming position regarding wheat supplies. I am advised that there is simply not enough wheat available in this country to feed our poultry and pig populations and that farmers are being advised, as the only solution to the crisis, to slaughter their flocks and herds. Will the Minister take immediate steps to ascertain what relief can be effected? Can he assure the House that no wheat is being exported? “With respect to next season’s crop will he investigate the desirability of permitting the pig, poultry and dairying industries to be represented when domestic and exports quotas are being allocated?


– I shall refer most of the points that the honorable member has raised to the Minister acting for the Minister for Commerce and Agriculture. However, with respect to exports, I remind the honorable member that under the International Wheat Agreement, which was entered into by the previous Government and which is being honoured by this Government, we shall export a certain quantity of wheat each year. The present Government is obliged to honour that agreement. I shall answer the other points that the honorable member has raisd after I have obtained the requisite Uiformation from my colleague.

page 44




– I ask the PostmasterGeneral whether it is a fact that plans have been completed to farm out all mechanical work from the PostmasterGeneral’s Department to Amalgamated Wireless (Australasia) Limited and Standard Telephones and Cables Proprietary Limited on the cost-plus system? In view of that fact, is the department, when dismissing its technicians, suggesting by circular to them that they apply to those firms for employment? Is it also a fact that last week 40 technicians were dismissed from the job of laying the underground telegraph cable to Orange ? If so, what were the reasons for such dismissals ?


– The honorable member’s statement that Amalgamated Wireless (Australasia) Limited and Standard Telephones and Cables Proprietary Limited are going to do work that was previously done by technicians of the Postmaster-General’s Department is not a fact at all. Whatever business is being done with those firms has been done with them for years and no alteration of that arrangement is contemplated as a result of the department’s present employment policy. I am not able to say offhand what may have happened with respect to the dismissal of departmental employees in any particular locality except that what has been done has been in conformity with the policy of the Government, which has been compelled, mainly because of lack of materials, to curtail many of its projects. For instance, it would be useless to employ a dozen carpenters on the construction of a house if sufficient roofing materials for the house could not be obtained.



– I ask the VicePresident of the Executive Council whether it is a fact that a suite of offices has been prepared for his occupancy at Swanstonstreet, Melbourne? If so, for what period will he attend at such offices ? Is it a fact that the cost of preparing the suite for his occupancy was estimated at £14,000 and that that estimate has been exceeded?


– The statement that the honorable member has just made in the form of a question reminds me of some of the statements that honorable members opposite made during the recent referendum campaign. I have had no suite of offices prepared for me. I am occupying the office which was formerly occupied by the Minister for Supply, and I have had no alterations whatever made to it.

page 44




– My question is addressed to the Prime Minister. Is it correct, as reported in the daily newspapers during the recent referendum campaign, that photographs of audiences which he addressed were taken, and that they were used by the Commonwealth security service in adding names to the list of known Communists? If that report is correct, will he explain just what would be disclosed by such photographs which would, in the eyes of the Government and of the security service, establish that people who had previously been unsuspected were, in fact, Communists?


– I saw a reference to that matter in the press. I have no knowledge of it. I have no reason to suppose that it is true. I have nothing to add.


– Will the Prime Minister consider the advisability of setting aside the 22nd of September as a constant reminder to the people of Australia that it was on that day that the Labour party, by means of untruths, &c., secured . what is virtually an open season for treason in Australia? Will the right honorable gentleman invite all collaborators to take part in a procession on that day? Will he also invite the Leader of the Opposition to lead that procession ?

Question not answered.

page 45




– In view of the failure of the thirteenth security loan and other semi-governmental loans during the last few months, and the reduced price of government securities, will the Treasurer inform me whether the Government has any plan or plans for restoring public confidence in government investments? If the Government has any plans of that nature, will the right honorable gentleman be good enough to take the House into his confidence concerning them so that all parties may assist to restore the confidence of the people in government securities?


– The answer to the honorable gentleman’s question is “ Yes “.

page 45




– I ask the Minister representing the Minister acting for the Minister for Commerce and Agriculture whether it is reasonable to assume that finality will be reached in the distribution of Joint Organization wool profits in the near future?.


– It is very reasonable to make such an assumption.

page 45




– I direct a ques tion to the Minister representing the Minister who is acting for the Minister for Commerce and Agriculture. In view of the fact that the poultry industry of Australia is carried on mainly by persons with small capital who therefore are unable to sustain serious financial losses for any considerable length of time, and in view of the fact that there is no excess production of eggs or poultry in the country to-day, will the honorable gentleman confer with his colleague with the object of evolving a scheme that will be fair to the wheat-growers and will also make sufficient supplies of feed wheat available to the poultry industry to enable that worthy section of the community to carry on its business without harassing losses with which it is at present faced? .


-I shall refer the honorable member’s question to the Minister who is acting for the Minister for Commerce and Agriculture and will confer with him on the subject.

page 45


Reports on Items.


– I lay on the table reports of the Tariff Board on the following subjects: -

Culinary Herbs

Plastic Intermediate Materials

Ester Plasticizers

Internal Combustion Engines and Reduction Gear Units for Internal Combustion Engines

Carpenters’ Planes

Textile Piece Goods in Strip Form with Hooks and Eyes attached.

Hand Hacksaw Blades

Electrically operated Cloth Cutting Machines.

Metal Working Lathes

Plastic sheeting, Printed, Polished or Embossed.

Spirit Levels

Carpenters’ Chisels

Synthetic Resins


Mounted Projection Lenses


Torch Cases

Storage Battery Locomotives

Alarm Clocks

Magnet Winding Wire

Tool Tips having a basic composition of Tungsten: and Machine Tools. MetalWorking, Tipped with alloyshaving a basic composition of Tugsten, Tantalum, Cobalt, Boron, Titanium and Alloys thereof.

Felt Polishing Bobs



Portable Electric Hand Tools


The implementation of the Tariff Board’s recommendations in relation to felt polishing bobs would cause certain administrative difficulties because certain types of bobs were not reported upon by the board.

Inview of this fact, and also because the rates of duty are not affected at this stage by the board’s recommendation, the Government has decided not to implement the report but to refer the matter to the board again so that a more comprehensive investigation covering the types of bobs that were not included in the previous reference can be made.

Reports ordered to be printed.

page 46


Motion (by Mr. Eric J. Harbison) agreed to -

That the House, at its rising, adjourn to to-morrow, at 2.30 p.m.

page 46


Formal Motion for Adjournment


-(Hon. Archie Cameron). - I have received from the Leader of the Opposition (Dr. Evatt) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely -

The actions of the Government in dismissing 10,000 employees from the Public Service of the Commonwealth.

Leader of the Opposition · Barton

.- I move -

That the House do now adjourn.


-Is the motion supported ?

Eight honorable members having risen in support of the motion,


– I submit the motion on behalf of the Opposition, which has considered the subject of dismissals from the Public Service. The motion will be seconded by the honorable member for Burke (Mr. Peters), who, with other honorable members on this side of the House, has taken a keen interest in the matter because of the position that he occupies in the Commonwealth Public Service Clerical Association. The matter is one of great urgency. The decision of the Government was announced suddenly on Friday, the 20th July last. The Parliament was not then sitting, and it had no opportunity to consider the matter. Not the slightest intimation of such a proposal had been given td it previously. The report of the announcement by the

Prime Minister (Mr. Menzies) that was published in the Canberra Times on the 20th July stated-

Retrenchment of a minimum of 10,000 Commonwealth Public Servants as a counterinflation move has been decided upon by the Government.

In the view of the Opposition, the decision was hasty and ill-conceived.

Earlier this afternoon the Prime Minister, speaking in connexion with another matter altogether, stated the principle that should have been applied in this instance. He was asked a question by the honoralemember for Bass (Mr. Kekwick) about possible Government action in relation to Trans-Australia Airlines and other organizations, and he replied that he would support the fullest possible prior investigation of the facta before any Government action in relation to such bodies was attempted. Unfortunately, that principle was not applied by the right honorable gentleman when he made his decision to dismiss 10,000 public servants. The decision was announced suddenly out of a clear sky. Admittedly, the subject of inflation was, and still is, of tremendous importance, but the relationship to it of the Public Service had not been even hinted at in this House previously. There was no examination of departments before the decision was taken. No attempt was made to determine what Public Service functions were vital and what functions might be dispensed with or contracted. The huge number of 10,000 was simply taken out of the air. Then, as the Prime Minister subsequently admitted, an instruction was given to the Public Service Board to make the decision good and get rid of 10,000 employees somehow or other. I repeat that the action was hasty and illconceived, and I strongly suspect that it was not the action that the Prime Minister would have taken had he been left to himself. It does not seem to fit in with the views on the Public Service that he has expressed many times in the past. It seems to me as though persons other than the Prime. Minister initiated the action.

Lot us first examine the facts, aswe are so often urged to do by the Prime Minister when various subjects come before us for consideration. The

Government instructed the Public Service Board to try to get rid of 10,000 employees somehow or other. And “somehow or other “ is the method that has been used ! The honorable member for Dalley (Mr. Rosevear) mentioned an illustration of that method earlier this afternoon, when he referred to the dismissal of an officer of the Postal Department, which, I suppose, is the most efficient of all departments of the Public Service and which, probably, compares favorably with any postal organization in the world. The officer who is to be dismissed has been working overtime and is rostered for overtime work until the very moment when 3he is to be discharged. That fact demonstrates that the work upon which she is engaged still has to be performed. The truth is that the blow has fallen in a completely casual and haphazard fashion, which is almost accidental to the purpose of checking inflation.

The action of the Government in sending an instruction to the Public Service Board was quite contrary to the spirit of the Public Service Act. The Public Service Board, with the appropriate Ministers, is responsible for appointments to the Public Service. The Menzies Government, during its first twelve months of office, increased the number of public servants by not less than 7,500. 1 do not criticize it for that action. Every appointment was examined by the head of the department concerned and by the Public Service Board. I presume that in many instances there was a degree of ministerial responsibility at some stage. Does- it not follow that this order for the dismissal of 10,000 public servants is, of itself, a form of censure of the past conduct of Ministers, departmental heads or the Public Service Board ?

It is clear from the decision that was announced to the press and from the written statement that the Prime Minister issued to the Public Service associations that no regard is to be had to the necessity to continue the functions of branches of the Public Service. The figure of 10,000 was hit upon in the way that I have suggested. It was chosen because 10,000 is a nice round number. The Prime Minister stated in a letter that the number of dismissals was to be “ of the order of 10,000 “’ a s a means to cure inflation. It might be more or it might be less. When decisions are made in that slapdash way by a Cabinet that has panicked because of an increase of the basic wage by 13s. a week and that is seeking to make some kind of gesture to public opinion which has criticized it for its inaction in relation to inflation, it is certain that there will be many cases of manifest injustice. They cannot be avoided.

Absurd results have occurred. Let me inform the House of one example that has been brought to my attention by the honorable member for the Australian Capital Territory (Mr. J. R. Fraser). The Department of Works and Housing issued dismissal notices to carpenters and other tradesmen who were employed in Canberra upon house construction under the day-labour system. Some of the men were also handed notices which told them that they could secure jobs with building contractors in Canberra. Thorn contractors are building houses for the Government under cost-plus contracts. Departmental officers have visited costplus contractors and have asked them if they can employ men who are dismissed by the Department of Works and Housing. Mr. Taylor, the Director of Works in Canberra, has stated publicly that houses built by day-labour in Canberra are constructed more quickly and cheaply than are houses built under the cost-plus system, and are better houses. That is not surprising in view of the faults of the cost-plus system. The farcical aspect of the matter is that men who were building houses for the Government by direct labour will still be building houses for the Government, but will no longer be on the Government’s pay-roll directly. The effect of the dismissals upon the day-labour system in Canberra will be bad, because the efficiency of day-labour workers depends upon them working as a team. The team spirit is being destroyed. Men will work with less efficiency, and houses will take longer and cost more to build. The effect of the dismissals will be, not to combat inflation but to accentuate it. There will be no saving at all. The cut will be a mythical cut. The building force employed directly by the Government in Canberra is being reduced from 1,S95 to 3,663. That will interfere seriously with the development of this city.

The most striking examples of the operation of the Government’s decision are to be found in the Postal Department. I. believe that from 3,500 to 4,000 employees of the department are to be dismissed, including technical staff such as linemen. That will give rise to a very serious situation. In Devonport, Tasmania, there are over 300 outstanding applications for the installation of telephones, but eleven linemen employed in Devonport have been dismissed. Until action was taken by the Postal Workers Union, New Australians were being retained by the department in preference to Tasmanians. That procedure was eventually changed, but it is an example of what can happen when a government sets out to do something under an illprepared system. This Government is asking the world to look at what it has done to arrest inflation by dismissing 10,000 employees from a great public service. Eighty employees have been dismissed from the export-import section of the Department of Trade and Customs.

Mr Mulcahy:

-. - The Repatriation Department has also dismissed employees.


– That is so. I have no doubt that the Legal Service Bureau will also suffer. Members of the export-import section of the Department of Trade and Customs have been working overtime, not only at nights but also at week-ends.

What is happening in the Postal Department is typical of the procedure throughout the Public Service. What is the attitude of the Postmaster-General to this matter? During the last sessional period, he imposed an enormous “ slug “ upon the Australian people in order to increase and extend the facilities offered by his department. He said that there were then over 100,000 outstanding applications for telephones. He stated that the curtailment of facilities that would be the alternative to an increase of post and telegraph rates would necessitate the dismissal of thousands of specially trained men, and that he would not be a party for a moment to that proposition. He said -

The solution does not lie in the direction of a serious curtailment of essential services or in reducing the activities of this great public utility.

I am told that even wardsmen employed in repatriation hospitals have been dis missed. I could give many other examples of anomalies and injustices. I say that) as a matter of urgency, the Government should retrace its steps. These dismissals will not have the effect of minimizing or arresting inflation. Although the Government has said that it believes in consulting the trade unions concerned upon matters of this kind, not one of the great public service associations was consulted upon this cut. This wrong decision is being persisted with. I do not think it is a decision that the Prime Minister, if left to himself, would ever have made. I ask the . right honorable gentleman to review the position as a matter of urgency. The Public Service of the Commonwealth is a great service, and we should not be ashamed to acknowledge that fact in this Parliament. There should bo no suggestions by certain sections of the press that the Public Service is an inefficient body. It is very efficient. I pay special tribute to the Postal Department. If the Government persists with dismissals of public servants, there will be a period of inefficiency and waste. A sense of insecurity will run from the Commonwealth Public Service to the State public services. That has already happened in the case of Victoria. It will spread like a chain reaction throughout private industry.

Prime Minister · Kooyong · LP

– The Leader of the Opposition (Dr. Evatt) has had so much practice in the last month of relying on his imagination for his facts that he has apparently carried the technique forward into the speech that he has made to-day, because he ha3 suddenly discovered that the Government’s decision in relation to retrenchment in the Public Service comes out of a clear sky. And yet on to-day’s notice-paper there appears a series of questions put down by one of the Leader of the Opposition’s own followers - or at least he sits behind the Leader of the Opposition - the honorable member for Grayndler (Mr. Daly). Those questions are designed to show that the Public Service is too big. The third of the questions reads -

What effective steps have been taken by the Government . to implement the election promises “ to reduce the size of the Public Service”?

Yet the honorable member’s leader claims now that that matter came out of a clear sky. The Leader of the Opposition and the honorable member for Grayndler should confer in order to reconcile their differing views. Of course, the truth 13 that this matter does not come out of a clear sky. No government would be so foolish as to make a decision of this kind suddenly. First of all, references were made to this matter at election time, as the honorable member for Grayndler so very properly points out in his question on notice. In the second place the Government, shortly after it came into office, established a special committee, consisting of the then permanent head of the Treasury, the permanent head of the PostmasterGeneral’s Department, and a distinguished outsider, Mr. Fitzgerald, to investigate the staffing of the various departments with a view to effecting economies. Those gentlemen did a lot of work and made a series of reports from time to time, which were considered first by sub-committees of the Cabinet and then by the Cabinet as a whole. They then went to an overlapping conference between, the Commonwealth Public Service Commissioner and the Public Service Commissioners of the various States, in order to determine whether there were jobs being done in Commonwealth departments which could effectively be done by State departments. A great deal of work was done by that overlapping committee. The reports of all these discussions were laid before the Government. In the light of all these reports we discussed the whole matter afresh with the Public Service Board and told it to make an examination to see whether any percentage reduction that was to be made could be made effectively, whether it ought to be distributed among the various departments, whether it was possible to effect it by eliminating functions of some departments, or whether, if it were impossible to eliminate any departmental functions, it would require some percentage cut in some particular department. The board made an examination of the matter and made a precise series of recommendations to the Government. A sub-committee of the Cabinet then discussed these recommendations with the Chairman of the Public Service Board and went into the circum stances of every department. Each Minister concerned discussed the matter with the permanent head of his own department. The report of the sub-committee of the Cabinet went before the full Cabinet, and the final result was approved. All I can say is, that if those events show that this matter came out of a clear sky, then I do not know what careful preliminary investigation is.

Mr Curtin:

– The people have only the Prime Minister’s word about these events.


– I know they have, but most people in this country would sooner take my word than that of the somewhat voluble honorable member for Watson (Mr. Curtin). If the honorable member cares to take the responsibility of saying that the statements of events that I have made is false, let him take it. I make the statement and every member of the Cabinet can stand in his place and support my remarks seriatim.

Mr Curtin:

– What did Australia say on Saturday ?


-Order ! The Prime Minister will please resume his seat for a moment. I must insist on order, and I warn the honorable member for Watson that I shall not mention him again except to remove him. .


– I have already indicated to the Leader of the Opposition, and elsewhere, that I propose on the first sitting day next week to make a statement in. relation to the steps taken for retrenchment, indicating their purpose, the machinery that has been followed, the way in which they are being taken and the results that have been achieved. I shall then move that the paper be printed and it will then be open fully to discussion. I indicated that to the Leader of the Opposition when I suggested to him that he should not take up time to-day by moving the adjournment. I propose to make the statement on Tuesday, and as it is obviously undesirable to have two debates on one matter, I now move -

That the question be now put.

Question put. The House divided. (Mb. Speaker - Hon. Archie Cameron.)

AYES: 64

NOES: 45

Majority . . . . 19



Question so resolved in the affirmative.

Question put -

That the House do now adjourn.

The House divided. (Mb. Speaker - Hon. Archie Cameron.)

AYES: 46

NOES: 64

Majority . . . . 18



Question so resolved in the negative.

page 50



– I desire to announce to the House that, with the consent of all party leaders, arrangements have been made for certain photographs to be taken in this chamber when the House resolves itself into committee.

page 50


Messages from the Administrator reported transmitting Estimates of Revenue and Expenditure and Estimates of Expenditure for Additions, New Works and

Other Services involving Capital Expenditure for the year ending the 30th June, 1952, and recommending appropriations accordingly.

Ordered to be printed, and referred to the Committee of Supply forthwith.

page 51

BUDGET 1951-52

In Committee of Supply:

Treasurer · McPherson · CP

– I desire to place before the Parliament estimates of revenue and expenditure for the financial year 1951-52. These estimates include proposals for new expenditures and for increased rates of taxation which will be the subject of separate legislation.

Mainly because greater’ provision has to be made for defence, for payments to the States, and for increased social service payments the estimate of total Commonwealth expenditure this year of £927,000,000 shows a substantial increase over actual expenditure last year. Total revenue, after taking the new proposals into account, is estimated at £1,041,500,000, which will give an estimated surplus for the year of £114,500,000. The Government is confident that this surplus will contribute in no small measure to the control of current inflationary pressure.

The Economic Problem

The recent steep rise in prices and costs bears witness to the acuteness of the problem of inflation. During the year ended 30th June last the “ C “ series index of retail prices rose by 19 per cent, and the index of wholesale prices of basic materials and foodstuffs by 27 per cent. During substantially the same period the basic wage rose by 37 per cent. This rise in prices and costs has, of course, grave social and economic consequences for many sections of the community.

Inflation, however, has other serious effects beyond the rise in prices. In large part it is the cause of the misdirected enterprise, the shortages of critical materials, the ill-balanced distribution of labour and the waste of plant capacity that are hampering industry and construction to-day. For that reason it presents a special danger at a time when we are preparing against the possibility of war at short notice. We are engaged also upon an attempt to enlarge all our basic industries and services in keeping with the rapid growth of population that is now taking place. These objectives demand that our resources be concentrated upon the most essential enterprises and works instead of being dispersed over a host of less essential activities as they now are. It follows that the problem of inflation must be mastered if our defence effort and our developmental plans are to be carried through and our standards of living preserved.

Most countries of the western’ world are suffering from inflation, some less and some more than we are, and part of our trouble undoubtedly originates in this world movement. Higher costs of imported goods, materials and equipment work their way through into internal prices and costs. Higher export prices likewise lift the prices of exportable products used locally and, more important than this, inflate the incomes of export producers and so add to internal demand. It would be a mistake, however, to assume that all or even the main part of inflation in Australia is due to external causes. Preponderantly it is of local origin.

The .essential nature of inflation lies in a disproportion between money demand for goods and productive resources on the one hand and the supply of goods and resources on the other. This disparity began in Australia when the late war began and, though masked for a period by controls, it has been growing ever since. It works itself out at one level in competition for finished goods, house-room and services of various kinds. Behind this a struggle goes on to get resources to produce more goods, to provide public facilities and to push on with the development of the country.

During the war, civil production was cut back, goods were rationed, prices were pegged and labour was subject to direction. Meanwhile incomes rose and the supply of money increased, the latter chiefly because central bank credit had to be used when taxation and public loans proved insufficient to finance peak war expenditures. After the war, as controls were eased, there began a great thrust to expand in all directions. Protected from competition by overseas shortages and levels of costs and with a market that seemed limitless, industry set out to produce any and every kind of article that would sell. Existing factories were extended and flocks of new ventures were attempted. Public authorities joined in the effort to expand with a thousand and one projects for transport, water and power supply, postal and telephone services, housing, schools and hospitals. Many of these, of course, had been deferred through the long war period and existing facilities were far behind requirements.

In this process of expansion more and more income was derived from wages, salaries and profits, and this added to the strength of demand. Then, as exportprices rose, there was a further great inflow of spending power from overseas. With higher current earnings and much larger cash balances than before the war, people spent freely in all directions.

