House of Representatives
17 April 1958

22nd Parliament · 3rd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

page 975


Prime Minister · KOOYONG, VICTORIA · LP

– I have to announce to the House that I have asked the Minister for Supply and Minister for Defence Production to represent the Government at the inauguration of the Federal Parliament of the West Indies by Her Royal Highness, Princess Margaret. Mr. Townley is leaving Australia to-day. He will be abroad, quite briefly. During his absence, the Minister for Air will act as Minister for Supply and Minister for Defence Production, and will represent the Minister for National Development and the Minister for Shipping and Transport and Minister for Civil Aviation in this chamber.

page 975




– I desire to ask the Minister for External Affairs a question in relation to the preliminaries for the summit talks between the leaders of the East and West. Has the Minister any information to give to the House on this matter, particularly in relation to whether the Australian Government has made suggestions as to times or conditions, calculated either to accelerate or retard the holding of the talks themselves?

Minister for External Affairs · LP

– The situation is that highlevel diplomatic talks are to start in Moscow to-day, presumably preliminary to a Foreign Ministers’ meeting. I do not believe that Australia could’ influence this situation one way or the other. There is no need to press the West - the United Kingdoms the United States of America and France; in particular - in respect of the value, or the potential value, of holding a summit meeting. On countless occasions, these countries have expressed themselves as being in favour of a summit meeting, provided there is sufficient preparatory discussion to give hope that something good would come out o£ such a meeting- rather than something bid.

The western nations are extremely keen to reduce tension- in. the world. One has to assume that the Soviet Union is equally desirous to reduce tension. The question is how much, and what kind of, preparatory discussion should take place in order to ensure that, first, a Foreign. Ministers’ meeting, and then a summit meeting, could take place and succeed in reducing tension. The question is one of ensuring that the subjects to be discussed would be subjects on which there was at least some reasonable chance of agreement being reached. These preliminary talks, preparatory, one hopes, to a summit meeting, might be called, I suppose, a “ foothills meeting “.

I find it difficult to understand why Soviet Russia has, apparently, up to the present, been against these preparatory talks. The Soviet’s attitude is difficult to understand, because one has to credit Soviet Russia with a desire, L would hope, equal to that of the West, to reduce, tension in the world. If a summit meeting, were to take place without adequate preparatory discussions there would be: at. least, a considerable chance of a deadlock occurring with, at the end of the meeting, world tension perhaps even greater than it- is at present. I think that there is not very much- more to say about the situation. There is no point in Australia urging the West to do this or that- They are very well aware of the things that are necessary to be. done prior to a summit meeting.

page 975




– I ask the Minister for Immigration whether it is the intention of the Department of Immigration to close the migrant holding centre at Benalla. If this is not the intention of the department, will the Minister give some consideration to housing British immigrants there?

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– Matters pertaining to migrant hostels and holding- centres are reviewed from time to time and I am happy to tell the honorable member that there is no prospect, at present, of the Benalla holding centre Being closed down. I have every intention of seeing that it is maintained within the measurable foreseeable future. I shall certainly look into the honorable member’s suggestion that British immigrants should be accommodated there. This may involve one or two slight modifications or alterations to it, but I am fully appreciative of the need for a continual flow of immigrants to industries to be maintained. The honorable member may rest quite certain that I will do my best for him and for the very delightful town of Benalla in regard to this matter.

page 976




– I ask the Minister for Social Services whether, in view of the extreme hardship experienced by a great number of unemployed breadwinners today, he will extend the medical benefits scheme so that dependent wives and children of unemployed breadwinners may receive full medical benefits during the period of unemployment.

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– With very great respect to the honorable member, I think his question might have been more properly addressed to the Minister for Health. The question of giving assistance from time to time to relieve distress is constantly under the consideration of the Government. I have no doubt that the Minister for Health and the Government will take cognizance of what the honorable member has had to say.

page 976




– My questions are addressed to the Minister for Labour and National Service and are concerned with two waterfront incidents. The first deals with indemnity payments made by shipowners to the seamen’s union and other unions. Can the Minister say whether it is a fact that the Government, as reported, has been aware of these payments since 1952? The second question refers to the hold-up by the seamen’s union of the “ Abel Tasman “ in Sydney. Can the Minister give any information regarding the prospect of a crew being made available for this ship?


– No, it is not a fact that the Government has been aware of this practice of the so-called indemnity payments - or, as I have described them here before, extortion payments - being made since 1952. That, apparency, was a misunderstanding gathered by a section of the press from an answer I gave yesterday to a question on notice which was put to me askin? what payments had been made since 1952. Tn my reply T listed details of a number of payments amounting, in total, to a very considerable sum, but the information contained in the answer had been drawn by me, except as to the last episode, from the report which the Australian Council of Trade Unions’ own special committee of investigation into this matter had produced. Indeed, the matter first came under our notice when a statement was made by Mr. Justice Foster of the Commonwealth Conciliation and Arbitration Commission about April, 1957 - I am not quite certain as to the date. From that time onwards we have pursued inquiries as best we could, but I took the view from the outset that, in the first instance, it was for the trade union movement to make its own examinations and put its own house in order if that were possible- Subject to what occurred there, the Commonwealth Government would take such action as seemed to it to be desirable. In point of fact, the inquiry was made. Decisions have been taken by the Australian Council of Trade Unions which directed that this practice should cease and, to the best of my knowledge, the practice has ceased. There is, however, another aspect of this course of conduct on the part of the seamen’s union of Australia and others.

Dr Evatt:

– And the shipowners.


– Of course, the shipowners are involved so far as payments are concerned. I am not condoning their course of conduct in the matter. That is exemplified by the case mentioned by the honorable member of the “Abel Tasman “, which was brought out by other than an Australian crew, and has since been held up. My information is that the company which is to run this ship and which, think. is named “ H.C.S. Coasters Limited “, is in process of taking appropriate court action directed to the breach of the award which the facts would seem to suggest. The point that I should like to make, in conclusion, is that the Government does not go rushing into all these industrial episodes. It takes the view that the role of the Government is to provide remedies for parties who may be aggrieved and to try to provide opportunities for those parties to take such action as they themselves think proper. Where there is a deficiency of power, or where some emergency situation calls for government action, we do not hesitate to take it.


– Will the Minister for Labour and National Service look back into this matter and ascertain whether, as is my recollection from newspaper reports, this practice has not grown up over a very long period, supposedly on the ground, which is understandable, that Australian seamen and members of associated trade unions are, through action of the shipowners, deprived of employment over a certain period? I am not dealing with the merits of the case but with its history. Will the Minister try to find out what is the position, and will he inform the House whether it is as I have suggested?


– I think that I have already given the House a fairly detailed statement of the history of this matter. It is a fact that, at one point of time, Mr. Justice Foster gave an award which would have entitled Australian seamen to man ships purchased outside Australia and brought here or sold from Australia to send to the point of purchase. That award was subsequently challenged by representatives of the shipowners before the High Court on the ground that Mr. Justice Foster did not jurisdiction to make such an award, and the High Court upheld that contention. The legal position, therefore, is that no award exists which entitles Australian seamen to man these vessels. Undoubtedly, the decision has caused a great deal of resentment amongst seamen and the members of other maritime unions concerned. In that resentment and subsequent action they have received support from the Australian Council of Trade Unions. I refer, not to action to obtain indemnity payments, but to action of resistance. So there is a sense of grievance, undoubtedly, but in the sense that action taken by the unions constitutes a breach of existing awards, the remedies through the appropriate channels are open to people who have been aggrieved.

page 977




– I direct a question to the Minister for Health. I remind the Minister that some time ago I raised the subject of the Commercial Hospital and Medical Benefits Proprietary Limited with him, suggesting that many persons had complaints about the company, which operated from Canberra. I ask the Minister now whether he has had an opportunity to investigate the company’s activities. Has he had discussions with his colleague, the Attorney-General? If so, what are the results of those discussions?


– The honorable member has raised this subject in the House on several occasions. An investigation has been carried out by the AttorneyGeneral’s Department at the request of the Department of Health. I understand that action is now being taken to wind up this company, in pursuance of company legislation operative in the Australian Capital Territory.

page 977




– I ask the Minister for Primary Industry whether, in view of international discussions on territorial jurisdiction over the sea, the Government has taken any action to limit Japanese pearling activity in Australian waters this year. I refer particularly to Western Australia, where some limited Japanese activity was permitted last year by the Commonwealth.

Minister for Primary Industry · LOWE, NEW SOUTH WALES · LP

– 1 do not think the present discussions on the law of the sea have a great deal to do with the question of fishing by Japanese in Australian waters for mother-of-pearl. The Prime Minister has advised the Western Australian Premier that for this year, and on conservation grounds alone, fishing by Japanese for mother-of-pearl in the Western Australian division will not be permitted.

page 977




– I desire to ask the Minister for Immigration a question in relation to the restriction by his department of immigrants from European countries to dependent relatives and those engaged to be married to sponsors in Australia. Is it not possible, within the existing annual totals of immigrants from these countries, to allow non-dependent relatives to come to Australia, and to take special steps to clear up the long waiting list of relatives, dependent and otherwise, some of whom have waited many months for no more than a refusal of a visa to enter Australia?


– The problem mentioned bv the honorable member is under review and is exercising my consideration now. I remind the honorable member that if the immigration programme is going to continue - as I hope it will - and if it is going to succeed - as I am sure it will - we must proceed on the basis of a balanced immigration intake. This, by hypothesis, involves some limitation on the numbers of immigrants who can come in, especially from European countries. This in turn involves some restriction on dependants and those closely associated with them. However, I would like the honorable member to know that I and my department are well aware of these things. We sympathize with the predicament and disappointment of those who are already here and want to bring in persons closely associated with them. Perhaps if our own economic conditions improve, and if we are able later to expand the scheme, those persons who now complain will be able to come here and share in the greater prosperity and more satisfactory accommodation that we will be able to offer them in this land.

page 978




– Can the Minister for Primary Industry give to the House any information about negotiations or discussions concerning the new wheat stabilization plan?


– The negotiations for the new wheat stabilization plan are proceeding satisfactorily, and I think the Australian Wheat Growers Federation would agree that the negotiations are proceeding in a way satisfactory to it. Already, I have had discussions on this matter, and the Wheat Index Committee will meet, within the next week or so, a select committee of the Australian Wheat Growers Federation to receive evidence, and will then submit a report to me. I can say no more than that I personally think, and I am certain the responsible members of the federation think, that the proposals are proceeding according to plan.

page 978




– I direct a question to the Minister for Immigration. In view of the fact that one of the main reasons why disgruntled British immigrants return to their homeland is that they have been unable to find accommodation for their families in Australia, and the fact that this reacts unfavorably by discouraging other British people from coming to Australia, will the Minister request the Minister for National Development to confer with the housing Ministers of the various States with the object of accelerating the housing programme throughout Australia in order to provide homes not only for immigrants, but also for those thousands of Australians whose chances of obtaining decent homes seem to become worse every year?


– I am glad that my friend, the honorable member for Kingston, who has just returned from the other side of the world, is so interested in the problems of the Department of Immigration, especially in relation to immigrants from Britain. I will certainly confer with my colleague in another place about the points that the honorable member has raised. However, I would remind him that that part of the immigration programme which relates to British immigrants has, on the whole, been extraordinarily successful. There will, of course, always be a small minority of people who are disappointed or disgruntled for some reason or other, but I think that, in the broad, the picture of what has been accomplished since World War II., as presented by the immigration statistics, is a matter for praise rather than for censure.

page 978




– I ask the Minister for Primary Industry whether it is a fact that there has been a substantia] improvement in the United Kingdom market for Australian wines as a consequence of the Government’s advertising campaign. Will the Minister continue the efforts to expand overseas markets for Australian wines?


– There has been a considerable improvement in the sale of Australian wines overseas, and the Australian Wine Board, the Department of Trade, and the Department of Primary Industry, which are deeply interested in the advertising campaign, are determined that it shall be stepped up. We hope that this will further increase the sale of Australian wines overseas.

page 978




– Was the Prime Minister correctly reported a few days ago as having refused a request by the Leader of the Opposition to meet a deputation, comprising members of Parliament and representatives of the mining unions, the Australian Council of Trade Unions, Labour councils and local government, to discuss unemployment in industry and the effect of mechanization and automation on employment? If the report was correct, will the right honorable gentleman inform the House of the reason for his refusal? Would it be true to say that while the Prime Minister supports, and expects workers in industry to support, mechanization and automation in industry, he has no real sympathy with the workers being displaced from industry as a result of mechanization and automation? Does he not, on the other hand, favour the payment of the dole, while work of a national character, such as the construction of roads and harbours, could be carried out if finance were available?