Despite all that was done to expand industry, however; the rise in local output was spasmodic and uneven. Some industries which could set up plant quickly and could offer attractive work and pay soon got into full production. Other industries, and in particular the heavy industries, which take longer to expand and which for various reasons cannot readily obtain labour, lagged behind, and the shortage of their products acted as a brake on output in almost every other industry.

Imported goods and materials came forward slowly in the early post-war years and it was only as industry revived in the United Kingdom and Europe, and currency troubles diminished, that the flow began to help substantially in overcoming our local problems. Even so, orders for large items of plant still take years to fulfil and now, with rearmament demands added, we are again feeling the pinch in vital supplies such as steel, tinplate, sulphur and the like.

The post-war situation I have broadly outlined has thus at all stages been an unstable one. The money demand for goods has continually risen in advance of the available supply of goods, both local and imported. As a result of the effort on the part both of industry and of public authorities to overtake demand for goods and services, and make some headway with development for the future, labour and key materials have run scarce and available supplies have been too widely spread over too many activities. The fact that increasing numbers of people and an increasing amount of materials and industrial capacity must now be diverted from ordinary production for civil needs to preparation for war intensifies these difficulties.

It may be that economic trends in the outside world will lead to some mitigation of the pressures under which we are now labouring. Wool prices have already fallen a long way from the peaks reached early in 1951, and capital inflow from abroad has fallen off. Meanwhile imports have continued to rise strongly and it seems likely that during 1951-52 we shall achieve a significant import surplus. On the other hand, we know that rearmament is proceeding rapidly in the United States of America, the United Kingdom and Western Europe. This presages both a continued strong demand for our exports generally as well as further rises in import prices. Even at current prices wool incomes would still be above the levels we have known in earlier years. Notwithstanding such adventitious developments, it is evident that we must ourselves make a determined effort if we are to weather the storm which inflationary pressures have been brewing in this country.

There are those who maintain that the solution to this problem is to freeze everything, if not immediately then by stages. On this view the Government should forbid prices and costs to rise, no matter what forces are driving them upwards. The Government rejects this idea as affording no real remedy for our present situation.

Experience has established two main facts about price control - first, that it has little value to any one unless applied to all the main commodities; second, that unless costs and, in particular, wages are also controlled, price control can do little more than record cost increases.

Even, however, if all prices and costs were frozen, the basic situation would not be rectified and inflation would not be conquered. The pressure of excessive demand would continue to bank up behind the framework of controls, as it did during the war, and there is no reason whatever to suppose that control of prices and costs would help- to increase production or encourage the flow of imports from abroad. On the contrary, through the great inconvenience that would be caused to industry and trade, it is more likely that production would be set back. We should have done no more than throw an illusion of stability over a situation growing rapidly more explosive.

In broadest terms the main remedy for inflation consists in closing the gap between the money demand for goods and the supply of goods. As things stand, however, this is not simply a matter of equating ordinary civil needs with ordinary civil supplies. The requirements of defence must be fitted in and, indeed, given priority. Resources of man-power and materials must be made available for the services, for defence industries and for defence works. To the extent that this is done they will not be available to meet ordinary civil needs and supplies will fall short if what would otherwise be available.

It is of fundamental importance that everything possible should be done to increase production in the key industries and to push on with genuinely top priority works in such basic fields as power supply and transport. Looking at the other side of the problem, however, it has to be recognized that the time has come to impose effective restraints on money demand for goods and on the indiscriminate production of less essential goods. There is no other way to limit the struggle for resources that is impeding the defence effort and the progress of basic works projects and industries.


By co-ordinated financial action a great deal can be done, both generally and in particular directions, to check the growth of consumption demand for goods and investment demand for resources. The

Government and its various agencies have already instituted some powerful measures in this field and these are being made progressively more effective. They include control of the volume of bank credit through the “ special account “ procedures, the advance policy instructions issued to the trading banks and control of capital issues. These measures supplement and reinforce one another. Their broad aim is to ensure that both long-term capital and working funds find their way to the more essential forms of enterprise and to assist in achieving balanced private investment at an appropriate level.

In a situation like the present, however, by far the most effective action a government can take is through its budget, using that term in a broad sense. In a modern economy every individual and every organization is affected to a considerable degree by what governments do in the way of raising and spending money. For this reason the financial operations of governments can, if appropriately directed, do a great deal to redress unstable conditions developing within the economy.

On the expenditure side there is the strongest possible case for eliminating every item that can possibly be dispensed with. It is of course true that large sections of governmental expenditure cannot be curtailed. . Debt charges are a good example and pensions and repatriation benefits are another. Indeed where, as in the case of pensions, people are largely or wholly dependent on government payments for their support, the Government cannot disregard the effect that rising prices are having on their position. Furthermore, where the costs of essential services rise, along with all other costs, there is no alternative but to provide for the additional expenditure involved. At the same time, there is undoubtedly great scope within the many and varied objects of public expenditure for rigorous pruning and there is still greater scope for trimming down the list of new proposals for expenditure. A time of inflation is the wrong time for starting new services to the public or for raising standards of existing services. This can better be done in times of assured peace and easy progress.

Perhaps the greatest need for revision of current ideas about what is good and timely lies in the field of public works. Since the war, as I have said earlier, we have pushed on with a multitude of projects all over the country, mainly on the ground that there was a public demand for them. It has been obvious for a long time that too many jobs had been undertaken for the labour and materials available, and the absurd stage has been reached where major public projects are bidding against each other to attract key men and supplies. In the result, a number of the really vital undertakings cannot get ahead whilst nearly everywhere jobs are under-staffed and are working from hand to mouth with materials like steel or timber or cement. A further factor is, of course, the large programme of constructional defence works which must have top priority. It is quite certain that if resources were concentrated on fewer jobs - those of a really essential kind - a greater volume of work would be completed and the economy as a whole would be better for it.

The Government believes firmly that under the present highly inflationary conditions total receipts should do more than cover total expenditure - they should be sufficient also to provide a substantial surplus. Modern thought on the relation of public finance to economic stability is quite clear on the point that in times of depressed trade and unemployment, governments may justifiably run into deficit and even finance some part of their needs with central bank credit, so raising the level of community spending power. It is a vital corollary of this view, however, that, in times of excessive demand and scarcity of labour, governments should draw away from the public in taxation and loans more than they spend for current purposes. In recent years such a policy has been applied in the United Kingdom, the United States of America and Canada. If ever there was a situation which called for such a measure, it is surely the situation we now face in Australia. During last financial year national income rose by no less than fSOO.000.000, or 35 per cent. This deluge of additional spending power threatens to overwhelm us. What the Government proposes to do is t.n draw at least a part of it off and put it for the time being where it can do least harm. I shall have more to say on this matter at a later stage.

Expenditure Estimates, 1951-52

In statements No. 4 and No. 5 issued with this speech, estimates of the main items of expenditure in 1951-52 are set out in comparison ‘with actual expenditures in 1950-51, and explanatory comments are given on the items in which there are significant increases or decreases. A summary record pf the financial transactions in 1950-51 is also given in statements No. 1 and No. 2. ] do not propose to traverse this ground in detail here, but rather to review the subject of Commonwealth expenditure in a general way. With the consent of honorable members I shall incorporate these and other statements in Hansard.

Allowing for proposed increases in certain repatriation benefits, to which I shall refer later, total expenditure from Consolidated Revenue in 1951-52 is estimated at £927,000,000. Including expenditure on war service homes, which was financed from loan fund in 1950-51 but which is to he financed from Consolidated Revenue in 1951-52, the comparable figure, for actual expenditure in 1950-51 is £808,000,000. The estimated increase in expenditure for 1951-52 over the previous year is thus £119,000,000. These figures do not include expenditure on the primary production-self-balancing items, but do include the full transfer to the National Welfare Fund

The major items on which expenditure will increase are as follows: -

In addition, expenditure from the National Welfare Fund this year, after taking account of proposals relating to pensions to which I shall refer later, is estimated at £138,000,000 as against £115,000,000 in 1950-51. The transfer from Consolidated Revenue Fund to the National Welfare Fund is estimated at £185,000,000. In accordance with the legislation governing the fund, collections of pay-roll tax are paid into the fund together with a further amount from Consolidated Revenue determined by varying a base amount of £104,000,000 according to the increase or decrease in the collections of pay-roll tax. The estimated revenue from pay-roll tax this year shows an increase of nearly 40 per cent, and the estimated transfer to the National Welfare Fund has gone up accordingly.

Expenditure by the Navy, Army and Air departments in this financial year is estimated to be £52,000,000 greater than expenditure in 1950-51. Total expenditure by the Supply and Defence Production departments, which last year wore combined, is expected to increase this year by £6,000,000. This higher level of expenditure mainly reflects the expansion of the defence effort, although some part of it is, of course, attributable to increasing costs. The amount which it is proposed to transfer to the strategic stores and equipment reserve this year, £32,500,000, is smaller than the amount transferred in 1950-51 which was £57,000,000. The purpose of this reserve is to provide for stockpiling of vital war materials and related expenditures. Through difficulties in getting materials, some of which are very much in demand abroad, the rate of expenditure so far has not been high. Up to the 30th June, the amount spent was about £9,000,000. The Government has, however, authorized a very large procurement programme and is doing everything possible to obtain materials and equipment.

Payments to the States will increase greatly this year mainly because of the proposed payment of £33,600,000 to supplement the tax reimbursement grant. It has become obvious that the grant payable to the States under the present formula will fall considerably short of meeting their indispensable needs. Their finances are, of course, feeling the impact of rising prices and costs very strongly and under these circumstances it is clear that they could not maintain their essential services without further assistance from the Commonwealth. At the same time, however, it is fair to expect the States to make e reasonable effort to raise what revenue they can from their own sources, _ to economize in administration and to minimize losses on their business undertakings.

The rise in the working expenditure of the post office, railways and broadcasting services is almost wholly a reflection of rising wages and salaries and costs of materials and equipment. It was to meet this position that postal, telegraph and telephone charges were increased earlier this year. The Commonwealth Railways have recently increased fares and freights for the same reason.

The estimate for international development and relief shows an increase of £8,400,000 over actual expenditure lastyear primarily because of Australia’s participation in the Colombo Plan. This plan is designed to promote the economic development of South and South-East Asia. Many countries within and outside the British Commonwealth are taking part and the United States of America has expressed its sympathy with the objects and its desire to help. Because of our close interest in the area, the Government has decided to contribute £31,250,000 over the six years ending June, 1P57, with an initial contribution of £8,750,000 foi the first year 1951-52.

Major items such as I have discussed, like defence expenditure, payments to the States and business undertakings, illustrate the genera] problem of Commonwealth expenditure under present conditions. We are pushing on urgently with a large-scale programme of defence, which at any time is a costly business. We are simultaneously confronted with sharplyrising prices and costs which affect almost every branch of the activities and obligations of governments in Australia to-day.

Plainly the occasion calls for the most drastic and thoroughgoing review of public expenditure to determine what is irreducible and what is not. There ought to be a .much better public understanding of this subject. On a number of occasions I have pointed out that a very large part of Commonwealth expenditure is irreducible because it is determined either by standing contracts as in the case of debt or by moral obligations to people who have served the country in war or who are in need of social aid. Nevertheless, as I have also said before, there are some areas of expenditure in which important savings can be made or in which, despite rising costs, expenditure can at least be prevented from increasing.

The Government has given special attention to three items. One is capital works and services. Like the States, the Commonwealth has a very large programme of works, some of which are of fundamental importance and each of which can in its own field be regarded as desirable. They include postal and telegraph facilities, civil aviation, the Snowy Mountains scheme, housing, and development in the territories. But also like works programmes elsewhere, these Commonwealth projects are not ail of the first order of urgency and there are a good many which can reasonably be deferred, disappointing though that may be to the sections of the community directly concerned. Accordingly, the Government has made an exhaustive review of the whole programme and it is now proposed that, including £4,100,000 to be met from Loan Fund, the total provision for capital works and services in this financial year shall be limited to £106,000,000. this figure includes £25,000,000 for war service homes and £4,100,000 for war service land settlement. The comparable figure for total expenditure last year was £102,000,000. Thus allowing for the higher level of current costs, the volume of constructional work to be carried out this year will be smaller than in 1950-51.

Subsidies are the second item which offers scope for economy. Thi3 is a muchdisputed subject. The notion that prices could be held down by paying subsidies to offset cost increases belongs to the order of ideas which sees a cure for inflation in price and cost controls. As a general policy, the Government rejects both ideas together, and it has, therefore, made a review of existing subsidies in the light of the financial position.

It decided some time ago to limit the amount of subsidy payable on dairy products this year to £16,800,000.

It has also decided to end the bounty on woollen goods. Wool prices have fallen considerably, and experience during the past year had in any case raised serious doubts as to whether the full benefits of the bounty were getting through to the purchasers of woollen articles. An amount of £2,200,000 has been included in the Estimates to cover claims for bounty which were outstanding at 30th June, 1951. About £600,000 more has been provided for tea subsidy than was spent last year and about £3,500,000 more for subsidy on coal. The estimated total expenditure of £33,000,000 on subsidies this year represents a saving of approximately £7,700,000 on expenditure last year.

The third expenditure item which has had special consideration is that of administrative costs. Because of increasesin wages, salaries and general expenses this branch of expenditure is necessarily rising. But that is all the more reason why the Government should look to the organization of departments and eliminate anything in the nature of over-staffing or waste of resources. It also requires a critical examination of the various functions carried out by departments to determine which, if any, can he terminated or reduced in scope. After extensive preliminary investigations into this problem, the Government has directed that a reduction of 10,000 be made in the staffs of Commonwealth departments and authorities, and provision in the Estimates for administrative expenditure has been adjusted appropriately.

The Government is determined to press on with all possible economies in administration, and as a further step in that direction I shall introduce shortly legislation to re-establish the Public Accounts Committee.

To one branch of expenditure, however, a special set of conditions apply. The position of pensioners and their dependants has undoubtedly been affected adversely by the rise in prices and the Government has decided to increase a number of repatriation and social service benefits.

Repatriation Benefits

It is proposed to increase the special rate war pension for totally and permanently incapacitated ex-servicemen by £1 15s. a week and the domestic allowance payable to war widows who have one or more children, or who are 50 years of age or over, by £1 2s. a week. Service pensions are to be increased by amounts up to 10s. a week for an unmarried pensioner and up to 18s. 6d. a week for a married pensioner with a dependent child; and the pensions payable to parents of deceased ex-servicemen by amounts up to 10s. a week. These increases will become payable on the first pension pay-day after the legislation is passed.

From that date also, it is proposed to increase by 7s. 6d. a week the living allowances payable to Commonwealth reconstruction training scheme trainees and to settlers under the war service land settlement scheme, and the maximum rates of re-establishment allowances for ex-servicemen engaged in farming and other occupations. The fares allowance payable to Commonwealth reconstruction training scheme trainees will also be raised from 5s. to 7s. 6d. a week.

It is estimated that the additional expenditure involved in these various proposals will be £3.200,000 in a full year and £2,150,000 in 1951-52.

Age, Invalid and Widows’ Pensions

It is proposed to increase by amounts up to 10s. a week age and invalid pensions and the pensions payable to widows who have one or more children. The pensions payable to other classes of widows and the allowances payable to dependants of invalid pensioners will also be increased. The increases will become payable on the first pension pay-day after the legislation is passed.

At the same time it is proposed to ease the means test in certain ways, the main one being to raise by £250 the property limits above which no pension is payable.

The Government will also propose amendments to the provisions of the scheme for the rehabilitation of physically handicapped persons.

Further, it is proposed to increase the allowances payable to persons suffering from tuberculosis by £1 7s. 6d. a week for a sufferer who is unmarried and by £1 15s. a week for a man and wife.

The details of these proposals are set out in statement No. 6 on National Welfare Fund Estimates 1951-52. It is estimated that they will cost £13,900,000 in a full year and £9,300,000 in the current financial year. The cost will, of course, be met from the National Welfare Fund.

Commonwealth Scholarship Scheme

The living allowances payable to holders of Commonwealth scholarships are to be increased .by amounts up to 7s. 6d. a week. The increase will take effect from the 1st January, 1952.

At the same time the means test associated with the living allowances is to be eased. Where full living allowances are not already payable the effect of the amendment will be to increase further the living allowances otherwise payable by amounts up to £15 a year or 5s. 9d. a week.

It is estimated that the additional cost will be £85,000 in a full year and £43,000 in 1951-52.

Wool Funds

There has been some speculation on the Government’s intentions in regard to payment to wool-growers of certain moneys held on their behalf, and the effects that such disbursements might have. I can assure honorable members that the budget has not been framed without regard to such an obviously important matter, and fears that the budget will be undone by the need to distribute some or all of these moneys are groundless. It has already been announced that the £45,000,000 collected as part of the initial capital for a possible wool stabilization scheme will be repaid as soon as practicable, and I hope that the recipients will find it to their advantage to reinvest a major part of this large sum in Commonwealth loans. As to the larger sum which will ultimately accrue from the Joint Organization’s wool disposals operations, I can only say at this juncture that the interests of wool-growing taxpayers and of the community at large combine to suggest that it would be reasonable to spread the disbursement, at least of the larger amounts, over a reasonable period of time. The exact method by which this might be achieved is currently receiving the Government’s attention.

Revenue Estimates 1951-1952

In statement No. 3 issued with this speech, estimates of revenue for this financial year are compared with actual revenue for 1950-51 and explanatory comments are given.

Before taking account of proposals for additional taxation, total revenue for 1951-52 is estimated at £381,500,000, of which £798,300,000 is revenue from taxation, £67,700,000 is revenue from business undertakings and £15,500,000 is revenue from other sources. Total revenue from all sources in 1950-51 was £783,600,000. These figures exclude the primary productionselfbalancing items.

Expected revenue from income tax this year naturally reflects the extraordinary lift in incomes, and especially in wool incomes, which occurred during 1950-51, as well as the higher level of earnings from which instalment deductions will be made during 1951-52. At the same time, there has to be offset against income tax assessed this year on 1950-51 wool incomes an amount estimated at £98,000,000 on account of wool deductions made during 1950-51. Allowing for this factor, revenue from income tax and social services contribution on individuals and companies at existing rates is estimated at £462,000,000 in 1951-52. This is about £120,000,000 greater than revenue in 1950-51.

Estimates of customs revenue allow for a further increase in the volume and value of imports compared with 1950-51. Similarly, the excise estimates provide for an expected increase in sales of beer, spirits and tobacco.

A very great increase in revenue from sales tax, amounting to £24,800,000, is expected, because of the rise in prices and a likely increase in the volume of sales of both local and imported goods subject to tax.

Because of increased wages and salaries and higher employment the estimate of pay-roll tax also shows a large increase of £11,300,000 over revenue in 1950-51.

Revenue from the Post Office and the Commonwealth Railways this year will, of course, reflect the increases in rates and charges which have already been made.

At £881,500,000 total revenue would not suffice to cover total expenditure estimated at £927,000,000, much less provide for the other needs to which I shall refer later. The Government has, therefore, decided to bring down proposals for increased taxation estimated to produce £160,000,000 in 1951-52. Bringing these proposals into account, total revenue for 1951-52 is estimated at £1,041,500,000, which, after meeting the estimated expenditure of £927,000,000, will provide a budget surplus of £114,500,000.

Taxation Proposals

In framing its taxation proposals the Government has been concerned to ensure that they will operate as fairly as possible between the various classes of people who will pay the additional taxes, that they will have a maximum effect in curtailing the excessive demand for goods and that they will do the least possible harm to incentives to work and save. It has followed the principle that by distributing the burden of additional taxation as widely as possible it will fall with the least possible weight on particular classes of taxpayers. It has also sought to weight its various proposals so that they will fall more heavily on spendings than on earnings. I shall now give a brief explanation of each of the proposals.

Income Tax - Individuals

Individual taxpayers will be called upon to pay a special levy equal to 10 per centum of assessed tax. This levy will be imposed in the assessments of income tax and social services contribution calculated at present rates on income of the current year 1951-52. Instalment deductions made at the source from salaries and wages will be increased on and from the 1st November, 1951, by 10 per cent.

Correspondingly, provisional tax and contribution on taxable incomes, other than salaries or wages, will be increased. The increased provisional tax will be shown in assessments based on income derived during the year ended the 30th June, 1951. These assessments will be issued following approval by Parliament of the proposed increase.

The increase in the instalment deductions from the earnings of employees will operate for only eight months of the current year. Moreover, it will not be possible to collect the full provisional tax and contribution as many taxpayers fail to lodge their returns in sufficient time to enable assessments to be made and paid before the close of the year.

Hence, although the proposed change would, on the basis of current incomes, yield £38,000,000 in a full assessment year, it is estimated that extra collections in this financial year will not exceed £25,000,000. I might point out here that the concessions and adjustments made in the budget last year are estimated to have a value to taxpayers of £20,000,000 in the current year.

Comparative tables are being circulated showing the tax and contribution payable on selected incomes (a) at war-time rates, (b) at current rates, and (c) at the increased rates now proposed. These tables will show that, despite the proposed increase, the new rates will be comparatively light by comparison with war-time rates.

I desire also to. stress that, even with the increase now proposed, income taxes in Australia will still be much lower in every grade of income than income taxes in the United Kingdom and in New Zealand. Tables comparing the income taxes in the three countries are also being circulated to honorable members.

Averaging of Incomes

A review of the effects of the averaging system has disclosed a pressing need for some modification of that system. The averaging of taxable incomes for income tax rating purposes applies only in the assessments of primary producers who, broadly, pay tax on taxable incomes each year at the rate appropriate to the average of taxable incomes of the current year and the preceding four years.

The averaging system is intended t’ protect the taxpayers concerned against disadvantages arising from fluctuations of prices for their products and from variations of income due to seasonal conditions. The system is meant to ensure that primary producers pay approximately the same amount of tax as other taxpayers receiving the same total income during the same period in reasonably even amounts.

It has always been recognized that thi system has faults. For example, it operates to the advantage of the taxpayer in a year of high income when he is best abb to pay and to his disadvantage in a year of low income when he is least able to pay.

Despite these disadvantages, however, the system worked reasonably well until about three years ago, when income began to increase steeply year by year. As a result of that rise in incomes thi position has now been reached in which, if the system were to continue without modification in respect of incomes of thi year ended the 30th June, 1951, taxpayers subject to averaging would have an advantage estimated at £62,000,000 in assessments on incomes of the year 1950-51 hy comparison with what they would have had to pay if averaging did not apply. About £50,000,000 of this total amount would accrue to taxpayers who had taxable incomes in excess of £4,000 in that year.

On the other hand, for averaging to achieve its expected purpose in some future period when incomes are declining, the taxpayers concerned would have to be required to restore to revenue amounts equivalent to the tax advantages they have received over the past three oi four years. If incomes were to fall fat enough to make this a possibility, it is fairly obvious that the task would exceed the financial capacity of most of the people concerned. It seems preferable, therefore, that the system should be modified and prevailing conditions make this an opportune time to do so.

The modification proposed is to confine the averaging system to that part of the taxable income which do°s not- exceed £t.0Of>. Where the taxable income is £4,000 or less and the average income less than £.000, the present system will apply without change;

Concurrently with the introduction of the amendment it is proposed to give taxpayers now subject to averaging the option of electing to withdraw permanently from the averaging system and to be taxed on the same basis as other taxpayers.

The annual gain or loss to revenue from these proposals will vary from year to year. The gain to revenue in the present financial year is estimated to be £47,000,000.

Wool Sales Deduction

It is not proposed to continue the wool sales deduction in the current year. In the Government’s policy speech, it was announced that the prepayment would be discontinued as soon as provisional tax reasonably provided for the tax obligations of wool-growers.

While uncertainties as to the trend of wool prices make it difficult to estimate the exact position, it is undoubtedly true that the margin between the provisional tax- and the actual amount assessed will be substantially less this year than it was in 1930-51.

In conformity with its promise, therefore, the Government will repeal the wool sales deduction legislation and deductions made in respect of wool sold or exported since the 30th June, 1951, will be refunded by the Government. Deductions made in respect of wool sold or exported prior to that date are of course to be offset against tax liabilities of woolgrowers in the current year.

Company Taxation

Increases are proposed in the taxation of company profits. At present companies pay a primary tax at the rate of 5s. in the £1 on the first £5,000 of taxable income and 6s. in the £1 on the balance of taxable income. In addition, public companies pay super-tax at the rate of ls. in the £1 on the excess of taxable income over £5,000 and a further tax at the rate of 2s. in the £1 on that part of the income which is not distributed as dividends to shareholders.

It is proposed to impose a primary rate of 7s. in the £1 on the taxable incomes of public companies and to abolish the supertax and the undistributed income tax. Both super-tax and undistributed income tax were war-time measures. Super-tax, which was complementary to war-time (company) tax, has been continued although war-time (company) tax ceased as from June, 1946.

The amalgamation of the three taxesgives effect, in principle, to a recommendation made by the Commonwealth Committee on Taxation. The interests of simplification are served by the amalgamation, and the abolition of the undistributed income tax acknowledges the principle advocated by the committee that a public company should be taxed on the profits it earns and not on the profits it retains.

Excess Profits Tax

In my last budget speech I stated that, as part of a balanced plan to bring inflationary forces under control, measures to draw off some part of abnormal profits were being considered.

This statement has been interpreted in some quarters to mean that the Government proposed an excess profits tax on all forms of business profits. Clearly, however, an excess profits tax is unnecessary in the case of individuals because the graduated rates can be adjusted to draw off the desired amount in taxation. Similarly, an excess profits tax on private companies is not necessary because the individual graduated rates apply both to dividends distributed and to profits retained by those companies. Hence, to give effect to the announced intention of the Government it is necessary to find a means of dealing with the profits of public companies.

The methods that might be adopted to implement the Government’s intentions in regard to public companies were referred to the Commonwealth Committee on Taxation. After thoroughly examining many different plans, the committee found it impracticable to recommend a scheme in any of the recognized forms that would serve the desired purpose and, at the same time, be reasonably free from anomalies for taxpayers and difficulties of administration. In particular, the more usual forms of tax would be ineffective for a period of up to two years after the profits had been derived.

In the light of the committee’s reports, the Government proposes that the additional contribution to revenue by public companies shall be in the form of a special levy at the rate of 2s. in the £1.

The proposed new primary rate of 7s. in the £1 and the special levy of 2s. in the £1 will commence to apply to taxable incomes derived by public companies during the year ended 30th June, 1951.

By imposing these rates and abolishing the super-tax and undistributed income tax the net yield in a full assessment year will be £13,000,000 and in this financial year £10,900,000.

Private Companies

It is proposed to retain the present primary rate of 5s. on the first £5,000 of taxable income of private companies but to increase the rate from 6s. to 7s. on the balance of taxable incomes of such companies. The 5s. rate up to £5,000 is being retained because an increase would weigh with undue severity on small private companies. The rate over £5,000 is being increased by ls. in consonance with the proposed increase in rates of taxation on individuals. This should have the effect of bringing the tax on private companies and their shareholders approximately in line with the tax on partners in comparable partnerships.

The special levy of 2s. in the £1 will not be imposed on private companies. This is because the graduated rates and the special levy on shareholders’ dividends, or on profits retained by private companies but deemed to be distributed, will keep the level of taxation on these profits in proper relation to the taxation of other incomes.

These adjustments of the rates are estimated to yield £7,300,000 in a full assessment year and £5,900,000 in this financial year.

Certain measures are also proposed to defeat evasions of tax by some private companies. These measures will be explained when the assessment bill is introduced later in these sittings.

Advance Payment - Companies

It is further proposed that every company, public or private, shall pay in this financial year an advance payment to be credited against its future tax liabilities.

Since the tax payable by companies is not assessed until some months after the close of the year of income, there is, in the opinion of the Government, a clear case for some advance payment by companies of part of the tax to which the earned profits are liable.

Since the system of pay-as-you-earn for wage and salary earners and collection of provisional taxation from individuals was introduced, companies have been at some advantage as regards payment. That advantage is found in companies being able to use, for long periods, the money represented by the tax due by them. In the current financial year the aggregate sum will exceed £100,000,000.

There is also some inherent danger to revenue in the delayed system of company taxation. In some cases money held by large companies runs into six figures, and should misfortune overtake the company there may be total or substantial loss to revenue, notwithstanding the priority of the Crown in liquidation, which applies only as against unsecured creditors.

The advance payment proposed in the case of public companies is an amount equal to 10 per cent, of the primary tax of 7s. in the £1 and the special levy of 2s. in the £1.’

Private companies will be liable also for an advance payment of an amount equal to 10 per cent, of the tax at the primary rates of 5s. in the £1 on the first £5,000 of taxable ‘income and 7s. in the £1 on the balance of taxable income.

The advance payment of company taxes is estimated to yield £14,100,000 in a full assessment year and £11,200,000 in this financial year.

Initial Depreciation Allowances

As already announced, the Government proposes to discontinue the special depreciation allowance on plant on and from the 1st July, 1951. First granted in 194& to encourage the replacement of plant worn out during the war years, the original arrangement permitted a deduction of 20 per cent, in the first year in addition to the ordinary depreciation allowed and the concession was to run for five years. In 1949 the concession was extended until June, 1952, and the maximum rate of deduction was increased to 40 per cent. Taxpayers could choose either the 20 per cent. or the 40 per cent. rate. Most did in fact choose the 40 per cent. rate.

Since then, however, the economic situation has changed greatly and the concession has become a stimulus to excessive private investment in many directions. A similar situation has developed in the United Kingdom where the Chancellor of the Exchequer has given notice that the initial depreciation allowance must be suspended. Moreover, since the ending of the concession will merely restore the system operating before 1946 under which the full cost of plant is written off in annual deductions at normal depreciation rates, the curtailment of the period of the concession will in no way reduce the full deduction for depreciation to which taxpayers are entitled.

Mutual Life Assurance Companies

Since the introduction of uniform income tax in 1942, mutual life assurance companies have paid tax at primary rates1s. lower than other public companies. The lower rates, in conjunction with a special basis of assessment, were designed to cause mutual life assurance companies to pay approximately the same amount of income tax as they previously paid to the Commonwealth and the States.

It is proposed that the1s. margin in the primary rates should be preserved, i.e., that the primary rate should be 6s. in lieu of 7s. in the £1 for other companies. Mutual life assurance companies will not be required to pay the special levy of 2s. in the £1. The companies will be required, however, to make an advance payment as in the case of other companies.

Non-profit and Co-operative Companies.

It is proposed that the special levy shall not be payable by companies which are not carried on for the profit of their individual members and which are prohibited from distributing profits to members. Cooperative companies will also be exempted.

Special Concessions for Aged Persons

The Government has decided to relieve aged persons in the lower income groups from income tax and social services contribution.

This concession will apply to women of 60 years and over and to men of 65 years and over. In. the case of a single person, no tax and contribution will be payable if his income does not exceed £234. In the case of a married couple, there will be no liability to tax and contribution if their total income does not exceed £468. The limits of these exemptions coincide with the limits of maximum permissible incomes for the increased Commonwealth age pensions already mentioned.


Income in the form of scholarships held by students who are receiving full-time education at a university college or school will be exempted from taxation as from the 1st July, 1951.

Cost of Keep of Employees

It is proposed that the standard deduction for the cost of keep of employees should be increased by 5s. a week. This follows a recommendation of the Commonwealth Committee on Taxation. From the 1st July, 1951, the standard deduction will be raised to £1 a week for the keep of each employee. This deduction is allowed where the employer is unable to state the actual cost of the employee’s keep.

Where the award under which the employee is working does not specify the value of the keep provided by the employer, the taxable value of keep to the employee will also be raised by 5s. a week.

Gifts to Community Hospitals

Gifts to hospitals which are not carried on for the profit or gain of individuals will be allowed as a deduction for income tax purposes. This concession has been recommended by the Commonwealth Committee on Taxation so as to remove the existing anomaly that, whereas gifts to public hospitals are allowed as deductions, gifts to community hospitals are not so allowed. The concession will apply to gifts made on and after the 1st July, 1951.

Members of the Defence Forces. lt is proposed to exempt, as from the 1st July, 1950, the service pay and allowances of members of the Navy, Army and Air Forces serving in operational areas in and around Korea and Malaya.

Generally, the conditions as to categories of personnel and the periods of eligibility for the exemption will be uniform with those prescribed in regard to the provision of war pension and repatriation and re-establishment benefits.

Sales Tax

It is proposed to increase rates of sales tax so as to secure additional revenue amounting to approximately £35,000,000 during the current financial year, or £52,000,000 in a full year. The present general rate of per cent., which applies to the main bulk of the taxable goods, will be raised to 121/2 per cent.

In addition, sales tax on other goods, which will be specified in separate schedules, will be raised to rates ranging from 20 per cent. to 662/3 per cent. In addition to the goods which have hitherto been subject to special rates of tax, sporting equipment, toys, games, confectionery and ice cream, as well as toilet requisites used by men in the form of shaving cream, shaving soap, safety razors and safety razor blades, will now be subject to higher rates of tax.

Details of the goods affected and the relevant rates of tax will be given when the legislation is introduced later to-day.

Consideration has also been given to a number of requests which have been made from time to time for relief from sales tax on particular goods, and it is proposed to make certain additional exemptions from the tax. These concessions are merely logical extensions of exemptions already in force and are designed to remove anomalies. They will involve an annual loss of revenue estimated at £24,000, or approximately £16,000 in the current financial year. Details of the goods affected will be given later when the bills are introduced.

Land Tan;

The land tax assessments for the financial year 1951-52, based on land owned at the 30th June, 1951, will be based upon the actual unimproved values as at that date in contrast to the pegged values which have been the basis of land tax assessments since the financial year 1941-42.

The unimproved values of all types of land have increased very substantially over the values at which they were pegged. The effect of the increase in unimproved values will be to bring into the taxable field for the first time the land of a large number of landowners. The increase in rbvenue from this source in the current financial year is estimated at £4,000,000.

A small amendment of the Land Tas Assessment Act 1910-1950 will be made in the interests of simplicity of administration. Section 39 of the act renders liable to tax a shareholder’s deemed interest in the unimproved value of land owned by the company in which the shares are held.In order to obviate a great amount of work for a small amount of revenue, the section directs that individual share interests of not more than £100 and aggregate share interests of less than £500 are to be ignored in the assessments of the shareholders. In view of the increase in values generally that has taken place since this provision was put in the act in 1927, it is proposed to bring down amending legislation to extend the exemption from tax to individual share interests of not more than £200 and aggregate share interests of not more than £1,000. The cost to revenue will be less than £10,000.

Customs and Excise

Increases proposed in customs and excise are estimated to produce £32,000,000 additional revenue in a full year and £24,000,000 in 1951-52. Details will be given later by my colleague the Minister representing the Minister for Trade and Customs.

Broadcast ListenersFees.

Increases are proposed in broadcast listeners’ licence-fees in order to meet the higher cost of maintaining the broadcasting services and facilities provided by the Government. Until a few years ago revenue from listeners’ fees was sufficient to cover the cost of these services. With the development of the services and the great increase in costs of equipment and materials as well as wages and salaries, revenue from licences is falling short of expenditure by some £2,000,000 per year. The Government, therefore, has no alternative but to raise the charge to listeners. It is proposed that the licence-fee be increased to £2 in Zone 1 and £1 8s. in Zone 2. No increase will be made, however, in the fee of 10s. at present paid for licences by pensioners. Moreover, it is proposed that listeners holding more than one receiving set will no longer be required to obtain more than one licence. It is intended that the proposals shall come into effect as from the time when legislation is passed by Parliament. The additional revenue is estimated at £1,700,000 in a full year and £1,000,000 in this financial year.

Budget Summary

Bringing into account the revenue and expenditure proposals I have outlined, the budget for 1951-52 may therefore be summarized as follows : -

Loan Programmes

The total programmes submitted to the Loan Council at its meeting in August this year, including advances under the Commonwealth-State housing agreements, would have involved borrowing an aggregate amount of just over £300,000,000. The actual borrowing programme in 1950-51 was £165,000,000.

In view of trends in the loan market, it was clear that nothing like the full amount of £300,000,000 could be borrowed this year on reasonable terms and conditions. It was also apparent that, whilst all the works included in the State programmes were of a useful character, they varied so considerably in relative urgency that some could be deferred for the time being without harmful consequences. On the other hand, to provide finance for the full proposals would necessarily have involved the use of central bank credit. In current circumstances, resort to such methods of finance would on all counts be thoroughly unsound and the Government has irrevocably set its face against it.

After full discussion it was decided by the Loan Council to limit the total borrowing programmes for the year to £225,000,000. This represented a 25 per cent, reduction in the programmes originally put forward but an increase of 36 per cent, on the actual borrowing programmes of last year. The Commonwealth agreed to accept responsibility for ensuring that the States gained access to loan funds for their works programmes during 1951-52 up to the amount of the approved programme of £225,000,000.

It is impossible at this stage to forecast what amount will be raised by public loans during the financial year, but it would seem that even the reduced programme of £225,000,000 is substantially in excess of the capacity of the loan market. To the extent that loan raisings fall short of the approved programme the Commonwealth will need to finance the balance from its own resources.

Apart from the requirements of new loan money for works programmes, money is also needed for redemptions of maturing securities. It is estimated that £7,000,000 will be required in 1951-52 for the redemption of war savings certificates and savings certificates. The requirements for redemptions which may arise out of the maturing of £72,000,000 of Commonwealth and State debt in November, 1951, and April, 1952, cannot as yet be estimated.

The Financial Problem

It is now possible to summarize the main elements of the financial problem which confronts the Government.

First, even after the rigorous scrutiny of the expenditure estimates to which I have referred, taxation at existing rates would leave a budget gap of nearly £50,000,000.

Second, there is an indisputable need to ensure that the financial operations of the Commonwealth for the year result in a substantial excess of cash receipts. This we believe to be one of the most effective counter-inflationary measures available to the Government.

Third, we have a contingent Commonwealth responsibility to assist the States by filling from Commonwealth resources whatever gap may be found between the approved Loan Council programmes and actual loan raisings. Many of the State works projects for power, transport and so forth are of the highest priority both on defence and developmental grounds, and if the Commonwealth was not prepared to assist in this way the only alternatives would he a drastic interruption of really urgent works or an extensive use of central bank credit. In current circumstances neither alternative can be contemplated.

It was only after the closest study of all these factors that the Government decided to bring down its proposals for increased taxation. After bringing them into account, total revenue for 1951-52 is estimated at £1,041,500,000 which, after meeting the estimated expenditure from Consolidated Revenue of £927,000,000, will provide a budget surplus of £114,500,000.

It is proposed that this surplus be paid into the National Debt Sinking Fund, which will be empowered to invest some part thereof in loans raised for Commonwealth or State purposes. To the extent that these special moneys are not required for direct or indirect assistance to the Loan Council borrowing programmes, they will be available to the commission for re-purchases and redemptions of debt, including debt owing to the central bank. Separate legislation to authorize the appropriation of the surplus to the National Debt Sinking Fund will be put before Parliament.


I think it is safe to assert that no member of this House will deny the seriousness of our present economic situation, or the pressing need to halt the inflationary spiral. The whirlwind of rising prices may be exhilarating for the few who can ride it out, but for many inflation can become a whirlpool which ever more rapidly engulfs their savings and ultimately their jobs. This disaster we are determined to avert. The hard facts of

Our current state are inescapable, and I should have been recreant to my trust had I failed to set them clearly before you. t have been equally frank in setting before you some of the measures the Government proposes to take to counter the inflationary menace. We make no apology for giving you a budget which will entail sacrifice. A government which regards itself as the trustees of the people must be prepared, when the need arises, to tell the people honestly and even bluntly what is required of them. International tension and domestic economic disturbance have now combined to produce that need. While the measures I have announced are clearly not pleasant they are clearly necessary, and in the end they will prove far less hurtful than the results of unchecked inflation. As a government, we have sufficient confidence in our fellow Australians to believe that they prefer to face their problems and that they have both the courage and the energy which are needed to bring us safely through our present dangers.