– Order! The honorable gentleman will come to the end of. his question.


– In view of the mounting unemployment as a result of mechanization and increased production, will the Prime Minister reconsider his refusal to meet the deputation and arrange to discuss with it the problems arising from modern methods of production in industry?


– It is quite true that on 26th March-

Mr Griffiths:

– It is not a “DorothyDixer “, you know.


– It almost sounds like one. lt is quite true that on 26th March I had a letter from the Leader of the Opposition, the material portion of which is -

I have been asked by representative bodies and organizations closely and directly concerned (especially on the employment issue) to request yourself, as a matter of urgency, to receive a deputation with the object of having the Federal Government provide finance for works in and around the areas where unemployment resulting from mechanization is most evident.

I sent a reply, which I shall read. This will obviate the necessity for any further comment on my part. I wrote -

I have your letter of 26th March asking if I would receive a deputation, led by yourself, to discuss the unemployment problem that has arisen in connection with the dismissals at the Wallarah Colliery.

You have said that the deputation would urge the Commonwealth Government to provide special finance to New South Wales to enable additional public works to be undertaken in areas close to Catherine Hill Bay. The problem of local works is clearly one for the State and local authorities, and you will know that, while the Commonwealth has for some years been making special financial assistance available to the States for public works generally, it is for the individual States to decide for what purposes these funds are to be used.

At the recent Loan Council Meeting, in addition to confirming its support for an overall works programme of £200 million this financial year . . .

If I may interpolate - that had been agreed to be supported for six months. At the Loan Council meeting, it was extended to the whole of the twelve months.

  1. . The Commonwealth made a grant of £5 million to the States to assist their general financial position during the remaining four months of 1957-58. New South Wales has been allocated just on £2 million of this amount and in addition Local Government bodies in New South Wales have been given approval to raise an additional £1 million over this period. I expect that the Loan Council will meet again in late May or early June to review public works finances.

In these circumstances, I feel that no good purpose would be served by agreeing to receive the deputation. This is not to suggest that the Commonwealth is insensitive to the human problems involved in the displacement of the coal miners. We have a sympathetic understanding of these problems and as far as the Commonwealth is able, it gives practical assistance to the men and the families concerned. Through the Coal Industry Committee, and more particularly, the Re-employment Committee, we cooperate in measures designed to facilitate the re-employment of the men with a minimum of dislocation. Past experience has shown that ‘these efforts have achieved considerable success in dealing with these problems on the coal fields. There is no reason to expect that, with the cooperation of all concerned, they will be less successful on this occasion.

page 979




– Is the Minister for Immigration aware that allegations have been made by immigrants who were on the burnt-out immigrant ship “ Skaubryn “ and are now arriving in this country, that the ship’s lifeboats were in bad order and that a major tragedy was avoided only because the sea was very calm at the time? Arc these allegations correct? Are steps being taken to see that all immigrant ships are fully seaworthy?


– I have heard that some survivors have made allegations about the lifeboats on the “ Skaubryn “, but I am happy to tell the honorable member that the Department of Shipping and Transport makes regular and frequent checks of the safety appliances on all migrant ships coming to Australia. The honorable member may have read in the press from time to time how various alterations have been made to the safety appliances of ships, but not, of course, to the ill-fated “ Skaubryn “. As a matter of fact, on the last occasion that the “ Skaubryn “ was in Australia - towards the end of October, 1957 - her lifeboats were checked at Fremantle by a Marine Branch survey of the Department of Shipping and Transport, and they were pronounced to be quite satisfactory- The “ Skaubryn “ moreover, as honorable members may realize, was a comparatively modern ship. She was completed in Germany in 1952. Her safety appliances were approved in accordance with the International Convention for the Safety of Life at Sea, a convention that was only concluded in 1948.

I therefore suggest, Mr. Speaker, that these allegations that have been rather loosely made should be disregarded. The “ Skaubryn “ was probably as well equipped as any ship on the high seas. As a migrant vessel, she was probably as well fitted, with as many up-to-date appliances, as one could find in the trade. I am sure that honorable members will join with me in deploring the loss of so fine a vessel, but at the same time in being thankful that there was only one casualty, and that only indirectly as the result of the disaster.

page 980




– Can the Minister for Territories inform the House whether the Government has formulated any definite plans for the development, processing, and/ or sale of the bauxite ore contained in the bauxite deposits in the Northern Territory? Has the Minister knowledge of a statement made in the Northern Territory Legislative Council on Tuesday last by the Director of Mines to the effect that in one area alone the deposit of highgrade bauxite ore was 10 feet deep and covered an area of 20 square miles? I might add that this is only one of the many known deposits of bauxite in the north. Will the Minister give the House an assurance that this rich national asset will be developed by the Government in the interests of Australia in the same way as the rich uranium deposits of Rum Jungle have been developed?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I have no knowledge of the statement attributed to the Director of Mines in the Northern Territory, but I am quite sure that if he did make that statement, it would be based on accurate information. Undoubtedly, there are very rich bauxite deposits in the Northern Territory. With regard to the development of those deposits, legislation is at present being presented to the Legislative Council for the Northern Territory to provide for a form of mining development lease which would be appropriate to the mining of such deposits. Action consequential on the passing of that legislation will be announced in due course.

page 980




– I ask the Minister for Primary Industry a question concerning the wheat industry, but it is couched in terms different from those of the question just asked by the honorable member for Canning. Is the Minister aware that the introduction of legislation providing for a further five-year period of satisfactory stabilization of the Australian wheat industry is desirable? Does he know that the early introduction and approval of such legislation would do much to assure continued confidence in the industry and, incidentally, in this Government by the industry? Is it expected that the necessary legislation will be submitted to this Parliament for approval during the coming Budget session?


– I am well aware of the need to introduce wheat stabilization legislation as soon as practicable. I can give the honorable gentleman an affirmative answer to each of the three questions he asked. It is the desire of the Government to maintain the confidence of the wheat industry and of the growers themselves in their future prospects. I think, too, that I can give the honorable gentleman an assurance that unless there is some unforseeable difficulty, it will be possible to introduce the legislation during the Budget session.

page 981




– I wish to direct a question to the acting Minister for Supply. This is the first question that has been addressed to him in that capacity. Will he inform the House by how much the cost of the Maralinga Atomic Weapons Proving Ground has exceeded the original estimate of cost given to the United Kingdom and Australian Governments? Has he seen the report of the United Kingdom AuditorGeneral last month that the unexpected excess in the overall cost was 30 per cent, and in the largest single item, 80 per cent.? Whether or not he has seen this report, and whether or not he endorses these figures, will the Minister make a statement to the House, or will he table the relevant papers in the House, or make them available in the Parliamentary Library, so that honorable members can ascertain whether the planning and execution of this great defence establishment were of the same order of efficiency as was demonstrated by his department and its architects and contractors on the St. Mary’s filling factory?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– As to the first question, I cannot give the figures, as I am sure my honorable friend opposite will realize. As to the second question, I have not seen the report. In reply to the third question I certainly will not undertake, without knowing anything about the matter, to table any papers or to make any statement; but I will obtain for the honorable member as much information as I can on the subject, and I shall be glad to give it to him.

page 981




– I direct a question to the Minister for Primary Industry supplementary to a question that was asked yesterday by the honorable member for Corangamite. Will the Minister attempt to remove the chief cause of the very low prices which are being received for our butter in the United Kingdom by making representations to the United Kingdom Government in an endeavour to persuade it to modify the monstrously high direct subsidies which are paid to the United Kingdom dairying industry?


– Representations have already been made to the United Kingdom Government to ensure that Australian butter is sold on United Kingdom markets at satisfactory prices. 1 do not think it would be a practicable proposition to suggest to the United Kingdom Government that its policy of guaranteed prices to the dairying industry in the United Kingdom be varied, because there is an act in existence in the United Kingdom which guarantees the prices for a certain number of years; and I have grave doubts whether the United Kingdom Government would consider the repeal of, or changes in, that act.

page 981




– I bring to the attention of the Minister for Primary Industry the growing menace of noxious weeds to rural lands in Australia. Will the Minister take action in concert with the State governments to meet this threat to our pastoral lands? Further, will he make funds available and extend the services of Commonwealth agencies, such as the Commonwealth Scientific and Industrial Research Organization, in an all-out effort to eradicate prickly pear and serrated tussock, which have infested large areas of New South Wales? Finally, is the Minister aware that some land-owners have spent more money on prickly pear destruction than the original cost of their property, and are now in need of special aid?


– I have not heard ot the present menace of prickly pear or serrated tussock, but I am certain that the honorable gentleman knows this is a problem mainly for the State governments to handle, and I think they have adequate funds for the purpose. If there is a problem of scientific research, particularly for the Commonwealth Scientific and Industrial Research Organization, I suggest that he write to the State Minister for Agriculture in New South Wales and ask him to have the matter listed at the next meeting of the Australian Agricultural Council. I will ensure that it will receive adequate discussion. In reply to the last part of the question, I inform the honorable member that I am not aware of the possible amount of money that might have been spent in the eradication of these two noxious weeds. However, if he refers that point to the New South Wales Minister and the problem is as serious as he says, I am certain that it will be listed for discussion at the Agricultural Council.

page 982




– I direct my question to the Minister for Primary Industry. To what extent has soldier settlement in Australia, especially in Victoria, added to the volume of our dairy products over the last six or seven years? To what extent has this settlement been undertaken on farms that are too small to allow settlers to follow alternative forms of primary production, such as fat lamb raising or grazing?


– I cannot give the exact figures of increased production of butter due to war service land settlement in Victoria, but I will try to obtain them for the honorable member. I can say that while I have been Minister I have attempted, to encourage production of those commodities for which we are assured of the best markets and of the best prices. We have not deliberately encouraged the production of butter on war service land settlements. So far as the second part of the question is concerned, I inform the honorable member that in recent weeks I have discussed, with various State Ministers the need to ensure that the amount allotted under the. various war service land settlement schemes is sufficiently large to enable mixed farming, particularly the production of fat lambs and of grains, to be undertaken rather than that there should be a concentration on dairy production. I have been assured by the Governments, of both New South Wales and Victoria that their ideas coincide closely with my own.

page 982




– L desire to ask the Treasurer a- question. Is it a fact that it is the. Treasurer’s practice during public campaigns associated with the conversion of maturing- Commonwealth loans to make a special appeal to small investors to reinvest their savings? Is it a fact that for some time to come maturing loans will represent Commonwealth borrowings during the war years, almost solely for defence purposes? If so, in order to- assist small investors to make their decision as to whether they should convert their loan holdings, will the Treasurer arrange for the publication of a statement showing to what extent, as a result of inflation, their investments* made with patriotic motives, have deteriorated in real value since the original loan contribution was made? Finally, what guarantee is the Treasurer able to give to small investors, on behalf of the Government, that there will not be a further reduction in the real value of their investment if they follow his advice and convert their holdings into a new loan?


– As the honorable gentleman’s question is based on mischievous and unpatriotic premises, I have no intention of taking any notice of it.

page 982




– Can the Minister for Health inform me whether anything is being done to assist the States to meet the cost of mental hospitals? Is the Minister aware that many people admitted to mental institutions in the States- are not really suffering from mental disabilities but are suffering from debility arising from age and so on, and that by entering these institutions they lose their pension rights, with the result that the States- have to meet greatly increased expenses in caring for them? Previously, under the Chifley Government, a small payment was made, but this was discontinued a few years ago. I should- like to know whether anything is being done to assist in this direction.


– The very nature of the honorable gentleman’s questions adds force, I think, to the findings in the. Stoller report, which were that the paramount need, in dealing with patients in mental institutions was further capital expenditure. As a result of that report the Government has set aside a sum of £10,000,000, which is available under certain’, conditions, to be applied to the extension of building at mental’ institutions. This is. the1 paramount need’, and’ it is the one on which government expenditure is concentrated:

page 982


Bill received from the Senate and (on motion by Mr. Osborne) read a first time.

page 982



Mir. LUCOCK (Lyne) [11.17].- I move -

That the- subversionary tactics of the Communist party have become such a menace to the safety and security of Australia that no longer should they be allowed, the freedom to practise their tactics, taking advantage of a tolerance and privilege which is basic to our democratic way of life to undermine that way of life for their own evil purposes. Therefore, in the opinion of this House, early action should’ be taken with a view to submitting again to the electors Constitution alteration proposals empowering the Parliament to make laws with respect to the outlawing of communism.

I appreciate that since I gave notice of this, motion the tactics used, by members of the Opposition to delay a debate have rendered the last part of the motion, asking for early action against communism, impracticable of fulfilment because we face an election later this year. But I believe that basically, the action against communism proposed, in the motion must be taken for the sake of the nation’s security.

It has been suggested that the danger of communism has passed, or is not quite so great as it was. 1 suggest to the House and to the country that, because of events both here and abroad in recent months, the danger of communism is even- greater now than it was when I put my motion on the notice-paper.

I do not want my motion, or my remarks on it, to be taken as an attack on the Labour party as such.. I appreciate that there are members of the Opposition, and members of the Labour party generally,, who are as much opposed to communism as. are honorable members on this: side, of the House. I heard the honorable member for Darebin (Mr. R. W. Holt), say, “Hypocrisy” or “ Insincerity “. He- should know more about either of those than any other member of the. House.

Having had some association with the honorable member for Scullin (Mr. Peters) -during a trip to the United States, I can appreciate his antagonism towards, and dislike of, communism. I know that the honorable .member for .Melbourne (Mr. Calwell) also has that same hatred of communism; but I feel that there are certain members of the Opposition who, wittingly or unwittingly, are doing the work of the Communists and of communism in destroying the safety and security of this country. That remark produces interjections from the Opposition side, and I am asked who these honorable members are. If honor able members will listen for a little they will- hear that question answered in the course of my remarks.

One of the main reasons why I submitted this motion is that I believe communism is a danger to this country at the moment. It is a three-fold danger. First of all, it is a danger to the Labour party itself. In this democratic system of ours a strong Opposition is necessary. In our form of government a strong and dynamic Labour party on the Opposition benches is necesBary for the progress and development of the nation. So I believe that the infiltration of the Labour party by communism is something which is not only dangerous to the Labour party itself, but is dangerous to the country also, because of its total, overall effect on our domestic position. It goes even further than that. It goes into a third sphere, the sphere of international affairs, in which we in Australia are now playing a very important part. For that very reason I think that this House and the people of Australia should be made conscious of the danger, the threat, of communism to our safety and security.

One of the arguments put forward by many people who oppose the taking of action against communism is that the immediate result would be a witch hunt. In that regard I should like to read to the House from a> review of a book by Mr. Edgar Hoover, the director of the United States Federal Bureau of Investigation, a top-ranking man in American security. The title of the book is “ Masters of Deceit”. The first passage from the review which I wish to quote reads - . . Hoover lists the outward marks of a Communist front,, the devices by which prominent persons are trapped into lending their names to Communist-backed movements and the ways in which ordinary people can assist the F.B.I, by reporting suspicious activities. (In this latter connection Hoover emphasizes: “ Hysteria, witch hunts, and. vigilantes weaken our internal security . . We must be absolutely certain that our fight is waged with full regard for . . . historic liberties.”)

Through the mass of facts that make up “ Masters of Deceit “, Hoover again and again hammers, at two main themes: (1) That the Communist Party, however numerically small and ineffectual it may appear to-day, still poses a real threat to the American form of government and way of life; (2) that the present leadership of the Kremlin, however it may talk now, is committed on past statements and past performance to achieving a Communist world.

I believe that that statement by Edgar Hoover is perfectly true. Those who contend that, the moment we take any action against communism, we are in danger of witch hunts and hysteria, are using the very argument that the Communists themselves would use to prevent action being taken against them. If we so lack regard for our traditions of liberty and for the security of this country that we cannot have legislation to deal with the Communists without also affecting the domestic lives of people who are not linked with communism we do not deserve to have our freedom and our liberty.

Another argument put forward by members of the Opposition against the taking of action against the Communists is that such action would also prove to be action taken to destroy the trade unions. To counter that argument I shall quote to the House from the report of a statement made by a New Zealand Labour leader, Mr. Walsh, who visited Australia last year. The report, which appeared in a newspaper on 26th March, 1957, reads -

Australian trade unions were warned to-day of the danger of collaboration with Communists.

Visiting New Zealand Labour leader, F. P. Walsh, said the union movement could lose the respect of decent minded Australians and destroy itself.

That statement did not come from anybody on the Government side of the House. It was made by a man who is a friend and supporter of members of the Opposition in this House. The report continues -

Mr. Walsh is president of the New Zealand Federation of Labour and a member of the International Confederation of Free Trade Unions.

The Confederation has directed its affiliate unions throughout the world not to exchange views with Iron Curtain unions.

Mr. Walsh said that I.C.F.T.U. unions in Australia, still fraternising with Red country unions, were in the same category as unionists who persisted in striking after their union leaders had directed them not to do so.

Australian unions so collaborating, he said, were out of step with unions in the western world. “ The so-called ‘ unions ‘ in the iron curtain countries,” he said, “ are not unions at all but appendages of the State. “ Their leaders cannot do anything for the workers, because if they attempted to do so, they would be liquidated. Therefore, to fraternise with these bodies is merely to give them a build-up of trade union status which they do not possess.”

We fear that a position is developing to-day within the Australian Labour movement which may result in a greater affiliation with these iron curtain Communist countries, and that can be dangerous to this land. There, again, is proof that any action which is taken against Communists in this country is not an action taken with the idea to destroy trade unions but to strengthen them and allow them really to play their part in the domestic affairs of this country. Let me give a further quotation of what is happening within the trade unions of Australia. This is not a statement made by members on the Government side but one which appeared in the Sydney “ Bulletin “, a journal which has made an investigation of the situation. If members of the Opposition can disprove the truth of this statement, 1 shall be happy to hear them do so. It is as follows -

With the accelerating decline in the ideals of the Labour party and the infiltration into its platform by Communist expediency, the march towards tyranny - towards the Communist ideal of the dictatorship of the proletariat by juntas - goes on in Australia at a great rate.

The advance is insidious and steady. The grand ideals of Labour - the White Australia Policy, the ideal of a fair day’s work for a fair day’s pay, of equal opportunity and scrupulous regard for freedom of opinion and religion - are rapidly disappearing. Lip service is given to them only as a cloak under which to insert the knife in the body of everything on which the constitutionality of the British and Australian systems of Government rest.

Under the influence of the linked caucus and outside A.L.P. junta, Parliament, when Labour is in power, no longer makes its own decisions.

I interpolate here that we have seen that happen, or have been made aware of the danger of it, in the light of a recent statement by the Leader of the Opposition. There is a danger that if a summit conference is held, Mr. Healy, a very prominent Communist member within the Labour movement, will have a large say in the policy of the Australian Labour party in respect of such a conference. The article continues -

The caucus view is in turn dictated to it mainly by the A.L.P. Federal Executive, which again in turn must watch its step so as not to offend or get too far away from the line of the big Communist unions which dictate its policies, to a large extent, through finance.

Freedom to think and act politically is firmly discouraged by most unions. Every member in most of the key unions is expected to be a “ Labor “ man or a Communist in practice, whatever his principles; to subscribe money to support the Labor party, even though he be a Liberal. Within the past few weeks there has been the spectacle of a mob jostling and forcing into unemployment two Tasmanians who refuse to sub- -scribe to a political body for which a Communistrun union has made an entirely illegal levy for the a.l.p. lt is significant that there have been no cries of outrage from the Leader of the Federal Opposition, that paladin of the Four Freedoms, at these goings-on; no word of reproof from the A.L.P. executives, or the A.C.T.U. Let the victims support Labour or starve. It is the theory of the class-war that any man who does not yield to the domination of the brutal juntas who dictate the expediencies of the moment shall be outcast.

All these things are symptomatic of the times in the A.L.P. It is drifting every day nearer to the ideals of “ democracy “ practised in the Kremlin and farther away from the concepts on which the Australian ways of life and government are built.

One of the factors we are faced with at the moment is this insidious working within the Labour movement by the Communists which will ultimately destroy the very basic principles and the strength of the Labour party.


– To love one’s enemy does not mean that one has to go with his enemy into those things which are opposed to the principles on which one stands. In this regard 1 suggest that it is a three-pronged danger. Communist activity is a danger to the Labour party because it is destroying this once strong and vital body in the politics of our nation. The second danger is its effect on our country; and, thirdly, it is a danger because of things that happen outside our country.

When I began my speech I was asked to name any members of the Opposition who were wittingly or unwittingly - and I leave that to the consciences of members of the Opposition and to the opinion of the public - assisting the Communists in their propaganda and their proposals. Some time ago the notorious Communist journalist, Lockwood, whom we know, of course, as the author of “ Document J “ and who was defended by Communists and by Dr. Evatt at the Royal Commisssion on Espionage in Australia, wrote a lying article about the Hungarian revolt which appeared in the Communist newspaper “ Guardian “ on 22nd November, 1956. He asserted -

The imperialists were faced by setback in the Middle East that could have brought a turning point in history and speedy doom of the colonial system, so they had to open a diversionary second front in the most convenient area, which appeared to them as Hungary.

When this signal for attack was given, American arms appeared in generous supply. Fascist emigres subsidised and aimed by Allan Dulles Central Intelligence Agency were recruited from western Europe and strategically placed in Austria. The Hungarian Government revealed that there had been a “ mass massacre “ of militant workers and progressive peasants. The Red Army under Socialist principles had no choice but to respond to the Hungarian Government’s appeal for aid to suppress the fascist putchists and prevent further massacre of workers.

That is a terrible statement; but worse than that is the fact that when addressing students at the Melbourne University on 11th November, 1956, the honorable member for Yarra (Mr. Cairns) parroted Lockwood’s spate of lies about the Hungarian workers’ revolt against communism, and, in accordance with the Communist party line, said -

To a very large extent the Hungarian rising was a fascist uprising with some mass support. The Hungarian situation should not be exaggerated; the Hungarians were an excitable violent people who had become accustomed to killing each other through the course of their history.

The honorable member for Yarra implied that we should not worry about what happened in Hungary. What a statement from a responsible member of this House! He said, in effect, that Hungarians were an excitable people, used to killing each other and that we should not exaggerate the event that had taken place. Let me contrast the statements of Rupert Lockwood and the honorable member for Yarra with a statement by James Michener, who investigated the Hungarian situation. He wrote -

In Hungary Russian communism showed its true character to the world. With a ferocity and barbarism unmatched in recent history, it ruthlessly destroyed a defenceless population.

After what the Russians did, after their destruction of a magnificent city, after their slaughter of fellow Communists, the world can no longer have the slimmest doubt as to what Russia’s intentions are. The people in the satellite nations and in the uncommitted countries now know that Soviet Russia is their mortal enemy. For Hungary has laid bare the great Russian lie.

As I have said, evidence has been presented to the United Nations Assembly which conclusively proves the falsity of the statement that it was a fascist uprising within Hungary. That uprising resulted in the brutal murder and massacre of innocent people and the butchering of little children. Yet, the honorable member for Yarra dismisses the matter with the irresponsible statement that the Hungarians are an excitable people, that we should not exaggerate the position and, literally, we should not worry about it. There, is one answer to the question, which I was asked when I began my speech, whether I could indicate any members of the Opposition, who, wittingly or unwittingly, are helping the Communists.

The other evening the Leader of the Opposition said that the South-East Asia Treaty Organization was a purely militaristic body. When he was asked to name one occasion on which that organization had been used as a military force, he was unable to do so, because it has not been so used. A report which I have received recently in regard to the Seato seminar on communism proves conclusively that Seato is an organization which has been created for the defence of its member nations against this insidious evil which is trying to break through - the evil of communism. The introduction to this report concerning the seminar states -

The objectives of the seminar were to assist in the general Seato effort to detect and expose Communist techniques and activities; and to provide a forum for the exchange of information and views on effective counter-measures.

In the opening address, Carlos P. Garcia, President of the Republic of the Philippines said -

It gives me profound pleasure to address this Seato Seminar on Countering Communist Subversion - the first international seminar of its kind to be held in this area. I understand that the delegations now present are composed not only of security experts in the military field, but also of civic and political leaders who have been handpicked to represent their respective countries in this seminar. This is significant and noteworthy, because it underscores the growing appreciation by the various Treaty member nations of the complex nature of the Communist threat and of the correspondingly varied measures that must be undertaken to counter that threat.