Statement No. 1. - Consolidated Revenue Fund Results, 1950-51 - *continued* {: .page-start } page 67 {:#debate-29} ### NOTES ON REVENUE AND EXPENDITURE 1950-51 In the 1950-51 Budget, revenue (excluding self- balancing items) was estimated at £738,658,000. Expenditure from Consolidated Revenue was estimated at £738,268,000 thus leaving an estimated surplus of revenue over expenditure of £390,000. Actual revenue for the year proved to be £783,595,000, which was £44,937,000 in excess of the Budget estimates. The revenue for the year would have exceeded total expenditure from Consolidated Revenue by £7,048,000 but for the fact that this amount was transferred to the Defence Services Strategic Stores and Equipment Reserve at the end of the financial year. The Consolidated Revenue Fund was therefore balanced in 1950-51. {:#subdebate-29-0} #### Revenue Collections of Income Tax and Social Services Contribution exceeded the estimates by £29,958,000. One of the main factors accounting for these higher collections was the increase in the basic wage in December, 1950, granted by the Commonwealth Court of Conciliation and Arbitration. In the case of the Wool Deduction, the rise in wool prices during the year was greater than anticipated and resulted in actual collections exceeding the estimate by £6,531,000. Other increases over estimates included Excise (£3,083,000) Pay-roll Tax (£2,721,000) and Miscellaneous Revenue (£3,584,000). {:#subdebate-29-1} #### Expenditure Total expenditure from Consolidated Revenue in 1950-51, amounted to £783,595,000 or £45,327,000 in excess of the estimates. Expenditure on Defence Services exceeded the estimate by £14,684,000. Included in this figure is the additional amount of £7,048,000 transferred at the end of the financial year to the Strategic Stores and Equipment Reserve. The remainder of the increase in Defence expenditure arose largely from purchases of aircraft and increased pay and allowances for the Services. Many items of expenditure were considerably affected during the year by rising wages, salaries and costs of materials. Departmental expenditure, for example, exceeded the estimate by £3,619,000 whilst Post Office expenditure on Ordinary Services was £4,986,000 above the estimate. The increase of £4,233,000 over the estimate for Capital Works and Services was due largely to increased outlay on Post Office Capital Works and Services, expenditure on which rose by £8,647,000. In the aggregate, expenditure on other Capital Works and Services did not reach the estimate. The payments to the National Welfare Fund were £5,680,000 more than estimated because of increased collections of Social Services Contribution and Pay-roll Tax. Expenditure on Subsidies and Bounties was £4,071,000 less than estimated. Expenditure under the Wool Products Bounty was approximately £5,000,000 short of the estimate because of a decline in purchases of raw wool by Australian manufacturers. The subsidies on coal and prefabricated houses were also less than expected. These decreases as compared with the estimates were, however, partly offset by an increase of £3,700,000 in the butter subsidy which was caused by higher consumption and an increase in the guaranteed return to producers as a result of the basic wage rise in December, 1950. Payments to the States were £16,827,000 more than estimated. During 1950-51 various exceptional factors (such as the December increase of approximately £1 in the basic wage) added to the financial needs of all States. To meet this situation, a Special Financial Assistance Grant of £15,000,000 was made to the States towards the end of the financial year. The other major variation from the estimates related to the Commonwealth Aid Roods payments which exceeded the estimate by £2,143,000. As the foregoing table shows, three loans were raised in Australia during the year 1950-51. Three and one-eighth per cent, securities for 11-14 years, and 2 per cent, securities for three years, were offered for each loan. For two of the loans, securities were issued at par ; for the other loan, the long-term portion was issued at a discount of 1 per cent. The total amount subscribed to these loans was £281,513,350 of which £151,907,450 was new cash, and £129,605,900 conversions of maturing securities. After providing £24,327,840 from cash subscriptions to redeem unconverted securities, £127,119,616 was available for Commonwealth and State purposes. Redemptions of War Savings Certificates and Savings Certificates during the year amounted to £8,258,149 (face value). {:#subdebate-29-2} #### London Loans No loans were raised in London during the financial year, but a New South Wales loan of £11,707,278 sterling, which matured on 1st July, 1950, was paid off on maturity. Funds for the repayment were provided as follows : - In exchange for the funds provided in London by the Commonwealth Bank, the Bank received in Australia 34 per cent., 1964 securities representing an equivalent amount in Australian currency. {:#subdebate-29-3} #### Public Debt The Public Debt of Australia at 30th June, 1951, iscompared below with the Public Debt at 30th June, 1950. {:#subdebate-29-4} #### National Debt Sinking Fund During 1950-51, the receipts of the National Debt Sinking Fund for redemption purposes were £41,858,000. In addition, a balance of £13,969,000 was carried forward from the previous year, making a total of £55,827,000 available for debt redemption in 1950-51. Of this amount, £45,545,000 was expended in repurchases and redemptions in 1950-51 and the unused balance of £10,282,000 is being carried forward to the financial year 1951-52. During the year 1950-51, the Commonwealth Parliament passed the Loan (International Bank for Reconstruction and Development) Act authorizing the Commonwealth to borrow$100,000,000 from the International Bank. This Act requires certain moneys to be paid into the National Debt Sinking Fund and gives the National Debt Commission authority to apply the National Debt Sinking Fund to repayment of the loan. Repayment is to be effected over a period of 20 years commencing in 1955. Excluding receipts from this source, it is estimated that the amount available in 1951-52 for debt redemption purposes will be £44,064,000. Notes on Revenue Estimates. *Customs* (Item 1). - On existing rates of duty, Customs revenue is estimated at £102,000,000 in 1951-52 compared with actual revenue of £91,920,000 in 1950-51. A greater volume of imports and a generally higher level of import prices is expected in 1951-52. The main items on which increased revenue is expected are petrol and oils, metals and machinery, tobacco and motor vehicles. *Excise* (Item 2). - On existingrates of duty, Excise collections in 1951-52 are estimated at £78,000,000 compared with £73,083,000 in 1950-51. Some increase is expected in sales of beer, tobacco and cigarettes. *Sales Tax* (Item 3). - Sales Tax revenue before allowing for the proposals, is estimated at £82,000,000 in 1951-52, compared with actual revenue of £57,173,000 in 1950-51. The estimate envisages some increase both in the volume and in the average level of prices of goods subject to Sales Tax. *Income Tax - Individuals - and Social Services Contribution* (Items 4 and 6). - Before allowing for the effect of the Budget proposals, revenue from Income Tax and Social Services Contribution (excluding companies) is expected to increase from £251,422,000 in 1950-51 to £355,000,000 in 1951-52. The latter figure is reached after allowing for credits estimated at about £83,000,000 for Wool Deductions made in 1950-51. The substantial rise in estimated collections reflects the high level of wool and business incomes in 1950-51 and also allows for a higher level of wages and salary incomes in 1951-52. *Income Tax - Companies* (Item 5). - At existing rates, collections from Income Tax on Companies are estimated to increase from £90,536,000 received in 1950-51 to £107,000,000 in 1951-52. This figure provides for credits of £15,000,000 to be allowed to pastoral companies in respect of Wool Deductions made in 1950-51. As with other income tax estimates, the increase reflects the rising level of incomes. *Wool Deduction* (Item 7). - As Wool Deduction will not be imposed in 1951-52, revenue from this source in 1951-52 comprises only the carryover payments from the 1950-51 season. These are estimated at £11,500,000. *Pay-roll Tax* (Item 8).- Receipts in 1951-52 are estimated at £40,000,000 compared with £28,721,000 in 1950-51. The higher level of collections will, it is estimated, result from the full year operation of the basic wage increase, and other basic wage adjustments, award increases, and a greater number of wage and salary earners in employment. *Land Tax* (Item 9). - It is considered that revenue in 1951-52 will increase mainly because of the adoption of higher valuations for Land Tax purposes following the cessation of the pegging of values. *Other Taxes* (Items 10-13). - Minor increases in collections are expected in respect of the remaining taxes. The estimated increase of £2,100,000 in Estate Duty collections takes account of the higher average values of estates. *Miscellaneous Revenue* (Item 14). - Miscellaneous revenue is estimated at £14,160,000 or £924,000 less than the amount actually received in 1950-51. Items showing the main variations are as follows : - *Railways* (Item 15). - Revenue in 1951-52 is expected to exceed the receipts in 1950-51 by £806,000. This increase is due mainly to the higher freights and fares which came into operation on 1st March, 195], and 1st September, 1951. *Post Office* (Item 16).- Estimated revenue of £62,500,000 in 1951-52 is £17,723,000 higher than collections in 1950-51. The estimate reflects the increase in postal charges as from 9th July, 1951, and also provides for the full year effect of the previous increase in postal charges which operated from 1st December, 1950. It is expected that the commercial accounts of the Post Office will show a small profit in 1951-52. *Broadcasting* (Item 17). - Estimated revenue in 1951-52 (before allowing for the proposals) is slightly above the level of last year. *Territories* (Item 18). - The higher revenue expected in 1951-52 is due to the provision of new and expanded services in the Northern Territory and in the Australian Capital Territory. Further details of the estimates of expenditure in 1951-52 are given in the notes on each item set out below. An increase of £51,800,000 is expected in the expenditure of the three Service Departments (Navy, Army and Air) whilst expenditure by the Departments of Supply and Defence Production is expected to show a net increase of £6,178,000 as compared with actual expenditure in 1950-51. The increase of £51,800,000 expected in the expenditure of the three Service Departments reflects the expansion which is taking place in the Defence Forces and the steps which are being taken to provide tho Forces with adequate supplies of modern equipment. *Navy.* - Expenditure for 1951-52 is estimated at £34,444,000 compared with actual expenditure of £24,617,000 in 1950-51. Main items showing increases are pay and allowances, naval and air stores, coal and oil fuel, naval construction and buildings and works. The naval shipbuilding programme is being expanded and an amount of £2,500,000 is being provided for this purpose in 1951-52. Naval aviation is being developed with two Carrier Air Groups now in operation. Provision has been made for expenditure associated with the participation of H.M.A.S. *Sydney* in Korean operations. *Army.-* Expenditure for 1951-52 is estimated at £47,411,000 which is £21,179,000 higher than expenditure in the previous year. Increases are mainly in respect of pay and allowances, arms and equipment, maintenance of forces in Japan and Korea and new buildings and works. *Air.* - Estimated expenditure of £48,446,000 in 1951-52 compares with actual expenditure of £27,652,000 in 1950-51. Increases are principally in pay and allowances, maintenance and operational costs of B.A.A.F. squadrons overseas, purchase and construction of aircraft, the supply of equipment and stores, and new works and buildings. Expenditure on B.A.A.F. squadrons overseas is estimated to increase from £1,209,000 in 1950-51 to £3,925,000 in 1951-52. This includes provision for the purchase of Meteor Jet Fighters for No. 77 Squadron. Expenditure on aircraft and spare engines is estimated to increase to £15,500,000 compared with £8,939,000 spent in 1950-51. The estimate includes provision for the production in Australia of Sabre and Vampire fighters and Canberra bombers. Provision is also made for the purchase overseas of Canberra bombers and Neptune general reconnaissance aircraft and for a final settlement with the United Kingdom for certain deliveries of Meteor jet fighters. The estimate provides also for extensions to R.A.A.F. airfields and runways to accommodate jet aircraft. *Departments of Supply and Defence Production.* - In 1950-51 the estimates of the Department of Supply covered Defence Production as well as Supply activities. These activities have now been separated. Expenditure on Supply in 1950-51 was £12,113,000. The Estimates for 1951-52 provide £10,566,000 for Supply and £7,725,000 for Defence Production. Under Department of Defence Production the main provisions relate to the purchase of machinery and plant for Government factories and annexes, the maintenance of plant and certain other expenditure associated with factories and establishments. Provision is made also for the setting up of a Trust Account for the purchase of materials for munitions production requirements. 'A sum of £1,000,000 has been included for this purpose. *Transfer to Strategic Stores and Equipment Reserve.* - Provision is made for the transfer from Consolidated Revenue to the Strategic Stores and Equipment Reserve of £32,500,000 in 1951-52 compared with an amount of £57,048,000 transferred in- 1950-51. At 30th June, 1951, the balance in the Reserve was £48,010,000. *Interest and Sinking Fund.* - The amount of £58,392,000 provided for interest and sinking fund in 1951-52 relates only to Commonwealth war debt. (Total debt charges on Commonwealth debt are estimated at £67,282,000 in 1951-52 as compared with £66,600,000 in 1950-51.) *War Gratuity.* - Total payment to the Wor Gratuity Reserve from Consolidated Revenue in 1950-51 was £30,630,000. The balance in the Reserve as at 30th June, 1950, was £36,751,403. Thus the total amount available in the Reserve to meet War Gratuity in 1950-51 was £67,381,403. Under the provisions of the Act, War Gratuity generally became payable on 3rd March, 1951. Actual expenditure from the Reserve in 1950-51 was £61,447,000, leaving £5,934,000 to meet claims still outstanding. As it is expected that the balance in the Reserve will be sufficient to meet possible claims during 1951-52, no further transfer from Consolidated Revenue is required. The provision of £20,000 is to meet administrative expenditure. *War Pensions.- Actual* expenditure in 1950-51 was £27,532,000. The estimate of £33,234,000, allows for an increase in the number of pensioners, for increases in rates of war pension now proposed, and for the full-year effect of the increases in rates which operated from November, 1950. *Repatriation.* - Expenditure for 1951-52 is estimated to increase to £11,052,000, compared with' actual expenditure of £9,381,000 in 1950-51. The principal increase is in expenditure on maintenance of repatriation hospitals. *Reconstruction and Rehabilitation.* - Expenditure under this head is estimated to fall from £4,963,000 in 1950-51 to £4,318,000 in 1951-52. Lower expenditure on university and technical training will, it is estimated, be partly offset by increased payments to the States in connexion with War Service Land Settlement. *Defence Services* (1939-45 War). - Provision for all expenditure in 1951-52 of the Defence Services and of the Supply and Defence Production Departments has been included under appropriate votes for Defence Services. *Credits.* - Receipts from credits are expected to be £1,800,000 in 1951-52, compared with £5,299,000 in 1950-51. Recoveries from other Administrations, receipts from war disposals and other collections are expected to show a substantial decrease on the figures for 1950-51. In each year from 1947-48 to 1949-50 the National Welfare Fund Act provided for the payment from Consolidated Revenue to the National Welfare Fund of a sum equivalent to the collections of Pay-roll Tax and Social Services Contribution. With the amalgamation of Income Tax and Social Services Contribution in 1950-51 it became necessary to devise a new formula for determining the amount to be transferred to the National Welfare Fund each year. For 1951-52 and subsequent years it is provided that, in addition to collections of Pay-roll Tax, there shall be payable from Consolidated Revenue an amount determined by varying the base amount of £103,958,000 according to the increase or decrease in collections of Pay-roll Tax. Pay-roll Tax is expected to increase from £28,721,000 in 1950-51 to £40,000,000 in 1951-52- an increase of 39.27 per cent. The estimated transfer to the National Welfare Fund in 1951-52 has gone up accordingly. The principal increase in expenditure under this item is in respect of debt charges relating to the dollar loan, which are estimated to total £630,000 in 1951-52 as compared with £62,628 in 1950-51. The provision for public service pensions and retiring allowances takes account of the increasing number of beneficiaries and the effect of increases in superannuation benefits. The estimates of Departmental expenditure allow for the effect in 1951-52 of increases which have already taken place in wages and salaries and other costs. Allowance has been rondo also for the effect in .1951-52 of the Government's decision to make a number of economies, including the reduction in the number of administrative employees. The principal increase expected in Departmental expenditure in 1951-52 is for the Department of Civil Aviation and is due to the increased COSt of maintaining aerodromes and technical services. *Wool Products Bounty.* - In 1950-51 a bounty was paid on tops, noils, yarns and wastes manufactured in Australia from wool appraised by the Australian Wool Realization Commission between the commencement of the first auction series (28th August, 1950) and 30th June, 1951. Expenditure during the year amounted to £14,875,000. , Advances of bounty were paid to manufacturers when they purchased raw wool, according to a table of rates for each different class of wool. These advances were converted into final payments on production of evidence that wool en which advance payments of bounty had been made had been manufactured into wool products. The Government has decided that a bounty on wool products will not be payable in 1951-52. A provision of £2,220,000 has been made, however, for the payment in 1951-52 of claims under the Wool Products Bounty Act which were outstanding at 30th June, 1951. *Tractor Bounty.* - Under a recent amendment of the Tractor Bounty Act, provision was made for the payment of bounty on tractors manufactured and sold in Australia during a three-year period commencing on 24th October, 1950 (the date when the payment of bounty under the *Tractor Bounty Act* 1939-1947 expired). The new rates of bounty vary between £32 and £96 per tractor according to horse-power. Estimated expenditure in 1951-52 is £180,000, compared with actual expenditure of £90,000 in 1950-51. *Flax Canvas Bounty.* - Under the Flax Canvas Bounty Act of 1950 a bounty of up to £60 per ton is payable on flax fibre used by Australian manufacturers in the manufacture of flax canvas during the two year period commencing on 17th July, 1950. Estimated expenditure in 1951-52 is £30,000 (the maximum annual expenditure authorized under the Act). *Subsidy on Dairy Products.* - In accordance with a guarantee given by the Commonwealth for the five years commencing 1st April, 1947, farmers' returns from butter, cheese and processed milk products have to date been based on cost of production, which is the subject of investigation and report each year by the Joint Dairying Industry Advisory Committee. As a result of the Committee's most recent findings, the Commonwealth decided that during 1951-52 farmers should be guaranteed a return of 3s. 6d. per lb. of commercial butter. The Commonwealth also decided that the subsidy payable in respect of butter and cheese for 1951-52 should not exceed £16,800,000. *Tea Subsidy.* - Provision has been made for the continued payment of subsidy on tea throughout 1951-52 on a similar basis to the subsidy now being paid. *Coal Subsidy.* - The Commonwealth has agreed to subsidize up to 2,250,000 tons of Indian and South African coal imported by the States of Victoria and South Australia on the Commonwealth's account by 30th June, 1953. The subsidy is designed to bring the landed cost of this coal down to that of Newcastle coal. Coal which otherwise would have been supplied to Victoria and South Australia from New South Wales will continue to be diverted by the Joint Coal Board to basic industries, principally the steel industry in New South Wales. If there are deficiencies in tho delivery of New South Wales coal to Victoria and South Australia (after making allowance for the importation of coal on Commonwealth account) any additional imports by these States on their own account to make good such deficiencies will also qualify for subsidy on the same basis as that payable on coal imported on the Commonwealth's account. In addition, the Commonwealth has agreed with the State of Victoria' to subsidize down to the cost of New South Wales coal the cost of Callide coal delivered to Victoria during the calendar years 1951, 1952 and 1953. It is estimated that expenditure on the coal subsidy in 1951-52 will amount to £5,210,000 compared with actual expenditure of £1,704,000 in 1950-51. *Subsidy on Nitrogenous Fertilizers.* - The Government has decided to continue to subsidize nitrogenous fertilizers during 1951-52 at the annual rate of £500,000. In view of increased costs, it was necessary in July, 1 951 , to increase the wholesale price of ammonium sulphate from £24 10s. to £32 per ton in order to keep the subsidy within the limit of £500,000. *Freight Subsidy on Wheat Shipped to Tasmania.* - Prior to December, 1938, Tasmanian importers purchased wheat in the normal course and paid freight on it. From 1938 to October, 1949, Tasmanian importers through either Flour Tax or Wheat Board arrangements received wheat at a cost not in excess of the mainland price. In October, .1949, the Wheat Board discontinued its practice, then in force, of making wheat available at Tasmanian ports at the mainland price. The Tasmanian Government met the freight cost between October, 1949, and November, 1950. As a temporary measure the Commonwealth agreed to meet the cost during the twelve months ending 30th November, 1951. The provision of £125,000 in 1951-52 has accordingly been made to cover the cost of the subsidy until tho latter date. *Subsidy on other Items.* - The provision of £30,000 is required to pay outstanding claims in respect of subsidies which have been discontinued. {:#subdebate-29-5} #### Item No. 7. - Miscellaneous Services Expenditure on Miscellaneous Services is estimated at £28,463,000 for 1951-52, which is £10,242,822 greater than actual expenditure in 1950-51. The major items are shown in the following table : - The estimated increase of £1,564,396 in expenditure on Miscellaneous Services by the Prime Minister's Department relates mainly to the Commonwealth grants to universities to be paid during 1951-52 (£1,496,000) and expenses connected with the Royal Visit (£240,000). Of the total amount of £11,791,000 provided under the Miscellaneous Services votes of the Department of Immigration, £5,885,000 is to meet the Commonwealth's contribution to the cost of passages of persons migrating to Australia from the United Kingdom, Holland, Italy, Malta, Republic of Ireland, the United States of America and Western Europe ; £5,032,000 for the maintenance of migrants in, and the equipping of, migrant accommodation establishments ; £500,000 for a medical and hospital service at migrant reception and holding centres ; £160,000 for the education of non-British migrants in the English language ; and the balance of £214,000 for migration publicity, capita] grants to approved child and youth organizations and to the States for the provision of accommodation for migrants, trade testing of migrants, assimilation activities and other miscellaneous items of expenditure. Of the amount of £9,906,000 to be expended on International Development and Belief in 1951-52, £8,750,000 relates to the contribution to be made by Australia to assist the countries of South and South east Asia with their economic development programmes under the Colombo Plan. This contribution, which is the first to be made by Australia under the Colombo Plan, will be distributed l y way of grant with £4,200,000 going to India, £2,000,000 to Pakistan, and £300,000 to Ceylon. A further £2,250,000 will be held temporarily in reserve. In addition, it is expected that £200,000 will be spent in 1951-52 as part of a joint British Commonwealth programme to provide techical assistance to these countries. In 1951-52, Australia will also be contributing £500,000 to the Belief and Rehabilitation Programme organized by the United Nations for Korea, compared with £300,000 in 1950-51. Similarly, further contributions will be made for Palestine relief and under other international assistance programmes. {:#subdebate-29-6} #### Item No. 8. - Business Undertakings *Commonwealth Railways.* - Expenditure for 1951-52 is estimated at £4,053,000 compared with actual expenditure of £3,381,000 in 1950-51. The increase of £672,000 is due mainly to higher operating costs. An amount of £500,000 is provided to reimburse the Commonwealth Railways for the loss sustained in the carriage of Leigh Creek coal at concessional rates. This provision is £200,000 higher than in 1950-51. *Postmaster-General's Department.* - Total expenditure on ordinary services in 1951-52 is estimated at £64,511,000, representing an increase of £9,709,000 over actual expenditure in 1950-51. Wage and salary payments are estimated to be £6,956,000 greater because of basic wage adjustments, the effect for a full year of the basic wage increase in December, 1950, and award increases. Provision for stores and material is £892,000 higher because of increased costs. These estimates allow for the savings which are expected in Post Office expenditure as a result of reductions in staff and other economies. *Broadcasting.* - Estimated expenditure for 1951-52 is £3,949,000 compared with actual expenditure of £3,591,000 in 1950-51. The increase is mainly due to the higher level of wages and salaries and to the increased cost of maintaining technical and other services. These increased costs have been partly offset by a number of economies in expenditure. *Northern Territory and Australian Capital Territory* - This expenditure relates to the general works, . health and miscellaneous services in the Northern Territory and in the Australian Capital Territory. The increased expenditure for Northern Territory is due to higher salary and wage costs, higher costs of supplies and some extension of activities. *Papua and New Guinea.* - Expenditure under this head consists of the grant paid by the Commonwealth to the Administration of the Territory of Papua and New Guinea to meet the deficiency between revenue and expenditure in the Territory. The increased grant is to meet higher salary and wage costs, the cost of expanding services (such as hospitals, education and agriculture services), and heavier expenditure on the development of the Territory. Item No. 10. - Commonwealth Payments to or for the States. *Estimated Payments* 1951-52 *Compared with Actual Payments* 1950-51. *Tax ReimbursementGrant Determined Under Formula.* - Following the decision of the Commonwealth Government to continue uniform taxation of incomes and entertainments indefinitely, provision was made in the *States Grants (Tax Reimbursement) Act* 1946, for payment of tax reimbursement grants to States which did not levy income taxation. Legislation was passed in 1947 and in 1948 amending the basis for determining the aggregate grant. Under the *States Grants (Tax Reimbursement) Act* 1946-48 the aggregate grant was fixed at £40,000,000 in 1946-47 and £45,000,000 in 1947-48 whilst in respect of subsequent years the Act provides for the aggregate grant of £45,000,000 to be varied in accordance with a formula which takes account of - (a) Variations in the States' population since 1st July, 1947 ; and {: type="a" start="b"} 0. The percentage increase (if any) in the level of average wages per person employed over the level in 1945-46. The amount payable to the States in 1950-51 in accordance with this formula was £70,398,000 whilst it is estimated that the amount payable in 1951-52 will be £86,443,000. The estimated grants payable to individual States in 1951-52 arecompared below with the grants in the four previous years. The tax reimbursement grants paid annually to each State are reduced by the amount of any arrears of State income taxation which may bo received in that year by the State. In 1950-51 these arrears amounted to £291,000. The arrears in 1951-52 will probably be insignificant. *Additional Payments to Assist State Revenues.* - In 1950-51, two additional grants aggregating ?20,000,000 were made to all States to supplement the amount of ?70,398,000 payable under the *tax* reimbursement formula thus bringing the total payments to ?90,398,000. The first additional grant was decided upon at a Premiers' Conference in September, 1950, when the Premiers indicated that they were confronted with substantial budget difficulties in 1950-51 particularly by reason of rising costs. The Commonwealth decided to mako available' in 1950-51 an additional tax reimbursement grant of ?6,000,000 and to distribute the grant among the States in the same proportions as the tax reimbursement grant determined under the formula. Later in 1950-51 it became apparent that various special factors (such as the increase of ?1 in the basic wage) had increased the financial needs of the States. The Commonwealth therefore made available late in 1950-51 a special financial assistance grant of ?15,000,000 and distributed the grant among the States having regard to the financial needs of the respective States in that year. The need of the States for further revenue grants over and above the amount payable under the tax reimbursement formula in 1951-52 was discussed at a Premiers' Conference held in August, 1951. The Premiers were informed that the Commonwealth would be prepared to make a supplementary grant to the States in 1951-52 sufficient to bring the total payment to ?120,000,000. . As the amount payable under the tax reimbursement formula in 1951-52 is estimated at ?86,443,000, the amount of this special financial assistance grant is estimated at ?33,557,000. The manner in which this grant is to be distributed among the States is shown in the Table below. Separate legislation to authorize the payment of this grant will be introduced shortly. *Special Chants.* - Special grants have been paid annually by the Commonwealth to Western Australia since 1910, to Tasmania since 1912, and to South Australia since 1929. With the establishment of the Commonwealth Grants Commission in 1933, the special grants paid each year to these States have been n accordances with the recommendations of the Commission. The Report of the Commonwealth Grants Commission on the applications by South Australia, Western Australian and Tasmania for special grants from the Commonwealth in 1951-52 is not yet available. Ponding receipt of the Commission's Report, an amount of ?10,522,000 has been included tentatively in the Estimates for special grants to these three States. In 1950-51 special grants paid to these States On the recommendation of the Commonwealth Grants Commission amounted to ?12,175,000. *Payments under Financial Agreement.* - Under the Financial Agreement, which was entered into between the Commonwealth and the States in 1927, the Commonwealth agreed to contribute certain amounts towards meeting the interest and sinking fund payments in respect of the States' debts. The Agreement provides that the Commonwealth will in each year during the period of 58 years commencing on 1st July, 1927, contribute a fixed amount of ?7,584,9] 2 towards the interest payable on the States' debts. The Sinking Fund contributions made by the Commonwealth in respect of the States' debts vary according, to the nature of the borrowings. The Commonwealth contributions in respect of Sinking Fund on States' debts are paid direct to the National Debt Sinking Fund. In .1050-51 these contributions amounted to ?2,24.1.000 whilst the contributions in 1951-52 are estimated at ?2.554,000. *Commonwealth Aid Roads Grants.* - During the three years ended on 30th June, 1950, roads payments to the States were governed by the provisions of the *Commonwealth Aid Roads and Works Act* 1947-1 949. This Act expired on 30th June, 1950, and was replaced by the *Commonwealth Aid Roads Act* 1951. The main features of the new legislation which operated in 1950-51 are as follows : - {: type="a" start="a"} 0. The new legislation is to operate for a period of five years as from 1st July, 1950 ; {: type="1" start="6"} 0. Provision is made each year for purposes of the Act of a sum equivalent to 6d. per gallon Customs Duty and 31/2d. per gallon Excise Duty collected under the relative Tariff items in respect of petroleum and shale products entered for home consumption, excluding duties payable on goods used in civil aircraft for the purpose of civil aviation ; 1. Payments each year under the legislation fall into the following categories : - {: type="i" start="i"} 0. Grant to the States for general road purposes. These purposes include the construction, reconstruction, maintenance and repair of roads and the purchase of road-making equipment. Provision is made that the States may allocate any portion of this grant to Local Authorities for general roods purposes ; 1. Grant to the States for roads in rural areas other than highways, trunk and gazetted main roads. This grant is available for roads such as developmental roads, feeder roads, roads in sparsely settled areas and in soldier settlement areas and roads in country municipalities and shires. 2. Payments by the Commonwealth for strategic roads and road safety of up to £500,000 and £100,000 respectively each year. The provision from Consolidated Revenue for Commonwealth Aid Roads payments in recent years is shown below - *Administration of Prices and Rent Controls.* - The States took over the administration of prices, rents and land sales controls towards the end of 1948 and the Commonwealth agreed to reimburse them for the additional cost in which they would be involved in 1948-49 by reason of their administration of these controls. The grants continued in 1949-50. Land sales controls were discontinued by the States in 1949-50 and the Commonwealth agreed to continue reimbursement of the cost of administering prices and rent controls in 1950-51. New legislation to authorize the continuance of the payments in 1951-52 will be introduced shortly. Payments to date together with the estimated payments in 1951-52 are set out below : - *Western Australia Waterworks Grant.* - Under the *Western Australian Grant (Water Supply) Act* 1948, the Commonwealth agreed to provide financial assistance to the Western Australian Government in respect of a scheme for the reticulation of water to certain agricultural areas in the north-eastern portion of the State's mixed wheat and sheep belt, and also for the provision of domestic water supplies to certain towns along the Great Southern Railway. The Commonwealth financial assistance is limited to one-half of the capital cost of the project, with an upper limit of £2,150,000. Up to 30th June, 1951, payments to the Western Australian Government amounted to £256,000. An amount of £400,000 has been provided in the Estimates for this purpose in 1951-52. *Encouragement of Meat Production.* - In order to increase exports of meat to the United Kingdom, the Government is pressing on with measures designed to stimulate the development of the pastoral industry in Northern Australia. The provision of new and improved facilities for the movement of cattle both by road and stock route is proceeding in the Northern Territory, in the Channel Country of southwest Queensland and in the area serving the meatworks at Wyndham, Western Australia. The Governments of Queensland and Western Australia are responsible for the constructional work within their respective States and Commonwealth financial assistance is being afforded to them in accordance with the *Stales Grants (Encouragement of Meat Production) Act* 1949. Payments under the Act are estimated at £310,000 in 1951-52 as compared with £315,000 in 1950-51. *Coal Mining Industry - Long Service Leave.* - In the States where coal-miners have been awarded long service leave by the industrial tribunals concerned the State Governments have agreed to reimburse employers in the coal industry the amount of the costs they incur individually in granting the leave awarded their employees. The Commonwealth has in turn agreed to reimburse the States the amounts paid and the administrative costs incurred by the States in giving effect to these arrangements. To provide the funds required for these purposes an Excise has been imposed on coal under the *Coal Excise Act* 1949. An amount equivalent to the proceeds of the Excise is appropriated to a Trust Account under the *States Grants (Coal Mining Industry Long Service Leave) Act* 1949-1950. *Imported Houses.* - The Commonwealth pays to the States a subsidy on imported prefabricated houses of up to ?300 a house or such lesser amount as may be required to reduce the average cost of the houses imported to that of locally-built houses. The Commonwealth subsidy is available for up to 30,000 houses imported by State housing authorities approved by the Commonwealth. The houses are to be primarily for housing workers for industries essential to national development. An amount of ?2,600,000 is provided in the 1951-52 Estimates for this purpose as compared with actual expenditure of ?170,000 in 1950-51. This year, the Co-ordinator-General of Works, after examining draft estimates of Departments for civil works expenditure, submitted to the Loan Council a report on Commonwealth civil works for 1951-52 on lines similar to those followed in his report on States' works programmes. The programme submitted to the Loan Council comprised works totalling £123,752,000. At the Loan Council meeting, the Commonwealth pressed for major reductions in States' works programmes and the Prime Minister stated that as part of the all-round reduction the Commonwealth Government was also prepared to reduce substantially its own civil works programme. The Commonwealth decided subsequently to reduce its civil works programme to £105,773,000. Total expenditure on capital works and services in 1951-52 is estimated therefor at £105,773,000 of which £101,648,000 will be provided from Consolidated Revenue and the balance of £4,125,000 from Loan Fund for War Service Land Settlement. **Major items** for which increased provision has been made in 1951-52 include Snowy Mountains Hydro-Electric Project (increase of £2,923,000), Post Office, telephone and telegraph works (increase of £3,902,000), and Railways (increase of £3,719,000). Substantial progress is expected to be made with the Snowy Mountains scheme during the current year, and it is estimated that the first block of power, amounting to 60,000 kilowatts, will be available by about the middle of 1954. The service on the Commonwealth Railways is being converted from steam to diesel traction. Diesel electric locomotives and diesel rail cars are being purchased, and contracts have been let for new and improved rolling stock. Savings have been made in working advances to the Post Office for the purchase of stores and materials. These advances totalled £11,000,000 in 1950-51 but no provision for such advances has been made in the 1951-52 estimates. A saving of nearly £1,000,000 in expenditure on the purchase of motor vehicles and equipment for the Department of Supply is also expected. {: .page-start } page 81 {:#debate-30} ### STATEMENT No. 5.- LOAN FUND TRANSACTIONS IN 1951-62 Estimated Commonwealth expenditure from Loan Fund in 1951-52 (excluding redemptions) is compared below with actual expenditure in 1950-51 : - It is estimated that loan moneys to the extent of £7,000,000 will be required in 1951-52 for the redemption of War Savings Certificates and Savings Certificates. Funds will also be required for redemption of other Commonwealth and State securities to the extent that maturing securities are not taken up by the National Debt Sinking Fund. {:#subdebate-30-0} #### Decisions of Australian Loan Council The Australian Loan Council, at its meeting in August, 1951, approved a borrowing programme of £225,287,000 during 1951-52 for public works and services of tho Commonwealth and State Governments. This represented a reduction of 25 per cent, on the aggregate borrowing programmes submitted. Included in this approved programme was £23,187,000 for Commonwealth Advances to the States under the Commonwealth-State Housing Agreement. (A further amount of £3,360,000 which represents carry-over from the 1950-51 programme is also included in the table above thus giving a total estimated outlay on account of Advances to the States for Housing of £26,547,000 in 1951-52.) The remainder of the programme consisted of States' requirements. ' The Loan Council also approved of a total borrowing programme of £81,643,000 for Semi-government Authorities under the " Gentlemen's Agreement " and £13,891,000 for other Semi-government and Loo£ Authorities. The Premiers concerned indicated that they would use their best endeavours to arrange a reduction of 25 per cent, in the Semi-government borrowing programme of their respective States submitted under the " Gentlemen's Agreement ". The increases in pensions will automatically raise the maximum permissible income (inclusive of pension) of a pensioner from £4 to £4 10s. Od. for a single am or invalid pensioner ; from £8 to £9 for a man and wife both eligible for an age pension ; from £4 5s. Od. to £4 15s. Od. for a Class A widow ; and from £3 12s. Od. to £4 for Class B and Class D widows. {:#subdebate-30-1} #### Means Test Liberalizations Proposed means test liberalizations include - {: type="a" start="o"} 0. raising of the property limits (other than exempt property, for example, a pensioner's dwelling) above which no pension is payable as follows : - {: type="a" start="b"} 0. for age, invalid and widows' pensions purposes, an increase in the amount of income (other than pension) allowed without reduction of pension of *na.* a week in respect of each child under sixteen years dependent on the pensioner or the pensioner's spouse ; 1. an increase of £1 a week in the standard of adequate maintenance applied in determining eligibility for pension of invalids over sixteen and under 21 years maintained by their parents ; 2. for blind pensioners an increase in the amount of income (other than pension) allowed without reduction of pension from £8 to £10 a week ; and 3. raising in each case from £500 to £750 the special exemption for means test purposes of the surrender value of life assurance policies, and the present value of reversionary interests. Altogether the proposed liberalizations of the means test will cost £1,300,000 in a full year and £870,000 in this financial year. {:#subdebate-30-2} #### Community Rehabilitation Proposals include an extension in the period for which treatment and vocational training may be given and an increase in the training and living away from home allowances payable to persons undergoing vocational training. The additional cost involved is estimated at £13,000 in a full year and £12,000 in this financial year. {:#subdebate-30-3} #### National Welfare Fund Transactions In the following table estimated National Welfare Fund transactions in 1951-52 arecompared with actual transactions in 1950-51. The estimated expenditure figures for 1951-52 allow for the proposals outlined above. {: type="a" start="a"} 0. The fullyear effect of newproposals would raise estimated expenditure as follows : - Age and Invalid Pensions £65,900,000 ; Widows' Pensions, £6,100,000 ; Tuberculosis Benefits, £3,300,000 ; Community Rehabilitation, £18,000 ; and would make total expenditure, £142,718,000. As shown in the table above, total expenditure from the National Welfare Fund in 1951-52 is estimated at £138,073,000 - an increase of £23,090,000 over actual expenditure in 1950-51. This increase is accounted for by the new proposals set out above, the full year effect of amendments made and new schemes introduced during 1950-51, and the normal increase in the number of beneficiaries. Total receipts are estimated at £185,915,000 or £52,249,000 more than actual receipts in 1950-51. Reference is made in Statement No. 4 to the basis on which the appropriation from Consolidated Revenue to the National Welfare Fund is calculated. I move - >That the first item in the Estimates, under Division No. 1 - The Senate - namely, " Salaries and allowances £16,400 ", be agreed to. Progress reported. {: .page-start } page 86 {:#debate-31} ### BUDGET PAPERS The following papers were presented : - >The Budget 1951-52 - Papers presented by , the Right Honorable **Sir Arthur** Fadden, M.P., for the information of honorable members on the occasion of the Budget of 1951-52. {:#subdebate-31-0} #### National Income and Expenditure 1950-51 Ordered to be printed. {: .page-start } page 86 {:#debate-32} ### SUSPENSION OF STANDING ORDERS Motion (by **Mr. ERIC** J. HARRISON - *by leave* - agreed to - >That so much of the Standing Orders be suspended as would prevent the taking of all necessary steps for the introduction, and motions for the first and second reading, of the following Bills: - Sales Tax (Exemptions and Classifications), Wool Sales Deduction Legislation Repeal, Broadcasting, Social Services Consolidation, States Grants (Special Financial Assistance) (No. 2), States Grants, States Grants (Administration of Controls Reimbursement), Loan (War Service Land Settlement), Loan (Housing), Supply (No. 2) and Supply (Works and Services) (No. 2). *Sitting suspended from 5.55 to 8 p.m.* {: .page-start } page 86 {:#debate-33} ### SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1951 Motion (by **Sir Arthur** Fadden) agreed to - >That leave be given to bring in a bill for an act to amend the Sales Tax (Exemptions and Classifications) Act 1935-1950. Bill presented, and read a first time. {:#subdebate-33-0} #### Second Reading {: #subdebate-33-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
McPhersonTreasurer · CP -- I move - >That the bill be now read a second time. It is proposed that a substantial amount of additional revenue required for the purposes of the budget shall be derived by way of increased sales tax. It is planned by these means to secure further revenue to meet the inescapable commitments of the Government. Furthermore, it is expected that the increased rates of sales tax will, in association with other steps taken by the Government, allow material and labour to be diverted to the production of goods required for defence and essential development. It is intended, as previously announced, to increase the sales tax rates so as to raise additional revenue amounting to approximately £35,000,000 during the current financial year. In order to determine the best and most equitable means of achieving this end, the field of goods covered by the sales tax has been very comprehensively reviewed. Those who have attempted to forecast the budget have had a great deal to say about heavy taxes on luxury goods. Few would venture to lay down a definition of such goods. The fact is that there are very few classes of goods which can, without qualification, be classed as luxuries. {: .speaker-K8B} ##### Mr Curtin: -- The Treasurer is a luxury. {: .speaker-F4T} ##### Sir ARTHUR FADDEN: -- The honorable member for Watson **(Mr. Curtin)** is a nuisance. It follows that even if it were possible to effect a satisfactory segregation of luxury goods, the amount of additional revenue which would be gained from those goods alone, even at a rate of 100 per cent., would be relatively insignificant. It is inevitable, therefore, that the sales tax increases must apply to numerous classes of goods which are not regarded as luxuries. The basic needs of the people in the form of food, clothing and medicines are already exempt from sales tax. There are other classes of goods which, although they may be classifiable as essential, may be said to have varying degrees of essentiality. In announcing that certain goods regarded as being in the less essential categories are to bear higher rates of tax, I wish to make it clear that these goods are not necessarily branded by the Government as luxuries. The Government freely admits that many of them serve a very useful purpose. Nevertheless, it has been found necessary, in the light of current economic conditions, to subject them to higher rates of sales tax. Of the additional sales tax revenue of £35,000,000 to be raised in the current financial year, approximately one-half will be secured by increasing the general rate of sales tax from 8-J per cent, to per cent. Other goods will be subject to rates ranging from 20 per cent, to 662/3 per cent. The new maximum rate will apply to jewellery, imitation jewellery and fancy goods, cut glass and crystal, ornaments and vases, plated ware and fur garments. These goods have hitherto borne tax at the rate of 331/3 per cent. The rate of 662/3 per cent. will also apply to watches ornamented with jewels or imitation jewels, which are regarded clearly as a luxury line. Watches without such ornamentation will remain subject to the present rate of 331/3 per cent. The rate of tax on toilet preparations and cosmetics is being raised from 331/3 per cent. to 50 per cent. There has been previous criticism of the rate of tax applied to these goods on the ground that it constitutes unfair discrimination against the feminine sections of the community. It has been urged that it is unfair to tax the toilet requisites of the ladies at a higher rate than the toilet requisites of men and particular reference has been made in this regard to the fact that razor blades and other shaving accessories have been taxed at the general rate only. In order to remove what may be regarded as unfair discrimination, it is proposed to include safety razors and razor blades, shaving brushes, shaving soaps and shaving creams in the toilet requisites which will be subject to the rate of 50 per cent. The rate of 331/3 per cent. will be payable in respect of wireless sets, radiograms, gramophones and gramophone records, which have been, until now, taxed at the rate of 25 per cent., but musical instruments generally remain subject to tax at the present rate of 25 per cent. Equipment for sports and games, toys and associated articles which have hitherto borne tax at the general rate will also be subject to the rate of 331/3 per cent. Motor cars will be taxed at the rate of 20 per cent., instead of 10 per cent., and the rate of 20 per cent. will also apply to confectionery and ice cream, instead of the general rate. Full details of the goods affected, and of the new rates applicable thereto, will be found in a statement which I have circulated for the information of honorable members. No change is being made in the rate of tax applicable to photographs, cameras, travelling bags, handbags, baskets and fountain pens. These goods remain subject to tax at the rate of 331/3 per cent. The bill also contains provision for a limited range of further exemptions of a minor character. These are mainly in the form of a logical widening of existing exemptions, with the object of removing anomalies. The consequent loss of revenue will not exceed £16,000 in the current financial year. The most important of these amendments is that which extends to private hospitals conducted by non-profit organizations, the exemption from sales tax already enjoyed by public hospitals in respect of goods for their use. This concession is being allowed in conformity with a proposal to amend the Income Tax Assessment Act, upon the recommendation of the Commonwealth Committee on Taxation, to allow concessional deductions in respect of gifts to such private hospitals. Exemption is also being granted in respect of certain goods of a kind designed for the use of blind persons. These goods are Braille-writing frames, Brailleplaying cards and " talking book machines " - there are some of them in the opposite corner of the House - which are specially constructed gramophones designed to play, at a very slow speed, records of stories or books, as a substitute for reading for the blind. {: .speaker-BV8} ##### Mr Calwell: -- Honorable members are listening to an example now. {: .speaker-F4T} ##### Sir ARTHUR FADDEN: -- The honorable member for Melbourne **(Mr. Calwell)** must be hearing his own echo. Hitherto the exemption from sales tax of certain classes of educational films Las been limited to films imported into Australia. Similar films are now made in Australia to a limited extent, and it is proposed that they also shall be exempt from sales tax. The exemption will be limited to films which are certified by the Commonwealth Film Censor as being of an educational character, and will be subject to the further condition that the films shall not be screened for commercial purposes in theatres. Examples of the classes of films affected are those dealing with industrial processes, soil erosion and other subjects of national interest and importance. The bill contains a provision to extend the exemption of passengers' furniture and household goods imported into Australia by persons arriving here from overseas. This exemption, which is based on a corresponding immunity from customs duty, is limited by the existing law to goods to the value of £125 a person. On and from the 8th December, 1950, the exemption from customs duty was raised to £400 a person. In view of the obvious desirability of a uniform range of exemption for the purposes of duty and sales tax, the Commissioner of Taxation sought and obtained my approval to act in anticipation of a corresponding amendment of the sales tax law on and from the 8th December, 1950. The bill now ratifies the action taken. The increase is, of course, of particular importance to the many thousands of migrants now coming to Australia with, in most instances, all their worldly goods. Particulars of the remaining exemptions are shown in the explanatory statement which has been made available to honorable members. In accordance with the usual practice, the amendments will operate on and from to-morrow, the 27th instant. There is, of course, much divergency of opinion as to the weight of tax which may or should be imposed in respect of various classes of goods. Not unnaturally, manufacturers of some goods are prone to consider their own interests only, and to urge that the burden be placed on the shoulders of others. My duty, and the duty of the Government, is to examine the economic situation as a whole, and, in the light of the best advice obtainable, to formulate proposals which it is considered will be in the best interests of the community generally. The necessity for increased taxation is greatly to be regretted, but the needs of the nation under present conditions must be the paramount consideration. It is in these circumstances that I commend the bill to honorable members. Debate (on motion by **Mr. Calwell)** adjourned. SALES TAX BILLS (Nos. 1 to 9) 1951. *In Committee of Ways and Means:* {: #subdebate-33-0-s1 .speaker-F4T} ##### Sir ARTHUR FADDEN:
Treasurer · McPherson · CP .- I move- {: type="1" start="1"} 0. That, on and after the twenty-seventh day of September, One thousand nine hundred and fifty-one, in lieu of the sales tax imposed by the Sales Tax Act (No. 1) 1930-1950, the SalesTax Act (No. 2) 1930-1950, the Sales Tax Act (No. 3) 1930-1950, the Sales Tax Act (No. 4) 1930-1950, the Sales Tax Act (No. 5) 1930- 1950, the Sales Tax Act (No. C) 1930-1950, the Sales Tax Act (No. 7) 1930-1950, the Sales Tax Act (No. 8) 1930-1950 and the Sales Tax Act (No. 9). 1930-1950, sales tax be imposed at the following rates, but otherwise in accordance with the provisions of those Acts: - {: type="a" start="a"} 0. in respect of goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - 20 per centum; 1. in respect of goods covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act - 25 per centum; 2. in respect of goods covered by the Fourth Schedule to the Sales Tax (Exemptions and Classifications) Act - 331/3 per centum; 3. in respect of goods covered by the Fifth Schedule to the Sales Tax (Exemptions and Classifications) Act - 50 per centum; 4. in respect of goods covered by the Sixth Schedule to the Sales Tax (Exemptions and Classifications) Act - 662/3 per centum; and 5. in respect of goods not covered by the Second, Third, Fourth, Fifth or Sixth Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable - 121/2 per centum. 1. That, for the purposes' of the foregoing resolution, "the Sales Tax (Exemptions and Classifications) Act" mean the Sales Tax (Exemptions and Classifications) Act 1935- 1950 as proposed to be amended by the Sales Tax (Exemptions and Classifications) Bill 1951. The purpose of this motion is to authorize those increases of the rates of sales tax that I indicated in connexion with the bill to amend the Sales Tax (Exemptions and Classifications) Act which has just received the attention of honorable members. It is. proposed that the goods specified in the new Second Schedule to that act shall bear tax at the rate of 20 per cent. The goods specified in the new Third, Fourth, Fifth and Sixth Schedules will bear tax at the rates of 25 per cent., 331/3 per cent., 50 per cent. and 662/3 per cent., respectively. The goods affected are listed in the explanatory statement that was circulated among honorable members in connexion with the bill referred to. In addition to the foregoing rates, the general rate of tax, which applies to the general field of goods that are not specified in any of the schedules, is to be raised from 8$ per cent, to 12^ per cent. The new rates are to operate on and from to-morrow, the September, 1951. The details of the proposals and their object have already been fully explained to honorable members. Progress reported. {: .page-start } page 89 {:#debate-34} ### WOOL SALES DEDUCTION LEGISLATION REPEAL BILL 1951 Motion (by **Sir Arthur** Fadden) agreed to - >That leave be given to bring in a bill for an act to repeal the Wool Sales Deduction (Administration) Act 1950, the Wool Sales Deduction Act (No. 1) 1950, and the Wool Sales Deduction Act (No. 2) 1950, and for other purposes. Bill presented, and read a first time. {:#subdebate-34-0} #### Second Reading {: #subdebate-34-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
Treasurer · McPherson · CP -- I move - >That the bill be now read a second time. The purpose of this bill is to repeal the three acts which comprise the wool sales deduction legislation. Those three acts are the Wool Sales Deduction Act (No. 1) 1950, the Wool Sales Deduction Act (No. 2) 1950 and the Wool Sales Deduction (Administration) Act 1950. Honorable members will recall that the wool sales deduction legislation was introduced in the budgetary session last year. The purpose of the legislation was two-fold. First, it formed a part of the Government's plan for controlling inflationary forces. The Government was concerned about the effect which the greatly increased spending power, arising from last season's high wool prices, would have on the national economy. Secondly, the 1950-51 provisional tax based on the 1949-50 income of producers would have been quite inadequate to meet the actual tax payable on the high incomes received by wool producers during the year ended the 30th June, 1951. The wool sales deductions taken as a prepayment of income tax supplemented this provisional tax. The Government announced at the last general election that the prepayment would be discontinued as soon as the provisional tax assessed during the year approximately equalled the tax on the income of the year. As honorable members are aware, there was a considerable decline of wool prices during the last few months of the 1950-51 wool-selling season. That downward trend has been confirmed at the sales for the current season. As a result of the reduced prices, the margin between the provisional tax and the actual amount assessed will be substantially less this year than it was in 1950-51. The Government therefore proposes that the legislation shall be repealed retrospectively as from the 1st July, 1951, and that deductions which have already been made from the proceeds of wool sold or exported on or after that date shall be refunded to producers. Provision has been made in the bill for those deductions to be refunded to producers by the Commissioner of Taxation. The bill contains a clause which provides that the legislation which it is proposed to repeal shall continue in operation in relation to wool sold or exported prior to the 1st July, 1951. This clause is necessary to preserve the. rights and obligations of producers in relation to past transactions. By clause 2 of the bill it is proposed that the repealing act shall come into operation on the day on which it receives the Royal Assent. The provisions of that clause will enable refunds of deductions made from the proceeds of wool sold or exported since the 30th June, 1951, to be made at the earliest opportunity. Refunds will be made by cheque payable to producers to whom wool sales deduction certificates have been issued. It will not be necessary for producers to apply for refunds. Clause 10 of the bill, which provides for the appropriation of the Consolidated Revenue Fund to the amount necessary to pay refunds of deductions made since the 30th June, 1951, will facilitate the payment of refunds to producers. The bill also contains machinery provisions which will authorize the collection and recovery of amounts, due under the repealed legislation, which may not yet have been paid. I commend the bill to honorable members. Debate (on motion by **Mr. Pollard)** adjourned. {: .page-start } page 90 {:#debate-35} ### TARIFF PROPOSALS 1951 {:#subdebate-35-0} #### Customs Tariff Amendments (Nos. 1 and 2) ; Excise Tariff Amendments (Nos. 1 and 2) ; Customs Tariff (New Zealand Preference) Amendment (No. 1) {:#subdebate-35-1} #### In Committee of Ways and Means: {: #subdebate-35-1-s0 .speaker-KNX} ##### Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production [8.20]. - I move - [Customs Tariff Amendment (No. 1 · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 That the Schedule to the Customs Tariff 1933-1950, be amended as hereinafter set out, and that on andafter the twenty-seventh day of September, One thousand nine hundred and fifty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1950 as so amended. {: type="1" start="2"} 0. That, without prejudice to the generality of paragraph (1.) of these Proposals, the GovernorGeneral may, from time to time byProclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation. 1. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation. 2. That any Proclamation issued in accordance with paragraph (2.) of these Proposals may, from time to time, be revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly. 3. That in these Proposals, unless the contrary intention appears - " Proclamation " means a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the *Commonwealth of Australia Gazette ;* " the Intermediate Tariff" means the rates of duty sot out in the Schedule to these Proposals, in the column headed " Intermediate Tariff ", in respect of goods in relation to which the expression is used. [Customs Tariff (New Zealand Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1950 be amended as hereinafter set out, and' that, on and after the twenty-seventh day of September, One thousand nine hundred and fifty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in accordance with the Customs Tariff (New Zealand Preference) 1933-1950 as so amended. The five tariff proposals that I have just introduced cover amendments to the Customs and Excise Tariff and to the Customs Tariff (New Zealand Preference). The summaries of alterations, which are attached to the proposals that have been circulated to honorable members, set out the proposed rates of duty as compared with those at present in operation. The proposed duties will operate on and from the 27th September, 1951. The proposals associated with the budget are Customs Tariff Proposals *No. 2* and Excise Tariff Proposals No. *2.* They are confined to beer, spirituous liquors, tobacco, cigarettes and cigars. The specific increase in the Customs Tariff on each class is - Beer 2s. 7d. a gallon; spirituous liquors, 31s. a gallon; manufactured tobacco 4s. per lb.; cigarettes 6s. per lb.; cigars 5s. lid. per lb., with corresponding increases applying to the Excise Tariff excepting in the case of tobacco, cigarettes and cigars, where tho rates of increase have been adjusted to take into account the 4i) per cent, rebate which, since the 31st October, 1943, has been permitted under the provisions of the Excise Tariff Rebate *Act* 1944, but which, henceforth, will not have application to the proposed rates. The duty increases have been so 'calculated that tho whole of the amount paid by the public in increased prices should be returned to the Commonwealth Treasury. It is anticipated that these customs and excise duties will yield a total increase of revenue of £24,000,000 for the remaining nine months of the current financial year or an increase of £32,000,000 in a full financial year. My colleague the Treasurer, in his budget speech earlier this day, indicated the need for seeking this additional revenue. Customs Tariff Proposal No. 1 is comprehensive in its scope. It covers - *(a)* the rein traduction of the tariff proposal that was introduced into the House on the 7th December, 1950, and was subsequently validated to the 30th September, 1951; (&) the implementation of recommendations made by the Tariff Board in recent reports covering a varied range of industries; and (c) alterations which, for administrative and other reasons, are necessary for the efficient working of the tariff. The reintroduction of the goods covered by the tariff proposal of the 7th December, 1950, is necessary, as the duties now being collected thereunder would otherwise have no validity after the 30th September, 1951. The principal goods in this category comprise gloves, electrically operated coal and stone drilling machines, hand tools of various types, glassware, chrome chemicals, phenol, medicinal preparations and hypodermic syringes. Goods included in this proposal on which the Tariff Board hasrecently reported, include plastic intermediate materials, synthetic resins, internal combusion engines, all-geared headstock lathes, electric torch cases,portable electric hand tools, alarm clocks and movements therefor, magnet winding wire, centrifuges, storage battery locomotives, mounted projection lenses, tool tips, hand hacksaw blades and various hand tools such as spirit levels, carpenters' chisels, carpenters' planes, spokeshaves, and calipers. Excise Proposal No. 1 relates to coal, concentrated grape must, spirits used in the manufacture of medicinal preparations for use in universities and spirit used in the manufacture of grape must. An additional duty of ltd. a ton is proposed on coal. The existing rate is 6d. a ton. The additional revenue arising from the proposed increase is required in order to meet the increased cost of long service leave to miners engaged in the coal industry. These proposals remove the existing excise duty of 3d. a gallon per degree of concentration above 15 degrees Baume on grape must - concentrated grape juice. This duty was first imposed in 1930 in order to offset the loss of excise duty resulting from the use of grape must in wine production in lieu of fortifying spirits. At that time the excise duty on fortifying spirits ranged between 10s. and Ils. a proof gallon whereas the existing rate stands at the comparatively low level of 4s. a proof gallon, which does not provide any incentive for wineries to use concentrated must for the fortification of wines. Revenue collections on grape must are comparatively small, amounting to approximately £4,000 per annum, and do not, under present-day conditions, justify the expense of their collection. The industry has on several occasions requested that this excise impost be removed in order to free it from the existing restrictive provisions which require the concentration of grape must to be carried out in a licensed excise factory under official supervision. "With the proposed freeing of concentrated grape must from excise duty it is also necessary to amend excise item 2 (j) in order to relieve the Department of Trade and Customs of its present responsibility of seeing that the fortified must is eventually mixed with wine. Spirits used in the manufacture of medicinal preparations for use in public hospitals are already exempt from excise duty, and it is proposed to extend the same concession to universities. Customs Tariff (New Zealand Preference) Proposal No. 1 is consequential upon the variations proposed to the Customs Tariff. The goods concerned are foundation garments, locomotives other than those operated by electrical storage batteries, internal combustion engines and cinematographs. At a later date it is intended to bring down the necessary bills to enable all proposals to be enacted. Full opportunity for discussion will then be available to honorable members. Progress reported. {: .page-start } page 104 {:#debate-36} ### BROADCASTING BILL 1951 Motion (by **Mr. Anthony)** agreed to - >That leave he given to bring in a bill for and act to amend the Broadcasting Act *1942-1050.* Bill presented, and read a first time. {:#subdebate-36-0} #### Second Reading {: #subdebate-36-0-s0 .speaker-JLZ} ##### Mr ANTHONY:
PostmasterGeneral and Minister for Civil Aviation · Richmond · CP -- I move - >That the hill be now read a second time. The purpose of this bill is to increase the fee for broadcast listeners' licences, except those issued to certain classes of pensioners, to £2, and to repeal the provision in the Broadcasting Act which requires listeners to obtain additional licences at half the ordinary fee for receivers which they possess in excess of one. The fee for the pensioners' licences will remain at 10s. The reason for the bill is that, whereas for many years following the establishment of the national broadcasting service the fees received from listeners were sufficient to meet the costs incurred in the conduct of the service, a stage has now been reached where expenditure exceeds revenue by nearly £2,000,000 per annum. This state of affairs is due mainly to two factors, the first .'being the tremendous expansion of the national service and the second being the inevitable impact of the rising level of prices and wages. In respect of the first point, the national broadcasting service has been extended year by year in accordance with a plan designed to provide a satisfactory service throughout the Commonwealth and its territories. The development which has taken place is indicated by statistics of stations in operation and total yearly transmission hours. In 1935, there were only twelve national stations in operation compared with 50 stations to-day, including short-wave services, whilst during the same period the total transmission time has been increased from 53,927 hours to 286,045 hours per annum. On the technical side, which is the responsibility of the Postal Department, these statistics have meant, to mention only a few things, the purchase of a large amount of expensive new equipment, the employment of greater numbers of skilled technical personnel, and the erection of thousands of miles of high-quality telephone channels over ever-increasing distances for the relaying of programmes. They have meant, in short, all that is involved in the provision of a national broadcasting service to a greater .and greater proportion of the Australian people, including those in the territories, so that -to-day it is estimated that over 90 per cent, of the Australian population is assured of satisfactory reception of the programmes of at least one national broadcasting station. However, in many districts, especially in rural areas, no really reliable service is being provided and plans have been made to effect improvements which will add considerably to the costs being incurred by the Postal Department on the maintenance and operation of the national broadcasting service. Commitments of the Australian Broadcasting Commission in connection with programmes have naturally increased correspondingly, and, in addition, the commission has exerted a constant effort through the years to improve the general quality of the national programmes which, it is everywhere admitted, are to-day of a high standard. These developments have taken place in more recent times under the pressure of rapidly rising price levels. It is not astonishing, therefore, that the outlay on the national broadcasting service has long since outstripped the revenue from broadcast listeners' licences, the fee for which was fixed at £1 ls. as long ago as 1934, and was reduced to the present figure of £1 in 1940. As I have said, this fee is insufficient to meet the present-day costs of the service; and the increase contemplated in this measure is designed to ensure that the cost of the national broadcasting service shall be met from the licence-fees paid by listeners, as was intended by those who were responsible for the setting up of the Australian broadcasting system. The difficulties that confront us in this respect are not peculiar to Australia. In July, 1946, the British Government doubled its fee for a broadcast listener's licence. In a White Paper on Broadcasting Policy published at that time, it was indicated that that decision was made because of the considerable increase which had taken place in the cost of providing the broadcasting service, and that the average cost of each hour of programme was expected to be almost double the prewar level. The position in Canada was recently stated succinctly by the chairman of the Canadian Broadcasting Corporation, which is the National Broadcasting Authority in Canada, when he said the national broadcasting system " is squeezed between swollen costs and stationary revenue rates ". As I have already mentioned, the main purpose of the bill is to increase the fee for broadcast listeners' licences and to relieve listeners from the obligation of obtaining a half-fee licence for each broadcast receiver in their possession in excess of one. These changes in the licensing procedure necessitate a number of minor amendments to the existing provisions of the act relating to the grant of listeners' licences. It has, therefore, been deemed desirable to repeal the relevant sections, sections 96 to 101, and to insert in their stead new sections which repeat most of the existing provisions, appropriately amended to provide for the new conditions. Apart from that general observation, the bill requires little explanation. Its effect will be that listeners in Zone 1, which is the area within approximately 250 miles of a national broadcasting station, will pay *£2* instead* of £1 for a broadcast listener's licence, and those living in the remainder of the Commonwealth and the territories will pay £1 Ss. instead of 14s. as at present. Age and invalid pensioners, widow pensioners, and persons in receipt of a " service " pension under the Repatriation Act 1920-1950, who live alone or with another person whose income does not exceed that of a pensioner, will continue to pay a fee of 10s. only, and, as is the case to-day, no fees will be charged for licences for schools or for the blind. The present necessity for obtaining additional licences for extra receivers will be abolished. Thus a single licence will cover any number of receivers in the one family circle, and a factor which tends to complicate the licensing system both for the listener and the administration will be removed. Under this bill, existing section 100 under which sales of broadcast receivers must be notified by vendors to the Postal Department, will be omitted from the act, but the obligation will continue because a similar provision will bc inserted in the regulations made under the Broadcasting Act, which will require amendment in many respects as a result of the passing of the bill now before the House. Debate (on motion by **Mr. Calwell)** adjourned. {: .page-start } page 105 {:#debate-37} ### SOCIAL SERVICES CONSOLIDATION BILL 1951 Motion (by **Mr. Townley)** agreed to - >That leave be given to bring in a bill for an act to amend the Social Services Consolidation Act 1947-1950. Bill presented, and read a first time. {:#subdebate-37-0} #### Second Reading {: #subdebate-37-0-s0 .speaker-KWH} ##### Mr TOWNLEY:
Minister for Social Services · Denison · LP -- I move - >That the bill be now read a second time. The Treasurer **(Sir Arthur Fadden),** in submitting his budget, announced theGovernment's decisions in regard to increased social services. It is now my pleasant duty and privilege to introduce this bill to amend the Social Services Consolidation Act to give effect to those decisions. The bill provides for increases of age, invalid and widows' pensions and of the allowances payable in respect of the wife and child of an invalid pensioner. It also liberalizes the means test for pensions and removes some anomalies and restrictions. As the Treasurer has announced, the increase of age and invalid pensions will be 10s. a week, which will raise the maximum pension from £2 10s. to £3 a week. I particularly invite the attention of honorable members to the fact that this will be the largest increase granted in civil pensions since old-age pensions were introduced in the year 1909. A married couple, both pensioners, will receive a total increase of £1 a week, raising their pensions from £5 to £6 a week. In addition, they have, in common with other pensioners, a free medical service and -free pharmaceutical benefits. The allowance payable to the wife of an invalid pensioner will be increased from £1 4s. to £1 10s. a week, and the allowance which she receives for the first child under sixteen years of age will be increased from 9s. to lis. 6d. a week. In addition, child endowment of 5s. a week is payable. The total which an invalid pensioner and his wife may receive by way of pension, allowances and child endowment will thus be raised from £4 Ss. to £5 6s. 6d. a week. Endowment of 10s. a week is payable for each additional child under sixteen years of age. Substantial increases will also be made in civilian widows' pensions. The increase will be 10s. a week for a class A widow, that is, a widow who has one or more children under sixteen years of age. This will raise her pension from £2 15s. to £3 5s. a week. In addition, of course, she receives endowment in respect of each of her children. The increase for widow pensioners in classes B and D will be 8s. a week, which will raise the pension for these classes from £2 2s. to £2 10s. a week. As honorable members are probably aware, the class B pension is payable to a widow over 50 years of age who has no child under sixteen years of age, and the class D pension is payable to a woman whose husband has been serving a term of imprisonment for at least six months, if she is over 50 years of age or has one or more children under sixteen years of age. Ifr. *Townley.* The pension payable for a class C widow will be brought into line with that for widows in classes B and D. A class C widow is one who is outside the other classes but is in necessitous circumstances, the pension in such cases is payable for not more than six months after the husband's death. The increase of 10s. a week in pensions will automatically increase by that amount the total which a pensioner may receive by way of pension and other income under the means test. A single pensioner will be able to have a total of £4 10s. a week, composed of a pension of £3 and other income of £1 10s., whilst a married couple, both eligible for pension, will be permitted to have a total of £9 a week, composed of pensions aggregating £6 and other income totalling £3. The increased limits will benefit persons retired on superannuation who are also receiving age pensions. Whether their age pensions are at the maximum rate of £2 10s. a week or at a reduced rate, they will receive the full increase of 10s. for a single pensioner or £1 for a married couple, both of whom are eligible for pension. The. increase of 10s. in class A widows'" pensions will automatically raise the limit of pension and other income which the widow may receive under the means test from £4 5s. to £4 15s. a week, composed of a pension o£ £3 5s. and other income of £1 10s. Under another amendment, however, she will be permitted to have an additional income of 5s. a week, in respect of each dependent child under sixteen years of age, irrespective of the child endowment she receives. The limit which widow pensioners in classes B and D may receive by way of pension and other income will rise from £3 12s. to £4 a week, composed of a pension of £2 10s. and other income of £1 10s. The amendments allows additional permissible income of 5s. a week in respect of each dependent child under sixteen years of age will also apply to invalid and age pensioners with dependent children, and it will not be affected by the receipt of a child's allowance or child endowment. This liberalization of the permissible income in favour of pensioners with dependent children will afford a measure of relief to such pensioners, or their wives, who are courageous enough to endeavour to supplement the pension and allowances by engaging in employment. The present Government has already shown its practical sympathy for blind workers by increasing the amount that they are permitted to earn, in addition to their pensions, from £5 17s. 6d. to £8 a week. This increase was made in November last. I am pleased to say that the bill provides for a further increase of £2 in the amount that a blind pensioner may earn, which will now become £10 a week. Thus, within a year, the permissible income for blind pensioners has been raised by £4 2s. 6d. a week. A single blind pensioner will thus be permitted to have a total of £13 a week by way of pension plus earnings instead of £10 10s. as at present. A blind couple will be permitted to have earnings or other income of £10 a week between them and each will receive the full pension of £3, making a total of £16 a week between them, instead of £13 as at present. I know that this particular amendment will be welcomed by blind workers, and I am sure that it will give encouragement to all blind persons, who are physically capable, to fit themselves for occupations for which they are specially suited. This will give them a greater interest in life, whilst at the same time adding to the productive efforts of the community. As honorable members are no doubt aware, the act imposes certain ceiling limits on the total amount that a pensioner may receive by way of war pension plus age, invalid or widow's pension. Each of these limits is increased under the bill. The ceiling for a single pensioner is increased from £3 10s. to £4 a week, and for a married couple where only one of the parties is a civil pensioner, the increase is from £5, 7s. 6d. to £5 17 s. 6d. a week. The increase of the ceiling for a married couple, where both spouses are receiving civil pensions, is from £6 10s. to £7 5s. a week. The ceiling limit for a class A widow is increased from £4 to £4 10s. a week, whilst for other classes of widows the increase is from £3 10s. to £3 15s. a week. These increases of the ceiling limits will enable all age, invalid and widow pensioners who are also receiving war pensions to benefit from the increases of age, invalid and widows' pensions provided in the bill. I furtherpoint out that the ceilings are merely limits on dual pension payments, but there is nothing to prevent a pensioner from receiving additional income from some other source to bring the total *ot* his two pensions, plus that other income, up to the appropriate limit of income plus pension. The Government has also decided to make certain liberalizations of the means test on' property. The most important of these is the raising, by £250, of the limit of property which a person may have without being disqualified for a pension. As honorable members probably know, a person who has money or other property exceeding £750 is now disqualified from receiving an age or invalid pension. In the assessment of the value of property, the pensioiier'3 home, irrespective of its value, and his furniture and personal effects are disregarded. The bill raises the limit of £750 to £1,000. This will mean that a person will not be disqualified for an age or invalid pension under the property test unless the total of his money or property, apart from his home and personal effects, exceeds £1,000. The present scale of progressive deductions on account of property will be retained. This provides for an exemption of the first £100 and for a reduction by £1 per annum of the maximum pension for every complete £10 above £100 up to £450, and a further reduction by £2 per annum for every complete £10 above £450. In respect of husband and wife, the act requires that the value of property of each shall be deemed to be half the total value of property owned by both of them. Consequently, under the property amendment, a married claimant will not be disqualified for