Australia is making its contribution to the work of Seato in the economic sphere. We are making our contribution under the Colombo Plan. We have been making and are constantly making contributions to assist in the uplift of the people in Asia and elsewhere. We are not merely opposing communism in a militaristic sense, but by all means that we have. Yet, in the face of all these things which are constantly proving how incorrect is the Leader of the Opposition, he still stands up and says that our measures are purely and simply militaristic and purely and simply designed to oppose. That is the Communist line and wittingly or unwittingly members of the Opposition are using it.

On a number of occasions in this House members of the Opposition have stood up and talked about freedom. They have said that we cannot take action against Communists in the way in which some of us would desire because we would be attacking the freedom of the individual. Let me cite certain actions that have been taken in this country. I cited earlier the case of the two men on the waterfront who refused to pay what they considered to be an illegal contribution and I mentioned the action that was taken against them. Members of the Opposition have said that they should have paid the contribution, anyhow. All right. Let me read a report in regard to another man on the Tasmanian waterfront who paid the contribution. The report reads as follows: -

The name is James Colrain. He is a member of the Waterside Workers’ Federation and a personal friend of the Hurseys. Of Scottish descent, his father was for many years an official of the Miners’ Union in Ayrshire, Scotland, who on at least one occasion represented his fellow unionists at a National Conference of that union in London. He had an honorable record of military service in World War I. and died in Tasmania a short time ago. We mention this to make it perfectly clear that no one can impugn the trade union background of Jim Colrain.

Colrain is being victimized constantly on the Hobart waterfront by the same gang of Communist bullies as are attacking the Hurseys, because he is a personal friend of the Hurseys. Colrain actually paid the levy which the Hurseys refuse to pay as a matter of conscience. He is therefore a member of the Federation in good standing who, if he were ready to “ rat “ on his friends, could keep out of trouble. However, he regards it as a matter of honor that he should stand by personal friends even though he himself is of different political conviction.

Then it goes on to relate a series of happenings. It may be said that these things are exaggerated. It may be said that they are the figments of a person’s imagination. But they have happened, and they have been caused to happen by the people whom members of the Opposition support; by people of whom the Opposition says, “ They are entitled to their own political philosophy “. Yet, on the same hand, members of the Opposition stand up in this House and talk about the rights and freedom of every individual. The other day, the honorable member for Werriwa (Mr. Whitlam), in speaking about unemployment, talked about the right of every person to work if he so desired. Can he reconcile that statement with the fact that, because of their refusal to pay this levy, these men have been denied their rights and their freedom? The honorable member cannot have it both ways. He cannot, on the one hand, when it suits him, demand the right of everyone to work and, on the other hand, again when it suits him, say that these people cannot be allowed to work because they have not made their contribution to this particular political party.


– Can you preserve freedom by destroying it?


– That is fallacious reasoning. 1 am free, too, but my freedom is restricted by the freedom of the man who lives next door. I am not free to destroy his motor car. I am not free to throw a brick through the window of his house. I am not free to destroy his garden. Our freedom is limited by the law and by the freedom of other people. In exactly the same way in this matter, the freedom of these people to hold their political beliefs must be safeguarded with regard to the freedom of other people.

Members of the Opposition come into this House and talk about freedom yet I think it has been proved in many cases that, when it suits them, they do not give effect to this principle. So we have this danger, this threat, to our safety and security. Are we going to give freedom to Communists so that they may destroy the safety and security of this country? This is not something that is purely theoretical. It is a direct danger to this country.

I pointed out in a speech to this House on Tuesday that the percentage of Communists in Indonesia was small. Yet those Communists are able to dictate a policy! The percentage of Communists in Russia - possibly an unknown factor - is estimated by experts to be about. 3 per cent, or 4 per cent. Yet they are in control of that country! Hitler rose to power in Germany with the support of only 4i per cent, of the population. The other 95i per cent, were against him, but not actively against him. Because they did not oppose him they allowed the minority to take over. In any country an organized minority can defeat a disorganized majority on any occasion. That is what has happened.

Mr Curtin:

– The Australian Country party is doing that now.


– I believe that within the Labour party a minority is ruling ruthlessly against those who have a desire to see decency and sanity brought back to the Labour party.

Members of the Opposition have mentioned loving one’s enemies. May I quote Admiral Radford, who said -

To-day the Christian world is menaced by a satanic force, which denies and seeks to destroy all that we Christians hold important. Communism is a direct denial of Christ and His Church, more than that, it seeks complete domination of the free world, through capturing the hearts and minds of its youth.

That statement was not made by a clergyman but by a man who has had experience in war; a man who has been prepared to fight in the defence of his country. So, if we face up to the reality of this situation we find that we are menaced by a satanic force which denies and seeks to destroy all that we hold dear, all that we hold important, and all that we hold valuable in our lives. Abraham Lincoln said -

To sin by silence when they should protest, makes cowards of men.

I believe that we should not sin by silence. If we believe that this thing is evil, if we believe it is opposed to all the decencies of our life, then we should not be silent. We should stand up and speak out against it. It is against all the basic principles of our life and being. We have had men and women who have been prepared to die for the safety and security and freedom of this land. In this House, in this year of 1958, we must show that we can carry on from that which they passed on to us, stand firm for those beliefs, and fight in days of peace just as strongly and with the same degree of tenacity of purpose as they did in days of war.


– Is the motion seconded?

Mr Anderson:

– I formally second the motion, and I reserve the right to speak later.


– If the speech of the honorable member for Lyne (Mr. Lucock) was intended as a political atom bomb, it failed in its purpose. I do not think that this House has ever before listened with such high hopes that were destined to be dashed to the ground so quickly. The speech was a political squib. There was nothing in it to cause any concern to honorable members. It was merely a rehash of the same old stuff that has been served up over the years. It contained the smear and the snarl, but it certainly had nothing new in it.

The motion itself lacks three important ingredients. It is devoid of literary merit, of historic fact and of philosophic worth. It is something that has been cooked up to serve some purpose other than the purpose of destroying communism. The honorable member said that the Opposition had prevented him from bringing the matter to the attention of this House since he first tabled the motion. He tabled it on 4th April, 1957. The Government itself was not prepared to give him time to bring the matter forward until some few weeks ago. We did then use certain delaying tactics, but that was only three or four weeks ago. The Government was so little interested in the motion that for nearly twelve months it treated it with the contempt that it deserves.

The honorable member spoke about the approaching elections, and I think he spoke more in the personal than in the national interest. He knows that the former leader of his party is to retire from politics, and his motion is merely a political stunt to propel himself into the Ministry. He is the new champion of anti-communism. He is trying to outdo even the honorable member for Mackellar (Mr. Wentworth), and his apprentice, the honorable member for Moreton (Mr. Killen). He is the new leader of the advocates of anti-communism. Of course, as the vacancy in the Cabinet will be filled by an Australian Country party member, neither of the other two gentlemen whom I have mentioned need apply.

The honorable member for Lyne spoke about the necessity to have a strong and virile Labour party in this Parliament. We need no compliments and no condescension from any one. We are not like the Australian Country party, looking around for some other party behind which it can tag along in order that its members can gain ministerial posts and important positions.

What the honorable gentleman was doing was lecturing the Government. (Government supporters interjecting) -


– Order!


– The cackle of morons,. Mr. Deputy Speaker, was ever the obbligato to progress. The lecture that the honorable gentleman delivered was intended for the Ministry, and, if he is right, this Government is nothing but a bunch of flabby, lethargic, pleasure-loving persons who shirk their responsibility even to the point of encouraging Communists and Communist subversion. Of course, it is a long time since the referendum proposals with regard to communism were defeated in 1951. The Government has had seven years in which to bring further proposals forward, but it has evidently felt that they should not be brought forward. The Government would have less chance of success with such a referendum now than it had in 1951. Let me remind the House of the terms of the referendum proposals. It was proposed that the Constitution should be amended by the addition of the following provisions: - 51a. - . . . (2.) In addition to all other powers conferred on the Parliament by this Constitution and without limiting any such power, the Parliament shall have power -

  1. to make a law in the terms of the Communist Party Dissolution Act, 1950 -

    1. without alteration; or
    2. with alterations, being alterations with respect to a matter dealt with by that Act or with respect to some other matter with respect to which the Parliament has power to make laws;
  2. to make laws amending the law made under the last preceding paragraph, but so that any such amendment is with respect to a matter dealt with by that law or with respect to some other matter with respect to which the Parliament has power to make laws; and
  3. to repeal a law made under either of the last two preceding paragraphs.

(3.) .

There could have been no appeal to the High Court, such as is available now, if those provisions had been written into the Constitution. Any person could have been condemned, and any association declared an unlawful association could not have been supported by any citizen.

During the course of the referendum campaign some honorable members opposite condemned, as the honorable member for Lyne has condemned to-day, persons who are not Communists but who exercise their right and their responsibility to make their views clear on various matters. I well remember the former Minister for Supply, who is now our Ambassador to Washington, attacking Bishop Burgmann, Bishop Moyes and Dean Babbage, all of the Church of England. I have a record of what the former Minister said at that time. Amongst other things, he accused Bishop Burgmann of uttering sentiments that encouraged communism. I pointed out at the time that if the Constitution was altered according to the referendum proposals, Bishop Burgmann could be declared a Communist, and two honorable members of this Parliament, both on the Government side, said, “ So he is! “

Dr Evatt:

– Who are they?


– They are not here any longer, and I do not propose to make any further reference to that aspect of the matter. We were then passing through a certain period of history when feeling ran high and emotions were deeply stirred. Let us go back to the days of sanity, to the time when people told the truth about these matters. There was a time when the present Prime Minister (Mr. Menzies) said very clearly that he would not suppress any political party in this country nor try to suppress any idea by legislation. He even went further. In 1945 he told a meeting of students of the Sydney University, “ If I had to choose between fascism and communism - I pray I never shall - I would choose communism “. I have a photostat copy of the report of that speech which appeared in the Brisbane “ Telegraph “ on 15th May, 1945, and I am quoting to-day from “ The Worker “ published in Brisbane on 23rd July, 1951.

Let us now consider the position in America. We have heard from the mover of the motion about the opinions of Mr. J. Edgar Hoover, chief of the Federal Bureau of Investigation in the United States of America. Let me quote some opposite views. It was President Truman who said that he would not turn America into a rightwing totalitarian country to deal with a left-wing totalitarian threat. The present Secretary of State in the United States, Mr.

John Foster Dulles, went on record on 12th October, 1953, as saying - and his remarks were reported in the Australian press - that the Eisenhower Administration would never turn the United States into a material fortress in which freedom of thought was suppressed. Mr. Dulles declared that the United States should not assume the likeness of communism in fighting the Communist menace. That, of course, accords with the whole of our traditions of freedom of speech, freedom of expression and freedom of thought. We of the Australian Labour party would not tolerate any Communist threat, or a threat by Fascists or anybody else, to the security of our nation. Anybody who offends against the law should be dealt with according to the law, and any person who acts traitorously or subversively towards the country should be dealt with.

If what the honorable member for Lyne has said is true, and the Australian Communist party has become such a menace that it can no longer be allowed freedom to pursue its tactics, it is the Government and not the Opposition that stands on trial. If only half of what the honorable gentleman has said is true, then it is the Menzies Government that is letting Australia down. The United States Congress, only recently, passed a measure to facilitate the exchange of persons at all levels between the United States of America and Russia, including cultural and trade union representation. In Britain, of course, there has never been any question about where the United Kingdom Parliament stands on this matter. If what the honorable member for Lyne has said about the activities of Communists within the British Commonwealth of Nations is true, Mr. Harold Macmillan must be a fellow traveller of the Communists. As the Conservative Prime Minister of the United Kingdom, he must be failing in his duty. But nobody says that about the United Kingdom Prime Minister or about the Leader of the Opposition in the United Kingdom Parliament. It is only in this country that we have had this annoying nonsensical stuff poured forth over the years since the Australian Country party thought that it was a politically profitable issue to raise as an election stunt. I remember a speech made by Mr. Hollway, a former Premier of Victoria. He was one of those who climbed on the bandwagon in 1949. He is reported in the issue of the Melbourne “.Sun “ of 2nd December, 1949, in the following terms -

I’.ve gen the Corns, on the Tun, and when we get a man with Mr. Menzies’s guts at Canberra we’ll keep them on the run.