pension unless the total value of the property of husband and wife exceeds £2,000, instead of £1,500 as at present. In addition, of course, the couple may own .a home without limit in value, as well as furniture and personal effects. When the value of the property of a married couple, apart from their home, is between £200 and £2,000, the pension of each of them is reduced on the same scale as for single pensioners, which is applied to half the total value of their property. As a result of the raising of the property limit, a number of people who have previously been ineligible for an age or invalid pension will become eligible for pensions up to £59 per annum. The increase by £250 of the limit of property that a person may have without disqualification for pension will also apply to widows' pensions. The limit for a class A widow will rise from £1,000 to £1,250 and the limit for widows in classes B and D will rise from £750 to £1,000. There is no specific property limit for a class C widow. The bill also liberalizes the position under the property means test for age, invalid and widow pensioners who own life insurance policies. Honorable members will probably remember that in November of last year, the Government raised from £200 to £500 the special exemption that applies to the surrender value of life insurance policies. It is now proposed further to increase this special exemption from £500 to £750. This exemption will apply in addition to the general property exemption of £100. Thus, a pensioner who owns life insurance policies that have a surrender value of £750, or £850 will, if he has no other property, be able to receive a full pension so far as the property means test is concerned. The result will be that, in future, life insurance policies held by pensioners will have very little, if any, effect on the rate of pension. A further liberalization of the property means test will benefit persons who have an interest in an estate known as a reversionary interest. At present, the act provides for a special exemption of £500 of the present value of such an interest. The bill raises this to £750. This exemption, of course, applies not to the amount of money that the pensioner will receive on the death of the person who has a life interest in the estate but to the present value of that amount, which, of course, is very much less. These values are calculated on an actuarial basis. Where the pensioner has no other property, the ordinary exemption of £100 applies in addition. Many honorable members have been pressing for a long time for an amendment which, I am pleased to say, has been included in the bill. This will give to the Director-General of Social Services discretionary power to disregard the value of the whole or a part of a pensioner's property when he considers that there are special circumstances that justify such action. The Director-General already has this power in relation to widows' pensions, and it is an anomaly that he has no such power in relation to age and invalid pensions. Cases constantly come under notice of hardship suffered by pensioners who let their homes during the war years, or because of ill health or other circumstances, and have been unable to regain possession of those homes. Under the act as it stands, there is no option but to take the capital value of the property into account under the means test, and this causes either complete loss of pension or a considerable reduction of the rate of pension. The rent that is received from the property is generally used in paying for other accommodation. To me it seems wrong, in such circumstances, that pensioners should lose their pensions as the result of a situation from which they have derived no financial benefit. The amendment will enable the DirectorGeneral to disregard the value of the property for such length of time as he considers proper, where he is satisfied that the pensioner has taken, and is still taking, all reasonable steps to obtain possession of his property for a home. There are also instances where a pensioner sells his home and desires to use the proceeds to purchase a more suitable property for a home. In practice, the department allows the pensioner two or three months before reducing or cancelling the pension, although there is no specific authority in the act for this procedure. When the pensioner is doing everything possible to obtain a new home and is holding the money intact for that purpose, it is fair to allow the amount to be disregarded for a longer period; otherwise he is compelled to live on his capital and may have to abandon his intention to secure a new home. The amendment will enable the Director-General to deal equitably with such cases. There will, be cases of other types the special circumstances of which will justify the Director-General using the new discretionary power. There is no likelihood of this concession being abused by pensioners. Property will not be disregarded for an indefinite period but each case will be reviewed from time to time in the light of the circumstances and on its merits. Another amendment contained in the bill will enable a funeral benefit of £10, which is now payable towards the funeral expenses of an age or invalid pensioner, to be paid towards the funeral expenses of a person who was receiving an allowance under the Tuberculosis Act at the time of his death, but would have been eligible for an age or invalid pension if he had not been receiving the tuberculosis allowance. These allowances are the responsibility of my colleague' the Minister for Health **(Sir Earle Page),** but the payments are made by my department. In some cases a person who has been granted a tuberculosis allowance would have applied for the invalid pension if there had been no scheme for the payment of tuberculosis allowances. In the event of his death, therefore, his relatives should not be deprived of the funeral benefit which they would have received if he had obtained an invalid pension instead of a tuberculosis allowance. The bill also contains some amendments that liberalize the provisions of Part VIII. of the act which deals with the rehabilitation of physically handicapped persons. The chief of these is an amendment which extends from two to three years the period during which rehabilitatory treatment and vocational training may be given. At present an invalid pensioner or a person who receives a sickness benefit cannot be accepted for rehabilitation unless there are reasonable prospects of his engaging in a suitable vocation within two years. This provision limits greatly the field from which suitable candidates for rehabilitation may be recruited; it may exclude many deserving cases for whom rehabilitation is particularly desirable and it restricts the choice of calling in which training may be given. The extension of the period from two years to three years, provided for in the bill, will make the rehabilitation scheme more helpful and effective in achieving the purpose for which it was intended A further extension of the rehabilitation scheme is provided for in an amendment which will enable treatment and vocational training to be given to suitable persons, over 16 and under 21 years of age, who are disqualified for invalid pension because they are adequately maintained by their parents. At present, such invalids are not only disqualified for pension but also denied the benefits of the rehabilitation scheme. It is obviously desirable to restore the earning capacity of these persons, wherever possible, not only for their own sake and because of the benefit of their labour to the community, but also to prevent them from becoming permanently dependent on the Commonwealth as invalid pensioners when they reach the age of 21 years. In mentioning the provision of the act which disqualifies for pension invalids over 16 and under 21 years of. age who are adequately maintained by their parents, I think it desirable to say that the Government has made a decision to increase by £1 a week the standard amount regarded as representing adequate maintenance in these cases. The standard will be increased from £3 to £4 a week, which means that an invalid under 21 years living with his parents will not be disqualified for pension unless the income of his parents is £12 a week or more, instead of £9 as at present. An additional £2 a week of income will be allowed for each dependent child under 16 years. This liberalization does not require parliamentary approval and it will be brought into operation immediately. It will enable invalid pensions to be granted in a number of cases to persons between 16 and 21 years of age who are now disqualified under the existing standard of adequate maintenance. The bill also provides for increases of certain payments which are made to persons who are undergoing vocational training. These trainees receive a rehabilitation allowance which is paid at the same rate as an invalid pension and is subject to the same means test. Consequently, all trainees now in receipt of a rehabilitation allowance of £2 10s. a week will receive £3 a week. "Where the trainee is married his wife's allowance of 24s. will he increased to 30s. a week. The allowance for one child under sixteen years will also be increased from 9s. to lis. 6d. a. week. In addition to the allowances mentioned, a trainee is paid a training allowance which at present is £1 a week. This allowance is to be increased under the bill to 25s. a week. Thus, a single trainee will receive a total increase in his payments of 15s. a week and a married trainee, with one or more children, will receive an increase of 23s. 6d. a week, including the increased allowances for his wife and child. The bill further provides for increases of the special .allowances paid to trainees who are required to live away from their homes for the purpose of receiving vocational training. The allowance for an unmarried trainee, which is payable for four weeks, will be increased from 15s. to £1 a week. The allowance for a married trainee who has no child Under sixteen years of age will be increased *from 30s. to £2* a week for the first four weeks, and from 15s. to £1 a week thereafter during the period of training. The living-away-from-home allowance for a married trainee, who has one or more children under sixteen years of age, will be increased from 30s. to £2 a week. In this case the allowance is payable throughout the period of training. Another amendment in connexion with the rehabilitation scheme will enable the Department of Social Services to pay the fare of an attendant to a person who is required to travel to obtain treatment or training, to attend for medical examination or to interview the selecting panel, where a medical officer certifies that an attendant is necessary. At present fares may be paid only in respect of the person who is undergoing treatment or training. The amendment goes further and gives to the Director-General 'power to pay such an amount as he considers reasonable for the living expenses of the person undergoing or seeking rehabilitation, and for the attendant, when travelling is necessary in the circumstances mentioned. This is not the time to speak at much length on our rehabilitation activities. Just now I can only make passing reference to what. I regard as a particularly valuable practical social service. Whether judged from the economic or the social viewpoint, or considered from its preventive or restorative value, or examined from a purely humanitarian aspect, this work compels both admiration and support. For the few years that this plan has been in operation some 2,700 persons, ineluding more than 1,000 invalid pensioners, have been restored to earning capacity and placed in suitable jobs. This represents a financial saving of at least £2,000,000 on pensions and allowances. It is not possible to say what the total effect on the national economy may be. The annual earnings of the rehabilitated pensioners probably exceed £500,000, and whilst contributions to revenue may be calculated, those to industry generally can only be guessed. There is no doubt that the success of the scheme to date has more than justified its introduction. The bill contains other amendments of a minor nature. One of these extends from three to six months the period after the birth of a child during which a claim for a maternity allowance may be lodged. In addition to this extension, discretionary power will be given to the DirectorGeneral to extend the period of six months in special circumstances. Similar discretionary power will also be given to the Director-General to enable him, in special circumstances, to extend the period of six months for the lodgment of claims for child endowment without loss of arrears. A word of explanation is necessary in regard *to* a clause in the bill that deals with the adjustment of overpayments in certain circumstances. Cases arise where a person who has received a social services pension or benefit has been overpaid, due to the receipt of income or property, or for some other reason, and that person has become entitled to some other pension or benefit under the act. Whilst adjustment could be effected by means of deductions from instalments if the original pension or benefit were continued or reinstated, this cannot be done where pension or benefit of some other type is granted. It is reasonable and necessary that such power should be provided so that Commonwealth expenditure on social services may be safeguarded. Deductions will not be made if this will cause hardship, and for this reason the DirectorGeneral is given discretionary power so that he may decide whether or not the overpayment should he recovered in this way. Deductions will not be made in such cases from a maternity allowance, child endowment or a funeral benefit. Honorable members will be interested to learn the cost of the increases and liberalizations that are provided for in the bill. The following summary gives the cost for a full year as well as for the current financial year : - From the information that I have given concerning the substantial increases of pensions and allowances and the various other liberalizations and concessions that are provided for in the bill, which will cost £13,500,000, I am sure that honorable members will agree that this measure is another clear indication of the sincere and practical interest of this Government in the social security of the people of Australia. That interest was made evident last year when, in its first year of office, the Menzies Government extended the child endowment scheme at a cost of £15,000,000 a year and provided increases and liberalizations of social service pensions and other benefits to the amount of £9,000,000 a year. Thus, in less than two years, the Menzies Government has increased and liberalized social service benefits to the amount of £37,500,000. Although this may give some satisfaction to supporters of the Government and the recipients of those benefits, I must confess that I am compelled by the mounting cost of social services to lean to the view that, before very long, there must be what may well be a revolutionary approach to this problem in Australia. Some further figures will lend point to this view. The expenditure on age and invalid pensions for the year 1950-51 was £49,500,000. As a result of the increases and liberalizations for which the bill provides and the normal increase of the number of pensioners, it is estimated that the expenditure on these pensions for the year 1951-52 will reach £61,770,000, whilst the liability for a full year will rise to £65,870,000. The expenditure on widows' pensions for 1950-51 was £4,S28,000. The estimated expenditure on these pensions for 1951-52 is £5,700,000, and the liability for a full year will become £6,100,000. Thus, the annual liability for social service pensions alone will become £72,000,000. The total expenditure on social services provided under the Social Services Consolidation Act for the year 1950-51 was £.102,592,000. The estimated expenditure on these services for the year 1951-52 is £119.450.000. Taking into account the cost of the increases and liberalizations for a full year, the annual liability for social services provided under the Consolidation Act will rise to £124,000,000. This is 31 per cent, greater than the total Commonwealth expenditure for the year 1938-39. In that year the total budget expenditure was £94,400,000, of which £16,400,000 was for social services. The Government is being urged on every hand to abolish the means test for pensions. No one can reasonably deny that the means test imposes a penalty on thrift but, while social service pensions in this country are financed as they are to-day, they can be paid only to those who need them, and for this purpose a means test is necessary. Every increase of pensions and every liberalization adds to the cost of abolishing the means test. Honorable members will probably be amazed to know that the cost of abolishing the means test for age, invalid and widows' pensions, on the new rates provided for in the bill, would reach the huge sum of nearly £98,000,000 per annum. I give the details in the following summary : - Some better solution of this problem must be found and, in this regard, the Government has not been idle. The Government believes that age pensions and some other benefits should be financed by means of a contributory scheme, under which these payments would be made as a right, without a means test. To-day, however, we are faced with such rapidly changing economic conditions that most of the traditional methods of financing social insurance require reexamination. It is plain that the payment of a certain weekly sum for a certain fixed pension at some future point in time can effectively deal with the problem only if the value of money remains constant. Unfortunately, world experience is that currency fluctuations, not stability, are the rule. Countries with schemes of social insurance are now considerably modifying those schemes and in some cases abandoning the previous basis. The work of evolving a contributory scheme that will stand the test of modern events is long and exacting. New ideas are flooding in, all requiring detailed examination. Officers of my department have for some time past been carrying out a very thorough and comprehensive review of all social services legislation with a view to the formulation of a plan which, if accepted by the Government, would place Australian social services on a new and much more satisfactory basis. Before concluding my remarks I wish to place on record the Government's thanks for the ready help and cooperation of the Parliamentary Draftsman and the Government Printer and their officers, and the officers of my own department, which have made it possible to produce this important bill in time for presentation to-night. Finally, I point out that the increases provided for will become payable on the first pension pay-day after the bill becomes law. There are 347,000 age pensioners, 70,000 invalid pensioners and 42,000 widow pensioners who will be looking forward to receiving their increased pensions. In conclusion, therefore, although I welcome any constructive criticism which honorable members may desire to offer, I ask the House to cooperate with the Government in giving the bill a speedy passage through the Parliament. Debate (on motion by **Mr. Clare** y) adjourned. {: .page-start } page 112 {:#debate-38} ### STATES GRANTS (SPECIAL FINANCIAL ASSISTANCE) BILL (No. 2) 1951. Message recommending appropriation reported. *In committee* (Consideration of Administrator's message) : Motion (by **Sir Arthur** Fadden) agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States. Resolution reported and adopted. *Ordered -* >That **Sir Arthur** Fadden and **Mr. Holt** do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Sir Arthur** Fadden, and read a first time. {:#subdebate-38-0} #### Second Reading {: #subdebate-38-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
Treasurer · McPherson · CP -- I move - >That thebillbe now read a second time. The purpose of this bill is to authorize the payment to the States of a grant which, together with the taxreimbursement grant payable in 1951-52 under the existing legislation, will bring the total payment to the States this year to £120,000,000. The precise amount payable to the States in 1951-52 under the tax reimbursement formula embodied in existing legislation will not be known until later this year. It is estimated, however, that the formula grant will be approximately £86,443,000. On that basis it is estimated that the grant now proposed, by way of special financial assistance to the States, will amount to £33,557,000. Last year an amount of £70,398,000 was paid to the States under the tax reimbursement formula. In addition, however, the States received two supplementary grants aggregating £20,000,000 which brought the total payment last year to £90,398,000. The first supplementary grant of £5,000,000 was decided upon following discussions with the Premiers in August, 1950, and the second supplementary grant, amountingto £15,000,000, was paid to the States later in the financial year under the States Grants (Special Financial Assistance) Act 1951. The latter grant was paid because of the effect of certain special factors on the State budgets - -particularly the increase of approximately £1 made by the Commonwealth Arbitration Court in the basic wage. At the conference of Commonwealth and State Ministers held last month all States emphasized the deterioration of their budgetary position resulting from rapidly rising wages and prices. It was obvious that the grant of approximately £86,443,000 payable to the States under the present formula would fall considerably short of meeting their reasonable needs. Accordingly, after considering all circumstances, the Premiers were informed that the Commonwealth would be prepared to supplement the formula grant by an amount sufficient to bring the total payment to £120,000,000 in 1951-52. This represents an increase of nearly £30,000,000 over the total payment made last year, and an increase of £33,557,000 over the amount which the tax reimbursement formula is expected to indicate this year. The grant of £86,443,000 payable to the States this year under the tax reimbursement formula will, of course, be distributed among the States in accordance with the provisions of existing legislation. The Premiers discussed at some length the manner in which the additional amount should be distributed among the States. Some Premiers favoured distribution of this additional amount according to the formula laid down in the existing tax reimbursement legislation, whilst others favoured distribution on a population basis. The method of distribution suggested by Commonwealth representatives and incorporated in the present bill represents a compromise between the two methods advocated by the Premiers. The total payments to be made to each State in 1951-52 as a result of the legislation now proposed, compared with the total payment made to each State last year, are as follows : - I commend the bill to honorable members. Debate (on motion by **Mr. Tom** Burke) adjourned. {: .page-start } page 113 {:#debate-39} ### STATES GRANTS BILL 1951 Message recommending appropriation reported. *In committee* (Consideration of Administrator's message) : Motion (by **Sir Arthur** Fadden) agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania. Resolution reported and adopted. *Ordered -* >That **Sir Arthur** Fadden and **Mr. Eric** J. Harrison do prepare and bring in a hill to' carry out the foregoing resolution. Bill presented by **Sir Arthur** Fadden, and read a first time. {:#subdebate-39-0} #### Second Reading {: #subdebate-39-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
Treasurer · McPherson · CP -- I move - >That the bill be now read a second time. This bill provides for the payment during the current financial year of special grants as follows: - The payment of these grants has been recommended by the Commonwealth Grants Commission in its eighteenth report, which was tabled to-day. In arriving at the grants recommended for payment this year, the Commonwealth Grants Commission has adhered to the general principle and methods followed in previous years. For many years the commission has based its recommendations on the principle of financial needs. This principle has been expressed by the commission in the following terms : - >Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of the other States. In applying this general principle to the calculation of the grants, the commission has, as in previous years, made a thorough analysis of the finances of all the States and has compared the budgets of the claimant States with the budgets' of the three non-claimant States. In making this comparison, the commission has taken account of any significant differences in the form and content of the States' budgets, and has also made adjustments to the assessed grants to allow for differences in the standards of revenue and expenditure of the claimant and non-claimant States. As in recent years, the commission has adopted a balanced budget standard as the startingpoint for its assessment of the grants. In its assessment of the grants, the commission has always relied on the audited budget results of the States. As these audited results are not available until some time after the close of each year, there is a time-lag of two years between the year on which the grants are assessed and the year in which the grants are paid. Thus, in the commission's eighteenth report the detailed assessment of the grants is based on the States' budget results in 1949-50. To meet this time-lag difficulty, the grants recommended by the commission in recent years have been divided into two parts. The first part of the grants is an adjusting payment which relates to the States' budget results in the year in which the grants are assessed, and the second part of the grants relates to the States' prospective needs for the year in which the grants are paid. In the commission's latest report, the first part of the grants recommended for payment this year represents the difference between the grants now assessed for 1949-50 and the advance payments made in that year. The first part of the grants amounts this year to £522,000. The second part of the grants recommended by the commission for payment in 1951-52 is based on an estimate of what the assessed grants may prove to be when the audited results for 1951-52 become available. This portion of the grants is treated by the commission as an advance payment that will be adjusted two years hence, when the assessed grants for 1951-52 are calculated finally. The second part of the grants amounts this year to £10,000,000. Therefore, the aggregate grant recommended by the commission for payment this year is £10,552,000 or £1,653,000 less than last year. It is important to remember that, in arriving at the special grants recommended for payment this year, the commission has taken account of the increased payments which the States expect to receive this year under the existing tax reimbursement legislation and the new legislation to provide the States with special financial assistance amounting to approximately £33,557,000. The shares of the claimant States in these increased payments in 1951-52 amount to £6,545,000. Therefore, the total net increase this year of the payments to the claimant States on account of the tax reimbursement grants, special financial assistance grants and special grants amounts to £4,892,000. Of this sum, South Australia will receive an additional £2,157,000, "Western Australia an additional £1,472,000, and Tasmania an additional £1,263,000. The special grants recommended by the Commonwealth Grants Commission each year have always been adopted by successive governments, and the present Government can see no reason why the recommendations contained in the Eighteenth Report should not be adopted this year. A limited number of copies of the report is held by the Clerk of the House, and further copies are expected from the Government Printer shortly. Debate (on motion by **Mr. Tom** Burke) adjourned. {: .page-start } page 114 {:#debate-40} ### LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1951 Message recommending appropriation reported. *In committee* (Consideration of Administrator's message) : Motion (by **Sir Arthur** Fadden) agreed to - >That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising and expending of a certain sum of money. Resolution reported and adopted. *Ordered -* >That **Sir Arthur** Fadden and **Mr. Kent** Hughes do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Sir Arthur** Fadden, and read a first time. {:#subdebate-40-0} #### Second Reading {: #subdebate-40-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
McPhersonTreasurer · CP -- I move - >That the bill be now read a second time. This bill seeks the Parliament's approval for raising and expending for war service land settlement purposes loan moneys totalling £4,125,000. The Loan Acts 1950 and 1951 authorized the raising and expending of loan moneys totalling £5,500,000 for war service land settlement. Actual expenditure to the 30th June, 1951, amounted to £3,862,000 leaving a balance of loan moneys available for war service land settlement expenditure at the beginning of the current financial year of £1,638,000. The present appropriation will provide loan moneys sufficient to meet estimated expenditure on war service land settlement of £4,125,000 in 1951-52. Thus it is proposed to carry the same balance forward at the end of the year to meet expenditure in the early months of the financialyear 1952-53. During 1951-52 an amount of £4,125,000 will, it is estimated, be paid to the States of South Australia, Western Australia and Tasmania as financial assistance for the settlement of exservicemen on the land. These States will use the money for acquiring, developing and improving land for subdivision into holdings for allotment to soldier settlers; also, for providing soldier settlers with working capital and finance for improvements and for the acquiring of stock, plant and equipment. In the States of New South Wales, Victoria and Queensland the State Governments concerned are responsible for providing capital moneys for these purposes. Financial assistance to all the States for non-capital expenditure on war service land settlement, including living allowances for settlers, writing down of the value of holdings, and interest and rent concessions, estimated to amount during 1951-52 to £1,600,000, will be paid by the Commonwealth from Consolidated Revenue Fund. Debate (on motion by **Mr. Hayden)** adjourned. {: .page-start } page 115 {:#debate-41} ### LOAN (HOUSING) BILL 1951 Message recommending appropriation reported. *In committee* (Consideration of Administrator's message) : Motion (by **Mr. Casey)** agreed to - >That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising of moneys tobe advanced to the States for the purposes of housing. Resolution reported and adapted. *Ordered -* >That **Mr. Casey** and **Mr. Kent** Hughes do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Mr. Casey,** and read a first time. {:#subdebate-41-0} #### Second Reading **Mr CASEY** (La Trobe- Minister for External Affairs) [9.40]. - I move - >That the bill be now read a second time. This bill seeks parliamentary authority for further loan raisings totalling £27,000,000 for the purpose of advances to the States under the Commonwealth and State Housing Agreement Act 1945.I introduce this measure in this House on behalf of the Minister for National Development **(Senator Spooner).** Over the last six years the yearly advances made by the Commonwealth to the States under the Commonwealth and State Housing Agreement have increased from about £6,750,000 to over £21,500,000. The precise figures are as follows : - During this same six-year period, the Parliament has approved for this purpose the raising of amounts totalling £95,000,000, leaving a balance of £10,538,000 available at the 30th June, 1951, to meet expenditure in the early months of the current financial year. The provision of £27,000,000 in this bill is designed to cover the programme for 1951-52 of £26,547,000, which was approved by the Loan Council in August last, and also to enable a balance to be carried forward at the end of June, 1952. The Commonwealth has agreed to meet the excess in the average cost of prefabricated houses imported by the States over the cost of comparable Australianbuilt houses, up to a maximum of £300 a house on 30,000 houses. The aid is limited to houses imported by the State housing authority and State public utilities. During the financial year 1950-51 approximately 3,000 prefabricated houses were imported by State authorities of which 2,066 will probably be the subject of claims for subsidy. Of these, 916 come under the Commonwealth and State Housing Agreement. It is anticipated that during the current financial year approximately 7,000 prefabricated houses subject to subsidy will be imported, of which probably some 5,000 will come under the housing agreement. Due to delays in negotiating contracts and other factors such as lack of shipping, the scheme for the importation of prefabricated houses has not so far yielded houses to the number that was anticipated. New SouthWales, Victoria, Queensland andWestern Australia are operating under the housing agreement. South Australia has not operated under the agreement. Tasmania withdrew from the agreement on the 31st August, 1950, and has since repaid all advances. To the end of June, 1951, 48,117 dwellings had been commenced under the agreement in the four States operating under the agreement; of these, 37,617 had been completed, leaving 10,500 under construction at the start of the current financial year. During the year ended the 30th June, 1951, 8,148 dwellings were completed. Of these 8,148, 3,069 or 37 per cent. were in country areas. Though rising building costs have caused the economic rents of recently completed houses to be higher than those of houses completed earlier, the provision of rent rebates has helped those persons who would face hardship in meeting their rents in full. Under the rent rebates scheme families whose incomes equal the basic wage do not have to pay more than one-fifth of their income in rent, whatever may be the economic rent of the dwelling they occupy. As the family income falls below the basic wage, or rises above it, the amount of rebate increases or decreases. Up to the 31st March last, the total of the rebates granted was £275,000. I believe that the general conditions under which houses under the Commonwealth and State Housing Agreement are allocated to applicants and the terras of leasehold, are well known to honorable members. Under the housing agreement any house may be sold to the tenant in occupation. It is Commonwealth policy to encourage sales, but it is the States that determine the basis of sale. Commonwealth approval is necessary only if a State desires to sell a house at below capital cost. To the 30th June, 1951, approximately 1,200 agreement dwellings had been sold to tenants, and none of these houses was sold below capital cost. Sales during the 1950-51 financial year totalled more than 750, a very much higher total than in any previous year. Debate (on motion by **Mr-. Allan** Eraser) adjourned. {: .page-start } page 116 {:#debate-42} ### SUPPLY BILL (No. 2) 1951-52 *In Committee of Supply:* Motion (by **Sir Arthur** Fadden) agreed to - >That there be granted to His Majesty for or towards defraying the service of theyear 1951-52 a sum not exceeding £68,060,000. Resolution reported and adopted. Resolution of Ways and Means, founded on Resolution of Supply, reported and adopted. *Ordered -* >That **Sir Arthur** Fadden and **Mr. Kent** Hughes do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Sir Arthur** Fadden, and read a first time. Secondreading. {: #debate-42-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
McPhersonTreasurer · CP -- I move - >That the bill be now read a second time. Supply Act (No. 1) 1951 made provision for requirements for the first four months of the financial year 1951-52. The purpose of this bill is to obtain supply for a further two months to carry on the necessary normal services of the Government, other than capital services. The amount to be appropriated is £68,060,000, which may be summarized under the following heads: - Until recently, it was the practice to base the provision in the Supply Bill on the appropriations of the previous year. Under present conditions, however, this course is impracticable. Salaries have increased progressively with the rise of the cost of living, and the higher cost of materials has also added considerably to the requirements of departments. In consonance with the procedure instituted last year, the amounts in the present bill therefore relate to the current needs of departments as shown in the Estimates Papers for1 951-52 which I tabled to-day. The amount of £35,690,000 for defence services provides for expenditure under the Government's defence policy, including current commitments in Korea and Malaya. Except for defence requirements and an amount of £2,000,000, which has been included to meet Australia's obligations under the Colombo Plan for the economic development of countries in South and South-East Asia, no provision is made in the bill for any new service. {: .speaker-BV8} ##### Mr Calwell: -- I ask the Treasurer for an assurance that the alteration of the practice to which he has referred relates only to salaries and materials as he has outlined, and that nothing more is being voted than would normally be voted under the old practice. {: .speaker-F4T} ##### Sir ARTHUR FADDEN: -- I give that assurance. Debate (on motion by **Mr. Calwell)** adjourned. {: .page-start } page 117 {:#debate-43} ### SUPPLY (WORKS AND SERVICES) BILL (No. 2) 1951-52 *In Committee of Supply:* Motion (by **Sir Arthur** Fadden) agreed to - >That there be granted to His Majesty for or towards defraying the service of the year 1951-52, for the purposes of Additions, New Works and Other Services involving Capital Expenditure, a sum not exceeding £28,031,000. Resolution reported and adopted. Resolution ofWays and Means, founded on Resolution of Supply, reported and adopted. *Ordered -* >That **Sir Arthur** Fadden and **Mr. Kent** Hughes do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Sir Arthur** Fadden, and read a first time. {:#subdebate-43-0} #### Second Reading {: #subdebate-43-0-s0 .speaker-F4T} ##### Sir ARTHUR FADDEN:
McPhersonTreasurer · CP -- I move - >That the bill be now read a second time. This bill provides for a further appropriation of £28,031,000 to enable Commonwealth works in progress at the 30th June, 1951, to be continued pending the passing of the budget by the Parliament. Among the major items for which appropriation is sought are £6,020,000 for the Postal Department, £3,164,000 for the Department of National Development, mainly for the Joint Coal Board and the Snowy Mountains hydro-electric project, £1,540,000 for civil aviation and £1,145,000 for Commonwealth railways. A sum of £12,500,000 is included in the bill for war service homes, representing one-half of the estimated requirements for the year 1951-52.. No allowance was made for this expenditure in the earlier Supply Act, as payments were then being met from Loan Fund. The loan appropriation which authorized expenditure for the early months of this financial year will, of course, not now be utilized. The bill provides for a further two months' expenditure on works, the figures being based approximately on the expenditure programme of £101,648,000 ineluded in the capital works Estimates for 1951-52, which are now before the Parliament. Together with the amounts provided in the Supply (Works and Services) Act (No. 1) 1951-52, this bill makes provision for the estimated requirements for six months of the current financial year. I might mention here, as I did in my budget speech, that the Government has given the closest scrutiny to all works programmes, and has made heavy reductions on the original departmental proposals to ensure that there will be no undue competition for scarce labour and materials. In accordance with the usual practice in seeking Supply, no provision has been made in this bill for any new service. Debate (on motion by **Mr. Calwell)** adjourned. {: .page-start } page 118 {:#debate-44} ### PAPERS The following papers were presented : - >Apple and Pear Organization Act - RegulationsStatutory Pules, 1951, No. 82. > >Australian Soldiers' Repatriation Act - Repatriation Commission - Report for year 1949--50. > >Broadcasting Act - Regulations - Statutory Rules 1951, No. 50. > >Canned Fruits Export Control Act - Regulations - Statutory Rules 1951, No. 49. > >Commonwealth Bank Act - > >Balance-sheets of Commonwealth Bank and Commonwealth Savings Bank as at 30th June, 1951; together with AuditorGeneral's reports thereon. > >Regulations - Statutory Rules 1951,. No. 42. > >Commonwealth Railways Act - By-law No. 89. > >Conciliation and Arbitration Act - Regulations - Statutory Rules 1951, No. 64. > >Customs Act - Regulations - Statutory Rules 1951, Nos. 71, 75. > >Customs Act and Commerce (Trade Descriptions) Act - Regulations - Statutory Rules 1951, Nos. 47, 48. > >Dairy Produce Export Charges Act - Regulations - Statutory Rules 1951, No. 60. > >Defence Act - Regulations - Statutory Rules 1951, No. 56. > >Defence Preparations Act - Regulations - Statutory Rules 1951, No. 84. > >Defence (Transitional Provisions) Act - National Security (Industrial Property) Regulations - Orders - Inventions and Designs (9). > >Regulations - Statutory Rules 1951, Nos. 45, 61, 68, 83. > >D i s till a ti on Act - R egu 1 ati on s - Statu tory Rules 1951, No. 80. > >Dried Fruits Export Control Act - Regulations - Statutory Rules 1951, No. 65. > >Egg Export Charges Act - Regulations - Statutory Rules 1951, No. 62. > >Excise Act - Regulations - Statutory Rules 1951, No. 81. > >Lands Acquisition Act - Land,&c., acquired for - > >Banking purposes - Mount Barker, Western Australia. > >Defence purposes - > >Bathurst, New South Wales. > >Bendigo, Victoria. > >Bohle River, Townsville, Queensland. > >Cooktown, Queensland. > >Dandenong, Victoria. > >Greenbank, Queensland. > >Pinjarra, Western Australia. > >Sale, Victoria. > >Schofields, New South Wales. > >Thursday Island, Queensland. > >Unley, South Australia. > >Department of Civil Aviation purposes - > >Bacchus Marsh, Victoria. > >Cleve, South Australia (Substitute Copy). > >Cunnamulla, Queensland. > >Eagle Farm, Queensland (2). > >Essendon, Victoria. > >Geraldton, Western Australia. > >Mangalore West, Victoria. > >Mascot, New South Wales. > >Monto, Queensland. > >Department of Trade and Customs purposes - Cottesloe, Western Australia. Immigration purposes - Belmont, New South Wales. Cabramatta, New South Wales. Dundas, New South Wales. Lithgow, New South Wales. Penrith, New South Wales. Postal purposes - Avoca, Victoria. Broadmeadow, New South Wales. Geelong, Victoria. Guyong, New South Wales. Hallett, South Australia. Keilor East, Victoria. Queanbeyan, New South Wales. Rosebud, Victoria. National Health Service Act - Regulations- StatutoryRules 1951, No. 63. Nationality and Citizenship Act - Regulations - Statutory Rules 1951, Nos. 46, 86. Naval Defence Act - Regulations - Statutory Rules 1951, Nos. 52, 53, 66, 76, 87. Navigation Act - Regulations - Statutory Rules 1951, No. 67. Northern Territory (Administration) Act - Ordinances - 1951 - No. 2 - Tuberculosis. No. 3. - Mining. No. 4 - Registration of Births, Deaths and Marriages. Regulations - 1951 - Nos. 3 and 4 (Darwin Administration Ordinance) . No. 5 (Alice Springs Administration Ordinance) . No. 6 (Apprentices Ordinance). Papua and New Guinea Act - Ordinances - 1951- No. 14 - Poor Persons' Legal Assistance. No. 15 - Supply (No. 1) 1951-52. No. 16 - Evidence (New Guinea). No. 17 - Port Moresby Water Supply. No. 18 - Insolvency (New Guinea). No. 19 - Amendments Incorporation. No. 20 - Superannuation (Papua and New Guinea). No. 21. - Liquor (Papua). No. 22 - Liquor (New Guinea). No. 23 - Adoption of Children. No. 24 - Deserted Wives and Children (New Guinea). No. 25 - Native Women's Protection. No. 26 - Forestry (Papua). No. 27 - Forestry (New Guinea). Patents Act - Regulations - Statutory Rules 1951, No. 51 Post and Telegraph Act - RegulationsStatutory Rules 1951, Nos. 72-74. Public Service Act - Appointments - Department - Air - K. J. Holmes, J. J. Thompson. Attorney-General - -J. W. Bates. Civil Aviation - W. E. Forty, R. N. Lake. Commerce and Agriculture - K. L. Kinsman, F. N. Robinson. Defence - D. T. Forsyth. External Affairs - R. R. Fernandez. Health - B. C. Bonner, E. J. R. Burton, A. A. Carson, E. Clement, R. H. Hook. Interior- J. P. McMahon. Postmaster-General - M. L. Allen, W. H Bloxham, N. C. Breddy, K. N. Brown, H. E. Coleman, N. D. Crew, M. H. Crisp, G. G. Gahan, J. B. Goodfellow, A. V. Helm, F. G. Keaney, R. W. Lawry, M. A. O'Grady, G. PageHanify, J. E. Rule, T. M. Sabine, A. G. Savage, E. F. W. Shuttleworth, J. F. Sinnatt, N. M. H. Smith, A. F. Weekes. Repatriation - J. Andrews, M. H. Boxhall, K. B. Burwood, E. L. Davey, M. E. Dennis, V. G. S. Desgrand, J. F. S. McKee, I. Miles, E. H. Sims, P. A. Tod, R. M. Withers. Social Services - J. E. Bayly, L. Taylor. Supply- W. D. Allan, R. S. Appleford, G. F. Auberson, J. H. Auld, L. Austin, K. Bailey, J. S. Baker, D. E. Baum, J. H. H. Beale, K. R. Bussell, J. P. Callinan, M. F. Carney, C. G. Carter, R. A. Coyle, K. A. Cross, J. S. Danger, N. S. Dempster, J. C. Ellis, L. H. Esmore, J. F. Finegan, A. T. Fowler, R. W. Gibbons, T. P. Gill, A. S. Goodin, G. Gourley, A. C. Gray, J. R. V. Groves, W. M. Harper, M. Hatherly, J. G. Hayes, A. F. Heather, G.E. Helme, E. H. Hirsch, T. A. Hood, J. F. Horwood, C. F. Howie, W. H. J. Jackson, V. J. Jenkin, G. Karoly, N. J. Kelly, W. B. Kenn, P. J. Knuckey, A. B. Kohn, Treasury - J. M. Reed. Works and Housing - J. G. Brownlow, G. E. Cox, M. J. Dabourne, J. E. Dale, E. W. Gooey,J. W. G. Haller, W. S. Macready-Bryan, K. R. McGeachin, E. M. Moore, A. C. Mudd, E. W. N. Oxlad, L. T. Ryan, T. W. G. Seefeld, K. G. Sweet, D. E. Watkins, G. R. Wraight. Regulations - Statutory Rules 1951, Nos. 77, 78. Quarantine Act - Regulations - Statutory Rules 1951, No. 79. Re-establishment and Employment ActRegulations - Statutory Rules 1951, No. 57. Repatriation Act - Regulations - Statutory Rules 1951, No. 58. Services Trust Funds Act - Regulations - Statutory Rules 1951, No. 54. Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinances - 1951 - No. 7 - Court of Petty Sessions. No. 8 - City Area Leases. No. 9 - Real Property. Regulations - 1951 - No. 2 (Advisory Council Ordinance,. No. 3 (Motor Traffic Ordinance). No. 4 (Canberra Community Hospital Ordinance) . Seat of Government (Administration) Act - Notice of variation of plan of lay-out of City of Canberra and its environs, dated 10th September, 1951. Superannuation Act - Regulations - Statutory Rules 1951, No. 59. War Services Estates Act - Regulations - Statutory Rules 1951, No. 55. Wool (Contributory Charge) Acts (No. 1) - Regulations - Statutory Rules 1951, No. 69. Wool (Contributory Charge) Acts (No. 2) - Regulations - Statutory Rules 1951, No. 70. Wool (Reserve Prices) Fund Act - Regulations - Statutory Rules 1951, No. 85. House adjourned at 9.58 p.m. {: .page-start } page 120 {:#debate-45} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-45-0} #### Commonwealth Boards {: #subdebate-45-0-s0 .speaker-N76} ##### Mr Menzies:
LP s. - On the 3rd July the honorable member for Yarra **(Mr. Keon)** asked the following question, *upon notice -* >What was the number of employees employed by departments, boards, commissions and authorities, respectively, at the 31st December, 1949, and the 31st May, 1951? I now inform the honorable member as follows : - >The total number of persons employed by the public authorities of the Commonwealth was 196,798 in December, 1949, and 208,707 in May, 1951. These include employees in services such as the post office, railways, air transport, constructional works, scientific research, munition factories, Ac, as well as those engaged in administration. The figures refer in the main to employees on the last pay roll of the months stated. The figure for May, 1951, as given above is subject to revision. Immigration. {: #subdebate-45-0-s1 .speaker-009MC} ##### Mr Holt:
LP t.- On the 11th July the honorable member for Parkes **(Mr. Haylen)** asked whether German workmen being brought to Australia by overseas firms for engagement on projects of national importance underwent the normal security screening. I now advise the honorable member as follows: - >Several overseas construction firms have been given approval to introduce foreign workers in Australia for employment on projects of national importance, such as housing, water conservation and the provision of electrical power. The workmen, which constitute the work force of these firms, have been brought from America, France, Germany, Holland, Italy and Austria, at the expense of the contracting firm. Before approval for their entry is given, each passes through the same degree of processing as to their suitability for immigration into Australia as does any other migrant. The honorable member, in his question, specifically mentioned German workmen and inferred that they were unscreened. This is entirely false. My Department of Immigration maintains a comprehensive organization in Germany, to which any workman selected by a firm contractingin Australia is presented for immigration processing. This processing entails minute security screening by trained Australian security officers posted in Germany for the purpose. These officers have complete access to the records held by the Allied Occupation Forces and work in collaboration with the. intelligence and security services of the occupation powers. Australian doctors medically examine each applicant against a stringent medical criteria and finally trained Australian selection officers assess the suitability of the migrant for Australia. This screening, I might add, is that imposed on former displaced persons from Germany, and with additional safeguards added since the present Government took office, is identical with that of the Labour Government's immigration programme, with which the honorable member for Parkes was connected. Workmen selected for such projects are admitted to Australia under exemption from the provisions of the Immigration Act for two years. At the expiration of that period consideration will be given to the question of their remaining in Australia, provided that during the period of their probation they have demonstrated by their conduct that they are suitable for settlement here. The Government has ample powers of deportation in the event of conduct indicating unsuitability for settlement in Australia. {:#subdebate-45-1} #### The Parliament {: #subdebate-45-1-s0 .speaker-6V4} ##### Mr Daly:
GRAYNDLER, NEW SOUTH WALES y asked the Prime Minister, *upon notice -* >How many times has the Government used the closure of the House of Representatives since the commencement of the first session of the present Parliament ? {: #subdebate-45-1-s1 .speaker-N76} ##### Mr Menzies:
LP -- The answer to the honorable member's question is as follows : - >During the course of the Nineteenth Parliament a great deal of the Government's legislative programme was delayed because of the obstruction of the Opposition. In the Twentieth Parliament it therefore became necessary for the Government to deal with an unusually heavy programme of urgent legislation. Because of the position into which the Government hadbeen forced, parliamentary debate had to be limited on a number of occasions, particularly in the case of certain financial legislation which was required to be passed before the end of the financial year. In adhering to the programme thus forced upon the Government, the closure of debate was moved 33 timesbetween the 12th June and the12th July, inclusive. {:#subdebate-45-2} #### Communism {: #subdebate-45-2-s0 .speaker-KX7} ##### Mr Ward: d asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. Has the Government in its possession information as to the membership of the Australian Communist party at the time the ban was imposed upon that organization in 1040 and at the time the ban was removed in 1942? 1. If so, will he make the information available? 2. Did *he, at the time the* ban was lifted in 1942, make any protest in Parliament at the action of the Labour Government? {: #subdebate-45-2-s1 .speaker-N76} ##### Mr Menzies:
LP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. Information in the possession of the Government indicates that during the period of strict enforcement of the ban on the Australian Communist party its membership fell sharply. Later when Russia entered the war as an ally, the ban was not strictly enforced so that it became possible to increase membership even though the Communist party was still nominally an illegal organization. The Communist party experienced great difficulty in combating indiscipline and desertion during the period of enforcement of the ban and has acknowledged its greater opportunities fbr growth under conditions of legality. 1. In June, 1940, when the Australian Communist party was banned, its membership was just over 4,000. In May, 1942, almost one year after Russia's entry into the war, its membership was approximately 7,200; In the latter part of 1942, enforcement of the illegality ban was such that the Communist party was able to conduct an open campaign to build up membership, resulting in a total strength of 16,000 in December, 1942, when the ban on the party was lifted. From this it can he seen that the increase in membership of the Communist party during the period June, 1940, to December, 1942, was made possible because of the relaxation of enforcement of the ban after Russia's entry into the war, this growth in numbers doubtless being due to the desire of many to acknowledge the part Russia was playing in the war. 2. No protest was made in Parliament at the lifting of the ban on the Communist party because the ban on the Communist party had for the previous eighteen monthsbeena nominal one only and the interests of Australia were at the time adequately safeguarded by defence powers then available to the Government. Moreover, the Communist party to suit its own purposes was not then, as it is now, working against the interests of Australia. With the entry of Russia iuto the war as an ally, the Australian Communist party changed its attitude to one of cooperation with the war effort and prior to the lifting of the ban officially gave certain assurances in relation to war production. Also with the lifting of the bun new regulations were issued in substitution making it an offence on the part of any one to advocate violence for the purpose of effectingany political measure whatever. {:#subdebate-45-3} #### Commonwealth Employees {: #subdebate-45-3-s0 .speaker-6V4} ##### Mr Daly: y asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. How many persons were employed by the Commonwealth at the (a) 31st December, 1949, and (b) most recent date for which figures are available? 1. How many persons have terminated their employment with the Commonwealth since the 10th December, 1949, either by resignation or other reasons? 2. What effective steps have been taken by the Government to implement the election promises given " to reduce the size of the Public Service." {: #subdebate-45-3-s1 .speaker-N76} ##### Mr Menzies:
LP -- The answers to the honorable member's questions are as follows : - 1.The total number of persons employed by the public authorities of the Commonwealth was 196,798 in December, 1949, and 208,707 in May, 1951. These include employees in services such as the Post Office, railways, air transport, constructional works, scientific research, munition factories, &c. as well as those engaged in administration. The figures refer in the main to employees on the last pay-roll of the months stated. {: type="1" start="2"} 0. No record is kept of the total number of separations from Commonwealth employment. The large number and high wastage of temporary employees makes the cost of such a record excessive. While exact figures are not yet available, approximately6,000 permanent officers terminated their employment from December, 1949, to May, 1951. 1. The Government in re-organizing the Commonwealth Public Service set up a Cabinet sub-committee and an advisory committee to review existing functions and organization of departments. On their recommendations a number of important changes to provide a more effective grouping of functions within the departmental structure has been made. In conjunction with the re-organization of functions the Government has decided to cut Commonwealth employment by 10,000 persons and departments have already examined staffs with a view to achieving this reduction. Action has also been token to eliminate overlapping between Commonwealth and State authorities. The Commonwealth Public Service Board at all times exercises strict supervision of new staffing proposals and the enlistment of additional staffs in departments. Departmental organization is continuously reviewed by the board's staff.

Cite as: Australia, House of Representatives, Debates, 26 September 1951, viewed 22 October 2017, <>.