According to the honorable member for Lyne, the Communists are not yet on the run; it is his own Government that is on the run. The honorable gentleman has raised this issue .again because an election is approaching. We shall always hear communism discussed before elections. We shall never hear anything about it between elections because our opponents have no real policy for anything else. The Prime Minister was reported in the “Sydney Morning Herald “ of 7th May, 1954 - it was on the occasion of an election campaign - in these terms, referring to a meeting that he had addressed in Brisbane the previous evening -

The Prime Minister, Mr. Menzies, said to-night that he would go to the people again if necessary for powers to deal with Communism.

He forgot all about it after he had made his speech. Nearly four years have passed since then, and the Prime Minister, apparently, is no longer worried about the issue. These days, he worries very little about anything except the quality of the people whom he leads. He wonders just how much longer he can lead a government if speeches of the kind with which we have been regaled this morning are to be the order of the day.

Let me give the honorable member for Lyne the opinion of another rabble-rousing Minister, my right honorable friend who rouses the rabble in the Melbourne Club, the Union Club, and similar places. I refer to the Minister for External Affairs (Mr. Casey), who has changed the liberal views he once held. The right honorable gentleman was reported in the Adelaide “ Advertiser “ of 9th March, 1948, as having said -

All the .parties are very awake to the lively menace of communism. I believe it would be right to say that the danger here is well in hand.

The government then in office was a Labour government.

Mr Edmonds:

– When did the Minister say that?


– In 1948, when he was out of the Parliament. In the light of all those things, how can the honorable member for Lyne expect the country to take him or his party seriously, or to take seriously any of the .propaganda .that will be put out at the next .election campaign in .support of the so-called cause of .anti-communism? But there .are totalitarian-minded people in the Australian Country party to an even greater degree than there are in the Liberal party of Australia. There is regard for Liberal principles among most members of the Liberal party. The new leader of the Australian Country party is a gentleman who would love to transfer to the Liberal party and become Prime Minister - if he could. As a matter of fact, at an Australian Country party conference in Melbourne, the other day, it was seriously suggested that because the Australian Country party had supported the Liberal party in office for more than eight years the Prime Minister should generously step down in order that the Minister for Trade (Mr. McEwen) might become Prime Minister. The sort of thing that we might expect from the Minister for Trade can be gauged from his speech in this House on 20th March, 1947 -

  1. . there can be no order in modern society unless the individual surrenders his sovereignty to the sovereign State.
Dr Evatt:

– Who said that?


– It was said by the Minister for Trade - the present leader of the Australian Country party. He leads the people who talk about the totalitarianism of communism. You will understand from all this, Mr. Deputy Speaker, that I have documented my case very well.

I want to refer to two other matters. The Government controls the Senate to-day only because Senator McCallum was able, at the last Senate elections, in 1955, to fill the last position in New South Wales on the preferences of Mr. James Healy, who has been mentioned to-day by the honorable member for Lyne. In the final count, the preferences of Mr. Healy were sufficient to elect Senator McCallum instead of an Australian Labour party candidate. The Government would not have had the numbers to control the Senate for the last two years if it had not obtained Mr. Healy’s preferences. In other words, this Government controls the Senate by the grace of Jim Healy, one of the Communist party’s lending personalities.

I have a photostat copy of a how-to-vote card issued by the New South Wales branch of the Liberal party for the Commonwealth elections in 1943. There is and was a reciprocity then between the Communists and the Liberals. I have told the House what happened in 1955, when the Communists gave their preferences to the Liberal party Senate candidates. In 1943, the reverse happened: The Liberal party gave its preferences to Australian Communist party candidates ahead of Australian Labour party and independent candidates.

Mr Edmonds:

– That is reciprocity.


– It is real reciprocity.

The honorable member for Lyne invoked the name of Christianity. I appreciate his association with his church, but there are many other people in the community who are good churchmen, too, and who will not have a bar of any proposal to suppress freedom, lt is the churches themselves that know that interference by the State in church affairs over the centuries has harmed both religion and the State, and most churchmen are very sensitive about this question. On 25th May, 1951, the Melbourne “ Age “ reported the views expressed in a report stating the attitude of the Methodist Church to a number of current problems, which was presented to the Methodist General Conference in Adelaide in that year. The views were expressed because, at that time, the referendum on the Communist Party Dissolution Act 1950 was before the people. The Methodist conference said -

We reject, as an oversimplification, any view of the existing world situation which presents it exclusively in terms of a conflict between Communism and Christianity.

While repudiating Communism in its basic philosophy and in its political expression, we recognize that in its social programme it seeks certain goals which are, and even must be, the concern of an awakened Christian conscience.

For this reason Communism will never be defeated by a merely negative policy, or even by resort to arms.

We have to beat communism with a better idea, and we have to destroy monopoly capitalism, out of which communism grows, or else there will never be any peace in the world. It is monopoly capitalism that has spawned the awful, filthy, evil philosophy of communism. I have an opinion issued by the Catholic bishops in 1946, which I think goes right to the source of the whole problem.


– Order! The. honorable gentleman’s time has expired.

Minister for Labour and National Service · HIGGINS, VICTORIA · LP

– The Deputy Leader of the Opposition (Mr. Calwell) opened his speech by saying that the honorable member for Lyne (Mr. Lucock), in presenting this motion, had given the Opposition nothing to worry about. If that be the case, it is rather surprising that members of the Opposition should have taken delaying tactics for so long to prevent the honorable gentleman from bringing this motion forward. It is also rather surprising that members of the Opposition, knowing that the Government had arranged for three speakers from each side of the House to participate in this debate, should bring on three heavyweights to speak for the Opposition on this matter - the Leader of the Opposition (Dr. Evatt), the Deputy Leader of the Opposition and the young pretender, the white hope from Woolloomooloo. They are the three that the Opposition has selected to answer the motion which, in the words of the Deputy Leader of the Opposition, gives the Opposition nothing whatever to worry about. Of course, honorable members opposite have plenty to worry about in the terms of this motion, and I think that the deputy leader felt that the best tactic was to avoid dealing directly with it, to throw around it a smoke screen of sarcasm and ridicule, and to delve back into the archives of a period when we were allied with Russia in a war which we both were fighting against fascism. This side of the House has no more truck with fascism than has any one else who is out to fight authoritarian trends throughout the world.

There is undoubtedly much, not only for the Opposition but for all people in this country who value freedom and the standards that we have developed here, to worry about in this motion. The deputy leader twitted the Government with the fact that we had not sought to go to the people again with a referendum asking for increased powers to deal with communism. He reminded us that the last occasion on which this happened was seven years ago. That is true, but it is also true that had we been able on that occasion to gain the powers which we failed to gain, largely as a result of the vigorous campaign, the bitter campaign, the campaign of misrepresentation, which the present Leader of the Opposition led on that occasion, they would have been of great value to this Government in dealing with communism in the period in between, and they would have been of great value to us to-day.

Mr Curtin:

– Why not have another go at it?


– The reason is obvious enough. So long as the Australian Labour parly has its present leadership, so long as that party is in a position of influence and is of the state of mind of so many honorable gentlemen opposite in senior places, we would not help the cause of the fight against communism by having a referendum. We would harm it. The reason for that, too, is obvious enough. If we were to conduct a referendum for increased powers to deal with communism to-day, while the Labour party is under its present leader, we would divide the people of Australia again, and that leader would see to it that the people of Australia were divided on this issue.

What Australia needs is what the Communists themselves are always preaching in their own objectives, that is, a united front - not a united front for communism, but a united political front against communism. How can we in this country hope to get a united political front against communism when we have the kind of leadership, and the kind of support behind that leadership, that we find in honorable gentlemen on the opposite side of the House?

Mr Duthie:

– Those are filthy insinuations.


– Order! The honorable member will withdraw that remark.

Mr Duthie:

– I withdraw it.


– I know that there are honorable gentlemen opposite who have no love for communism. Some of them have been sufficiently outspoken to earn their expulsion from the party. Why has the Labour party abandoned the honorable member for Reid (Mr. Morgan) to his fate? Is it because he has not been a good Labour member? Of course not. It is because his opposition to communism is well known in this place that he can look for no support. Where are the missing seven from Victoria, whose bitter campaign against communism was a feature of the previous Parliament? Not all honorable gentlemen opposite, of course, have sympathy with communism as such, but they have allowed themselves to be manoeuvred into a position where they believe that for their own political salvation they must rely upon the support that communism can bring. Communism has extended its influence through key trade unions of considerable membership affiliated with the Australian Labour party. Honorable members opposite cannot afford to be abandoned by those key trade unions. They cannot afford to fight the Communists who lead them.

So the real danger in Australia to-day from Communist influence proceeds very largely from the weakness of the Australian Labour party in carrying on the fight inside the trade union movement and inside the political movement against the Communists who have now become a necessary prop for political support. The number of Communists in Australia, as I think everybody in this chamber knows, is very small. The actual membership of the Communist party is not more than between 5,000 and 6,000. Yet the influence, industrially and politically, that that handful of Communists is able to exert is very considerable, as we all know to our cost.

I want to remind honorable gentlemen opposite that they themselves felt strongly about this matter in the not so very distant past. We have just listened to the Deputy Leader of the Opposition attacking a motion which seeks to give additional power to this Government and this Parliament to deal with communism. I would remind him that it is not so very long ago that he used these words with regard to the menace of communism in Australia. Speaking at the time of the Communistinspired general coal strike, the honorable member for Melbourne said on 31st July, 1949-

We will deal with them, even if we have to put them into concentration camps. The only places for these people are concentration camps. If it is left to me to put them into concentration camps, they will go . . . We will use the whole of the resources at the disposal of the Commonwealth Government to smash them. We will use the Army, the Navy, and the Air Force on them, too, if necessary.

I am taking only one or two typical quotations, because time would not permit my doing otherwise. At that time another senior, significant member of the Labour party had no illusion about the menace of communism. The honorable member for Parkes (Mr. Haylen), describing Communists at that time, said that the coal strike was - . . an organized revolt by a small group of men who are determined to change the way of life in this country by causing discord, and eventually establishing a new Soviet State here.

I think it is appropriate in the course of a debate such as this to remind honorable gentlemen opposite that their then leader, the late Mr. Chifley, whom they very rightly quote with so much approval from time to time, authorized the insertion in newspapers of public advertisements to inform the people of Australia of the nature of the menace that was around them. I quote from one of those advertisements, authorized by him, which appeared in the “Daily Mirror” on 2nd July, 1949. It read -

The communist section of the miners’ leaders want no law but their own, and are recklessly ready to sabotage Australian industry and victimise their fellow-workers in order to achieve their ends. This fight is not one between workers and employers, or between an industrial union and a Government. It is an attempt by the cynical communist section of the miners’ leaders to destroy forever the Australian system of conciliation and arbitration, and to substitute an industrial anarchy in which the rights and wrongs of the case would be unimportant in disputes, and only strength would count. It is a vicious misuse of union solidarity and loyalty by the ruthless communist section of the miners’ leaders who are willing to climb to power over the ruins of industrial and social Australia.

Have they changed their views? One would only have to substitute the name of the Waterside Workers Federation for that of the miners federation in order to get a precisely parallel situation on the waterfront. Have honorable gentlemen opposite altered their views? As my last quotation

Mr Peters:

– That is good.


– I am sure it is good from the point of view of honorable members opposite, because I could go on citing examples for quite some time. Honorable members opposite are well aware that scores of senior Labour politicians and trade union officials have recognized, not only in their hearts, but publicly, the menace that this class represents to Australia. I should like to quote the words of Mr. Kenny, who was assistant secretary of the Labour Council of New South Wales. He was speaking at the 1946 annual conference of the Australian Labour party, and he said -

The Communists have allegiance only to a foreign power, which supplies them with unlimited funds to carry on their policy of espionage and disruption in this city (Sydney). I have given serious consideration to the foreign policy of Communists in this country, and in some of our industrial disputes we have come mighty close to foreign control of the workers in this country - close to treason.

I have quoted what Mr. Kenny said on that occasion because he still holds a responsible position in the Labour Council of New South Wales. He is also a senior member of the interstate executive of the Australian Council of Trade Unions, and he knows that to-day on the interstate executive he must sit cheek by jowl with four of the senior and acknowledged Communists in this country. He must see them play a part and, indeed, a decisive part, as recent events have shown, in shaping the policy of the A.C.T.U. He knows that he must expect a situation, which is supported by the Leader of the Opposition, where senior Communists will have a determining say - certainly an influential say - in thepolicy that honorable members opposite will’ put forward at the forthcoming elections. Why has the Australian Workers Union refused to belong to the A.C.T.U.? It is. directly due to the fact that the A.W.U. will not sit in conference with Communists who are in a position to exercise a direct and persuasive influence on Labour party policy. That fact is not without significance.

Why is there an Australian Democratic. Labour party to-day? Honorable membersopposite may sneer and laugh about the Democratic Labour party, but it was born because the men who now comprise it, and those who were formerly in this Parliament but have lost their positions here as a result of their support for it, have recognized that they can find no fight against communism within the ranks of the Labour party. The tragedy in this country to-day is that whereas we should have a united politicalfront against Communists and the harm that they can do to the country, we have a. divided Labour force, and there are men. in the Labour party who will not make the fight against communism one of their major aims.

Many members of the Opposition, and other members of the Labour party, regard members of the Democratic Labour party as their enemies and the enemies of this country more than they regard the Communists as their enemies and the enemies of Australia. Indeed, they act as if the Communists were their allies. They know that they cannot expect political support at an election from members of the Democratic Labour party as long as their leadership is suspect, as long as their foreign policy is in substance identical with that of the Communist party. Therefore, they turn to the Communist party for support. Communists lead many of the key unions, on whose support the Labour party relies. Where Communist candidates contest an election, Labour candidates are assured of the Communists’ preferences. They know that they will not get that support from former Labour men who are determined to support no longer a party that has no heart for the fight against communism.

Those are the main issues raised in the motion by the honorable member for Lyne. As long as we have this unholy alliance, as long as we have the practice of the unity ticket in trade union elections, the present state of affairs will continue. The approaching election on the waterfront is an important one. It will determine who shall control the waterfront for the next two years. A ticket has been issued and is called the “ united Federation ticket “. On that ticket are notorious Communists and men who claim to be members of the Labour party. That is what is going on in the industrial and political life of this country. That is a process that enjoys either the blessing or the tacit acceptance of the leadership of the Labour party and honorable members opposite. While that situation continues there can be no hope of combined resistance by the mass of the Australian people against those forces that are determined to white-ant the democratic institutions of this country and, as time goes on. substitute for them the totalitarian regime and undemocratic processes that characterize the Soviet Union to-day. The House is indebted to the honorable member for Lyne for submitting this motion and again providing an opportunity for an open and public discussion on it.

East Sydney

.- I thank the Minister for Labour and- National’ Service (Mr. Harold Holt) for referring to me as one of the heavyweights of the Labour party. But heavyweights like to. fight heavyweights, and what I resent is the fact that the Government is putting up a team of mental paperweights to meet the heavyweights of the Labour party. The Minister referred to me as the white hope from Woolloomooloo. It is far preferable to be the white hope from Woolloomooloo than to be the no-hoper from Higgins. The Minister was supposed to be speaking in support of this motion, yet he started off by saying that a referendum- could not be held because the Leader of the Opposition (Dr. Evatt) would again divide the country. The Minister, although presumably speaking insupport of the motion, has actually indicated at the outset that it should be rejected by the Parliament. What is the situation? It is very easy for the Minister to indulge in his. usual tactics of trying to smear members, of the Labour party by suggesting that if we are not actually members of the Communist party, we are under its control; yet this very Government, for a number of years, has been trying to induce the Labour party to nominate members to the Foreign Affairs Committee, which deals with the most important function of government - foreign policy. The Government wants the Communist, or Communist-dominated, Labour party to be represented on the committee.

Let us have a look at the honorable member for Lyne (Mr. Lucock), who introduced this motion. My function in this debate is to engage in the mopping-up operations. The Government was so devastated by the speech of the Deputy Leader of the Opposition (Mr. Calwell) that all that is left for me to do is to mop-up. The honorable member for Lyne said that it was not intended that there should be any witch hunt if powers were given to this Parliament as he suggested. Not at all! I suggest to the honorable member that he should look up the original statement made by the Prime Minister (Mr. Menzies), when he branded a number of people in this Parliament, and trade union officials, as Communists, and within 24 hours he had to withdraw and apologize in respect of half the number of those persons. The honorable member for Lyne said that his motion was not aimed at the Labour party. If it is not, why did he place so much emphasis on what is known as the Hursey case? The Hurseys are not in trouble with their trade union organization because they wanted to make a contribution to the Communist party. They are in trouble because they refused to obey a decision of their organization to make a contribution to the Australian Labour party. It is quite obvious that the honorable member’s intention is to aim at the Australian Labour party and do it damage. He laid great stress on the Hungarian uprising and quoted statements that were made by members of the Labour party about that incident. But if this matter is to be decided on purely non-party lines, why did he not make some reference to the attitude of the Government he supports in sponsoring the recognition of the Kadar Government by its representatives overseas?

As a matter of fact, the hate speech of the honorable member for Lyne is completely out of keeping with his other occupation. If he is concerned with the preservation of freedom and liberty, why did he not make some reference to South Africa, where church organizations are being forced to close down? Why? Because they are engaged in what activity? Are they assisting the Communists? Not at all. The church organizations there merely solicited funds to provide for the proper defence of 95 people who are now facing a charge of treason. There is more oppression in South Africa to-day than members of the Labour party are prepared to condone. Why do not Government supporters make some reference to the tyranny in Portugal and Spain? Why do they reserve their criticism for particular countries? If they claim to be anti-Nazi why do they not attack this other form of extremism? The Australian Labour party attacks extremism from either the right or the left, and we believe that the Labour party has the answer to the problem.

This debate affords me a very convenient opportunity to ventilate a matter that I have had in mind for some time. We have had investigations by royal commissions into espionage. We have had an examination made by judges of the courts selected by this Government and the Government of Victoria. They have been unable tofind any evidence upon which charges could be levelled against anybody for having been engaged in espionage. Let me turn to the Royal Commission on Espionage in Australia which sat a few years ago and to what happened in that case. The Prime Minister (Mr. Menzies) said in this Parliament on 12th August, 1954 - and these are his own words -

The name of Petrov became known to me for the first time on Sunday night the 11th April, I think, or the preceding Saturday night.

That statement was in complete conflict with the sworn evidence of Mr. Richards, the Deputy Director of the Australian Security Intelligence Organization. He said that certain documents were delivered by Petrov on 3rd April, 1954. On the following day, according to Mr. Richards’s evidence, the officers of the A.S.I.O. had a long discussion by arrangement with the Prime Minister in Canberra; yet the Prime Minister wanted this Parliament and the country to believe that although he had had hours of discussion with those gentlemen, no mention was made of Petrov’s name or of the £5,000 payment that had been made to Petrov. Mr. Richards’s evidence was confirmed by Brigadier Spry, the Director of the A.S.I.O., and by Dr. Bialoguski.

The Prime Minister said that he did not know of the payment of £5,000 to Petrov until 9th May, 1954. It must be obvious to honorable members that either Mr. Richards, Brigadier Spry and Dr. Bialoguski were lying, or the Prime Minister was lying when he made that statement in this Parliament. The right honorable gentleman refused to answer questions in the Parliament concerning the conflict between his statements and the sworn statement of Mr. Richards. I asked him continually and he evaded my questions by saying that an investigation was proceeding, and if he was required to make any statement, he was available to go before the commission.

Mr. SPEAKER (Hon. John McLeay).Order! As it is two hours after the time fixed for the meeting of the House, I interrupt the debate in accordance with Standing Order 108.

Motion (by Mr. Harold Holt) agreed to -

That the time for the debate be extended.


– I repeat that it must be obvious that either Brigadier Spry and Mr. Richards were lying or the Prime Minister was lying. Let me refer to somebody who might be regarded as an independent witness in connexion with this matter. Honorable members of all parties joined to say farewell to the former Clerk of the House of Representatives, Mr. F. C. Green, when he retired after many years of excellent service to the Parliament and the nation. In joining together, honorable members evidently recognized him as being a person whose opinion could be accepted. What did Mr. Green state in an article he contributed to a university paper in Tasmania? I quote from it -

One of the most disturbing things which emerged from the whole of the Petrov defection and the subsequent inquiry was the suggestion of the lack of integrity of persons in high ministerial and official office. When in the last hours of the Parliament before dissolution preparatory to the General Elections, the Prime Minister announced Petrov’s defection, and stated his version of the circumstances under which the matter first came before him, his statement was completely inconsistent in vital details with the evidence subsequently given to the Commission by the Director and the Deputy Director of A.S.I.O. Evidence by Bialoguski and others confirmed that of the A.S.I.O. officials. When the Commission’s report was being debated in the House the Prime Minister was accused of having deliberately misled the House and the country. Whether he did mislead or whether he stated the facts correctly has never been explained; the House was left to draw its own conclusion, but it was this initial mis-statement which led many people to believe and state publicly that the political use made of the defection of Petrov was one great conspiracy built up over quite a long period for political purposes.

That was the statement of a man whose word would be accepted by almost everybody in Australia. Referring to this socalled investigation, he said -

The inquiry came to smell to high heaven in terms of political intrigue.

This inquiry was obviously tainted with political malice and party interests.

That is exactly the purpose of the motion now before the House. It has the same motives. The Royal Commission on Espionage in Australia actually found - and I am not blaming the royal commissioners because they had to base their finding on the evidence submitted to them - that Petrov was a reputable witness. But Mr. Green, a former Clerk of this House, said -

Petrov emerges as an amiable clot terrified by his Embassy bosses.

Everybody knows, despite false evidence given to the royal commission concerning Petrov’s sobriety, that it was subsequently proved beyond reasonable doubt that he was a drunkard. Surely honorable members have not forgotten the incident at Surfers Paradise when, under an assumed name - but now admitted by the Government - Petrov was found wandering around in a drunken, stupid condition, without his pants.

Surely, honorable members remember when the Communist Party Dissolution Bill was being discussed in this Parliament and the Prime Minister gave the game away himself. Many people may be misled by this motion. They may believe that, if the Government gets this power, it intends to deal only with members of the Communist party. But if we examine the Government’s definition of a Communist, we find that it involves, covers and affects a great number of persons outside the Communist party itself. When the Prime Minister was debating the Communist Party Dissolution Bill in this Parliament he complained that a Labour majority in the Senate was obstructing the Government. By interjection, in my usual helpful way, I said -

You can have them declared.

The Prime Minister replied, in effect, “ Yes, that is not a bad idea. I could easily declare one in the other chamber, and I would not have much difficulty in declaring one in this chamber “. He did not mention the name, but he was looking in my direction. Let us examine this famous royal commission. What a peculiar royal commission it was! While the commission was receiving evidence and in the course of determining whether the growth of communism and its subversive activities created a menace to Australia, it had a Christmas party. Whom did it invite to the Christmas party? The three judges, the members of the security service, and the witnesses, including the Petrovs. Honorable members will recall the criticism that was levelled at the Government on that occasion. Why have not honorable members opposite mentioned the case of Madame Oilier? Madame Oilier was smeared, and she underwent a most rigorous examination by a military court of inquiry in her own country. After that court had completed its investigation, it did not find her guilty even of indiscretion, and she was restored to the position that she formerly occupied.

On another occasion, the Prime Minister, in reply to a question that I asked, said that, as a result of the work of the Petrovs, 522 spies had been revealed. But where are these 522 spies? Has the Government taken any action against them? Have any of them been convicted and sentenced to long terms of imprisonment or to death? Are the 522 still at large? The Minister for External Affairs (Mr. Casey) referred to a nest of spies in his department. But We were never able to ascertain what action he took; he was never prepared to give any evidence to the Parliament that any action at all was taken against them. If the Government is concerned about the menace of communism, why has not action been taken under the powers that it already possesses?

I come now to a rather interesting point. The motion of the honorable member for Lyne seeks a referendum on constitutional changes. For about the last eighteen months, the Constitution Review Committee, which comprises six representatives of the Government and six representatives of the Opposition, has been discussing the necessity for amendments to the Constitution. No suggestion has come from any Government representative on the committee that the Constitution should be amended in the way that this motion now seeks to have it amended. That shows that this is only an election stunt. Because the Government cannot answer for its failure to provide adequate housing and employment for those requiring it, and for its bungling of defence arrangements - it has bungled everything that it has touched - it does not want any concentration on such matters during an election campaign and the honorable member has allowed himself to be used as a tool to try to raise this old bogy of communism once again.

The Government attempts to attribute every strike to the activities of the Communist party, instead of getting down to the real causes of industrial upheavals. I venture the opinion that there has been no industrial dispute in my experience - and I was Minister for Labour and National Service for a number of years - which has resulted solely from the activities of the Communist party. What has the Communist party done? Quite frequently, it has taken advantage of situations that have arisen in industry, where genuine grounds for complaint have existed. As a political organization, it has turned those situations to its own advantage. But that does not mean that there was no cause for unrest on the part of the workers concerned.

Mention was made of the fact that Senator McCallum was elected on Communist preferences. So was the honorable member for Robertson (Mr. Dean), who has now earned the name of the “ Red Dean “. He was elected on Communist preferences. I do not say this to the discredit of Senator McCallum, because one cannot be the guide and philosopher to one’s children, no matter what age they may reach. But is it not a fact that Senator McCallum has a daughter who is said to be a member of the Communist party and who gives out propaganda for that organization?

There is a great deal of hypocrisy in this move by the Government. As I said, it is designed only to create difficulties for Labour and the trade unions. We say quite frankly that the people have made their decision. They knew the great dangers of giving the Menzies Government the powers it sought by referendum a few years ago. The Government is not prepared to have another referendum now because it knows by experience, in my opinion, that if this question were again submitted to the people it would be more overwhelmingly defeated than it was on the previous occasion.


.- J had hoped that in the course of this debate we would have heard an expression of opinion from the spokesman of the Labour party, particularly the high-ranking spokesman that we have heard, on the Opposition’s feelings about the words of this motion. As a Parliament, we want to know whether, in the opinion of the Labour party, the Communist party has become such a menace to the security and safety of Australia that it should no longer be allowed the freedom to practise its tactics and take advantage of the tolerance and privilege which is basic to our democratic way of life to undermine that way of life for its own evil purposes. The motion concludes by saying that we should seek power to make laws with respect to the outlawing of communism.

Since this debate started, we have not heard Labour’s views. The views of the Liberal party on communism are well known and have already been expressed here to-day. The views of the Australian

Country party have been expressed by the mover of the motion and show that the Australian Country party agrees with the Liberal party that the Communist party and Communist tactics are undermining our way of life and are becoming a menace to the safety and security of Australia. Another political party, the Democratic Labour party, agrees exactly with that proposition, lt agrees with the Australian Country party and with the Liberal party that the Communist party is a menace to the safety and security of Australia and to the way of life that exists here. The Queensland Labour party agrees with that principle and has been prepared to make sacrifices for it. The only opinion we have heard here to-day from the Australian Labour party representatives is that expressed by the honorable member for East Sydney (Mr. Ward), who referred to the Communist bogy. Where does the Labour party stand? Does it stand behind the honorable member for East Sydney and regard this as just a bogy, just something that has been dreamed up, something that can be lightly dismissed? Or does it agree that Communism is what this motion alleges it to be - a menace to the safety and security of Australia and to the way of life of the people of Australia?

The honorable member for East Sydney dealt sarcastically with the activities of the Royal Commission on Espionage. But is it not a fact that the findings of that Royal Commission pointed out to the Australian people exactly what this motion claims, that communism is a menace to our safety and security? Can that be denied? Is there any member of the Australian Labour party who would say that the commission erred in its findings that communism is a real, potent force working to undermine our way of life? The royal commission held in Victoria came to the same conclusion, that communism is a menace to our way of life. Wherever we go - in the streets, in the homes of the people, in the workshops, in the churches and amongst people in their social activities - we find the unanimous opinion that communism is a menace to the safety and security of Australia and to our way of life. Why is is that in this small segment of people we hear the one voice that has ventured to express an opinion saying that this is the communist bogy?

Does the Labour party believe that this is just a bogy? Is this small section of people that we see here speaking only for itself?

Sitting suspended from 12.45 to 2.15 p.m.


– Most people, and most organizations, in Australia realize the significance of the wording of this motion, and agree that the Communist party in Australia is a menace to the nation’s safety and security and its way of life.

I want now to turn to organizations other than those I have already mentioned. I shall deal with the attitude of the Australian Workers Union, which is undoubtedly the largest trade union in Australia and is a very powerful organization. The A.W.U. is seised of the significance of communism and its threat to Australia and has a vigorous approach to the problem. For many years, the A.W.U. has realized that communism in Australia is a menace to the members of the A.W.U., their living conditions, their working conditions ,and their way of life generally. At present, A.W.U. leaders are concerned about the Australian Council of Trade Unions. Only yesterday, “The Worker”, the official organ of the A.W.U., made a violent attack on Mr. Monk, the president of the A.C.T.U. I should like to know from any honorable member opposite the Labour party’s attitude to the A.W.U.’s feelings regarding Mr. Monk’s leadership of the A.C.T.U. “The Worker” reports Mr. Dougherty, probably the most prominent A.W.U. leader, as saying -

No matter how much Mr. Monk would like to resent the mention of Red influence in the A.C.T.U., he must admit that every week he holds out his hand for a pay envelope - contributed to by Communist party unions.

That statement expresses the bitter feeling of the A.W.U. towards the A.C.T.U. It accuses a great leader of the A.C.T.U. of taking red-tainted money in his pay envelope every week

The A.W.U.’s bitter feelings against the Communist party stem from the fact that the A.W.U. realizes that the Communist party in Australia is the greatest existing menace to the working conditions of the Australian people. Because of that, the A.W.U. is prepared to challenge the A.C.T.U. It is not prepared now to meet with the Australian Labour party on this issue or any other issue in the political field. This feeling is becoming wider and wider in the ranks of the A.W.U.

The Democratic Labour party was founded on this very cause of fighting communism. No reference has been made by spokesmen for the Opposition in this debate to the fact that seven members of the then Anti-Communist Labour party, who sat in this chamber, left the Labour party and, day after day during the session, spoke on the subject of combating communism, and attacked the Labour party for its lackadaisical attitude to communism. Eventually, as we saw, that split widened, and we heard accusations from men inside the Labour party that the Labour party was bending the knee to communism.

Now we have Mr. Dougherty making an attack on Mr. Monk and saying that the Australian Labour party actually received cash from the Communist party of Australia to further its election campaigns, and has done so right through. I recall that on 8th September, 1955, Mr. William Bourke, the then honorable member for Fawkner, challenged the Australian Labour party to produce its books and prove that it had not received £13,000 from the Communist party in regard to the referendum then being held to seek power to permit the Commonwealth to dissolve the Communist party. That charge was never adequately answered. The books were never produced to rebut the allegation.

So the Democratic Labour party is founded on the very basis of hatred for communism - hatred for those people who menace the Australian way of life. The Democratic Labour party will continue with its activities against communism. It will never, and can never, amalgamate with the Australian Labour party while the A.L.P. bends the knee to the Communists, while it continues to be permeated by Marxist doctrine and remains in affiliation with the Communist party. How can it be expected that the Democratic Labour party will be associated with the Australian Labour party when the very basis of the Australian Labour party’s foreign policy was laid at the Hobart conference of the party and is precisely, word for word, sentence for sentence, the policy of the Communist party on foreign affairs?

Mr Duthie:

– I wish to take a point of order, Mr. Speaker. I take personal objection to the statement made by the honorable member for Capricornia that the Hobart conference of the A.L.P. adopted Communist policy. I ask that the honorable gentleman be directed to withdraw the statement. I was on the body that formulated the policy of the A.L.P.


– I think that the statement made was fair comment.


– Let me quote an authority on the matter - Mr. Gair, who was Premier of Queensland at the time of the Hobart conference, and who at that time was lauded by honorable members opposite, who now giggle and guffaw, as the great Labour leader of the north. Mr. Gair said when he came back from the conference at Hobart that the Labour party had sold out to the Communists. Shortly after that, Mr. Gair led a team of members away from the Australian Labour party and formed the Queensland Labour party which, like the Democratic Labour party, has as its basis hatred of communism and hatred of the Australian Labour party because the A.L.P. has not the courage to fight Corns, wherever they are found, and because the Australian Labour party brings Corns, into its organization, takes its orders from the Corns., and becomes their mouthpiece in this Parliament.

I should be interested to hear the views of the honorable member for Herbert (Mr. Edmonds), who is now interjecting, on the statement made yesterday in the Queensland State House by the official spokesman of the Australian Labour party in Queensland, Mr. Mann, a not insignificant figure in Queensland’s political life, who referred to Mr. Gair, Mr. Walsh, Mr. Power and those who support them in the Queensland Labour party as “ rats and scabs “.

Mr Edmonds:

– Hear, hear! That is what they are.


– I am glad to hear the honorable member for Herbert agree with Mr. Mann’s statement, because we know that the only difference between the Queensland Labour party and the Australian Labour party is that the Queensland Labour party is prepared to fight Communists and the Australian Labour party is not. The honorable member for

Herbert agrees that members of the Queensland Labour party should be classified as rats and scabs. Let that go on the record, and stay on the record. Let us have this one out at election time.

Mr Edmonds:

– lt has been on the record for a long time.


– Well, a little reiteration now and in the future will not do any harm. Federal, State and trade union elections are all coming up this year. The Australian Labour party has become permeated with Marxist ideas, and I am surprised when I talk with individual members of the Labour party to find that they have a realization deep within them of the gradual inevitability of communism. How many honorable members opposite would deny that they believe that communism is inevitable? They think it. They believe it, and their policy is shaped and moulded towards the day when communism will have become a force and a factor here. Because they believe that the triumph of communism is inevitable, the great bulk of honorable members opposite have accepted the tenets of communism, altered them slightly, based the decisions of the Hobart conference of the Australian Labour party on them, and have brought into existence a Communist-Labour policy which is described by its adherents as “ democratic socialism “ but which is a mixture of communism with a little Labour policy. And the democratic socialists to-day are prepared to have their names on the same ballot papers, on a unity ticket, with Communists, so that they may have the support of the Corns, in gaining control of trade unions by winning trade union elections. It is a shattering fact for the people of Australia to realize that this once great Australian Labour party has become so permeated with Marxism and so conscious that it is unable to fight communism that it has now bent the knee and is prepared to place the names of its candidates on the same ballot paper as those of well-known Communists or avowed Communists. At the same time, the Labour party wants to go out to the people and say that it offers itself as an alternative to the existing Government, and ask for their votes. It asks the representatives of the Queensland Labour party - the rats and scabs, as an honorable member opposite described them - to give it their preferences. It wants the Australian Democratic Labour party can didates to give it their preferences at federal elections. Why does it do that? It wants to have in this place a democratic socialist government which will be comprised of 75 per cent. Communists and the majority of the remaining 25 per cent, will be the tame cats who have not the courage to express, vocally, their hatred of communism either here or outside on the hustings.

Mr Edmonds:

– What rot! Why don’t you sit down?


– One of the tragedies of the Labour movement is that men like the honorable member for Herbert, who has interjected, do not continue to fight against communism but are prepared, because of their desire to remain in this place to subordinate their principles and their hatred of communism and follow like tame cats the democratic socialist line. This attitude will ultimately lead to a complete victory for communism in this country. I support the motion.

Leader of the Opposition · Barton

– Before lunch the honorable member for Capricornia (Mr. Pearce) opened his speech, in a moderate way, by asking for answers to certain relevant questions; but something seems to have happened between a quarter to one and a quarter past two. I shall do my best to answer his questions because I think they are answerable; and the answers are quite clear. Before lunch the honorable member asked: What is the attitude of the Labour party towards communism? The Labour party is a democratic party. The whole basis of the Labour movement is democratic, right through from the trade unions to those who are elected to Parliament. The attitude which Labour has always taken towards communism - and I think it is the proper attitude - is that political parties are quite different in their organization and in their objectives. The objection of Labour to communism begins with the fact that the Communist party believes in a totalitarian form of government. If a Communist government is in power in any country, no elections are held from the time that it assumes power. Communist governments resemble fascist governments such as are in office in Spain, Portugal and many other countries in Europe and the Middle East which I could name. Those governments have no resemblance to democratic government, and Labour objects to all of them because they have no basis of democracy.

In answer to the question of how Labour deals with communism, the approach of Labour to communism is first to recognize that the Communist belief in a creed of totalitarianism is absolutely opposed to Labour’s point of view. Our attitude towards communism has been proved not by talk, such as we heard this morning from the Government side, but by our deeds. Let me illustrate the point. I find that if a thing is said often enough and clearly enough it will penetrate even the dullest minds. Labour believes in applying the law of the land and prosecuting all persons, including Communists, who commit a breach of the law. We have done that. To-day, the Minister for Labour and National Service (Mr. Harold Holt) referred to the coal strike. But what happened then does not prove the opposite to what Labour did. Certain persons were prosecuted with the rigour of the law because their actions were regarded by the Government as serious breaches of the law. Furthermore, some persons were prosecuted for sedition. Some were convicted and some were acquitted. That was an example of applying the law of the land to people who broke the law either by subversion or sedition.

What has this Government done? I know of no prosecution against Communists since it has been in office. If the Government says the Communists are guilty of sedition, why does it not prosecute them? But there has not been one prosecution. The Government does not want to prosecute the Communists. It realizes that, in a sense, communism is its meal ticket. When elections are approaching, it takes the ticket out from the desk and makes a great show of it. The Government asks itself, in effect, “ Who will we get to do this? “ It would not get a Minister to do it. So, it called upon an honorable member who has not even spoken on the subject before. The Minister for Labour and National Service brought in all sorts of irrelevant matters, but he did not say whether he supported the motion which is now before the Chair. And he will not support it; neither will the Government support it. I believe that the Government has recovered its senses as to the proper method of dealing with communism. In an article which appeared in the Melbourne “Herald” in 1946, the present Prime Minister (Mr. Menzies) expressed his view as to the proper method of dealing with communism internally. He said -

Our views are these. In time of peace it is a very, very serious step to prohibit the association of people for the promulgation of any particular political views. Therefore, in time of peace we do not propose to place a ban on the Communist party as such.

We believe that, if the Communist party’s views constitute a real danger to the public, they will be expressed through acts which will represent breaches of law.

If the Communists are, on investigation, found to be committing breaches of this law, then they will be among the first people prosecuted.

Mr Edmonds:

– Who said that?


– The present Prime Minister. He went on -

In other words, we should deal with the Communists as breakers of the general law of the land and not purely as Communists. And the reason for that is that in any country, in normal times, all doubts about freedom of speech, thought and assembly, ought to be resolved in favour of freedom.

That is the view which the Prime Minister expressed. We know that he has expressed it often, and he has frequently done so in this House. He adopted a different view only on the eve of the 1949 elections. His Government brought on the referendum on the Communist Party Dissolution Bill, and its proposals were defeated. What he said in 1946 is the basic view held by the Labour party. We believe that the fundamental freedoms declared in the United Nations Charter and the Charter of Human Rights - freedom of association, freedom of speech and freedom to express political views - should not be denied. Action should not be taken against a group to dissolve it; the Government must deal with particular breaches of the law which come to the notice of the authorities- If a breach can be proved, it is a proper case for prosecution. That is the English view; it is the accepted view in the United Kingdom.

When the referendum was being taken in 1951, the Lord Chancellor of England, the head of the judiciary in England, who was then visiting Australia, said that he did not believe in banning communism because that was against British tradition. There is a

Communist party in Great Britain and its members are prosecuted if they are found to break the law. The position is similar here. I do not believe there were more serious prosecutions than those launched in this country in 1948 and 1949. That is the answer to the question of the honorable member for Capricornia. To use these matters as political weapons is nauseating and disgusting and the Government cannot get any good out of it because the people of this country are now well informed about the political motives of the Government in dealing with this matter.

The motion which has been moved by the honorable member for Lyne has been on the notice-paper for many months. Suddenly, it has been brought up at this time. Why? Because some people think it might be a good thing. They say, “We have tried it often before. We will try it again. It may do us good. It probably will not, but let us have a go. Do not let the Minister get too involved in it. He can come in but as long as he says nothing it is all right.” We hear again these references to the figure of £13,000 - a charge that has been completely negatived. A special committee of the Hobart conference went into it. (Government supporters interjecting) -


– The trouble is that the people who claim to have some knowledge of these things, and who repeat these charges although they have been negatived after full inquiry, do not want to hear the answer to them. The committee found that there was not a scintilla of truth in the charges. That was a part of the Hobart conference decision, published in the press, but nobody on the Government side bothered to note that fact.

What else have Government supporters said? They have referred to the trade unions. The honorable member for Lyne thinks it is smart tactics from a debating point of view, to ask, “ What is the attitude of the Australian Workers Union to the Australian Council of Trade Unions? “ He praised Mr. Monk. He had to do that because that was his line the other day. He referred to Mr. Monk as the great leader of the A.C.T.U. who had been criticized by the A.W.U. It is necessary to remember that the trade union movement consists of hundreds of trade unions. Some have Communist officials and the A.W.U. has protested against that; it does not like it. But still the A.W.U. is a member of the Labour councils of most of the States. People at trade union gatherings do include Communists. No doubt they also include a few - very few - members of the Democratic Labour party and perhaps even some Liberals. The trade unions are not political bodies. They are industrial bodies. It is true that there is a historic link between trade union objectives and the objectives of Labour. The trade union movement, because of stringent legislation, had to try to organize a political Labour movement in Australia and it did so.

The other references made by the honorable member for Capricornia are easily disposed of. I have already quoted, by way of example, what the Prime Minister said. It is no use trying to “ declare “ the Communist party as a body and make membership of it illegal. That is the essence of totalitarianism. Left-wing totalitarianism cannot be dealt with by applying right-wing totalitarian methods. That is what Mr. Truman said. But, according to honorable members opposite, everybody is off-side except them. The handful of people who advocate the course proposed by the honorable member for Lyne are completely ignorant on this subject. They cannot learn, and it is no good telling them. One could quote Mr. Truman to them. Sir Winston Churchill would not look at the proposal which our Prime Minister put forward in 1951. The Conservative party in England turned it down and the Labour party turned it down. In few countries is legislation of that character to be found. There are, of course, some countries in which it has been approved and where it is the law. Many of them are in Latin America, which consists almost entirely of dictatorship nations. In Europe, similar measures have been approved by nations such as Spain, Portugal and a few others of the right. Hitler, of course, was the most distinguished anti-Communist of the present century. Nobody can doubt what he did. The honorable gentleman who has moved this motion ought to look at the case of the heroic pastor Neimoller, the great leader of Protestantism in Germany who attacked Hitler. He said, “ We let him go at first “. The first opponents of Hitler were, of course, the Communists. Then the Jews were put into concentration camps with the results that were an absolute disgrace to the nation. Repressive measures against the Jews reached unspeakable proportions. But, as Neimoller said, it did not stop there. He said, “ We thought it would not matter and we let it go “. Then the repression was extended to the trade unions and, finally, the persecution of the churches commenced. That is what Hitler did. Honorable members opposite can have him. He used the methods that they would use. They would simply issue a decree saying “ The Communist party is no longer in existence; it is illegal “. We shall not permit that. We would be ashamed to do so, whatever the political consequences.

I have faith in the people of Australia. Even under unspeakably difficult conditions, when the position in Korea was serious, when everybody was naturally and reasonably against communism and its detested methods, the people of Australia would not give the Government the right to change the Constitution. They will not trust any government to issue arbitrary decrees. They want the law of the land to be observed. That is what we said in our manifesto -

Labour’s stand against Communism is clear, definite and just. Labour believes all persons guilty of any form of sedition, subversive or disloyal conduct, should be dealt with under the criminal laws of the country and according to the procedures of British justice. There are such laws in existence and they are stringent and apply to all persons, Communist or not.

There are such laws in existence in Australia. They are stringent. They apply to all persons whether Communist or not. Application of the law of the land means equality for everybody, whether he is a Communist, a Fascist or anything else. It must apply to every man, whatever his politics. Any other method would be a failure. The measure contemplated by Government supporters would never be attempted in more experienced countries such as Great Britain which have had a similar problem.

This debate has been useful. The Minister’s speech was unworthy of the position he occupied. It was a farrago - practically nonsense. He was looking around to see what political points he could get out of the debate, and he could not get any. I have given the mover of this motion an example that he might look at if he wants to study the subject before he brings it up again. That example is in the proceedings in Germany.

Mr Falkinder:

– Why has the right honorable member not mentioned unity tickets?


– I have mentioned almost everything else, and it is kind of the honorable member for Franklin to remind me of this matter. The unity ticket is a voting ticket within the ranks of the trade unions. It is not a ticket of the Labour party at all. The trade unions have meetings, which havenothing to do with politics, to decide who should be elected to offices in the unions. I understand that the tickets show the members of the union who have been nominated. That is carefully watched and policed. Does the honorable member for Franklin object to the trade unions running their own business? The tickets concern only trade union business within the trade unions themselves. The Hursey case is aa illustration of that. A great song and fuss has been made because two men have been asked to pay a small fee to the Labour party. But that levy was decided upon at a general meeting and voted for by these men!

Mr Falkinder:

– You said that it was not a matter of politics but that it was an industrial matter.


– I am now referring to the Hursey case. It is not a matter of politics simply because a trade union desires to make a contribution. The Hurseys owed many pounds to the trade union. The trade union saved Hursey senior from being thrown off the wharfs. The shipowners would not employ him and the stevedoring industry did not want him to have work. The union got him the right to work. Over twelve months ago an arrangement was made to try to make something out of the Hursey case. Not political! What about the contributions to the Liberal party by the big oil companies and the banks? Do they ask their shareholders to approve of the contributions? The honorable member for Franklin knows that the shareholders of those companies have no opportunity to say “ Yes “ or “ No “. They are never consulted. If they were to ask how much the Liberal party or some other party had been given they would get no answer. Do not be hypocritical about contributions to party funds. It is a subject on which honorable members opposite should be very tender and very careful.

I say that this debate must come back to the question whether we want to say that the Communist party shall cease to exist. If that is to be our attitude, we will prevent the Communists from being a group of people expressing certain views. Even if we detest their views, the proper thing to do is to act only when they do something illegal. That was the whole question at issue in the referendum. We took the constitutional view - the British view, the democratic view, the view implicit in the United Nations Charter and the Universal Declaration of Human Rights. We are not going to be bustled or affected by foolish attempts to gain a little bit of political capital from a motion of this character.

Before I sit down, I wish to congratulate my colleagues, the Deputy Leader of the Opposition (Mr. Calwell) and the honorable member for East Sydney (Mr. Ward). What they left of the arguments of those whom they answered was very little. They showed that the suggestions put forward by the honorable member for Lyne had no basis in justice, and that the view of the Opposition was the correct one. The people of Australia have adopted that view, as was shown by their vote at the referendum. We intend to stick to the principles of justice and democracy, and not be deterred by silly little debates initiated for some cheap political gain. Let me say - and this may influence honorable members opposite more than any claim of justice - that this attempt to influence the people will not be successful. The Australian people are awake to the methods of Government supporters. They have seen those methods in the Hursey case. They know that those methods are completely dishonest. They have seen the obvious attempt to kow-tow to the Democratic Labour party, which does say, at any rate, that it is a Labour party, stands before the people as a Labour party and helped to defeat in the Senate the banking bills, to the advantage of Australians.


– Order! The right honorable gentleman’s time has expired.

Debate (on motion by Mr. Wentworth) adjourned.

page 1004


Mr. SPEAKER (Hon. John McLeay).Order! As it now past the time provided for “ Grievance Day “, Order of the Day No. 1 will not be called on. The Committee of Supply will be set down for the next day of sitting.

page 1004


Second Reading

Debate resumed from 16th April (vide page 958), on motion by Sir Arthur Fadden -

That the bill be now read a second time.


.- This legislation provides for the payment of certain amounts of money to the various States. It also gives State authorities permission to undertake a certain amount of loan raising, in order to obtain moneys required for various projects and to provide certain services. The money will be used particularly for the provision of housing and for the relief of unemployment.

This grant has been made as a consequence of discussions that took place last February, and it is much less than the amount that the States require for these purposes. None of the Premiers present at the conference in February was at all satisfied with the attitude of the Commonwealth at that time. In fact, the Premier of South Australia, together with the Premiers of Victoria and of other States, indicated his concern at the fact that the Commonwealth had so far failed to appreciate the difficulties of the States. Costs incurred by every State undertaking have greatly increased in recent times. Further increased costs have been incurred because of the necessary expansion of programmes in the fields of education and health, amongst other things, and in the provision of better roads. The additional burdens that have been placed on State departments and semi-government authorities in this way cannot be lightened to any appreciable extent by the small amount of financial assistance provided by this legislation.

To gain a proper appreciation of the circumstances surrounding the decision taken in February last to make this grant of £5,000,000 we must go back to the Premiers conference held in May of last year. At that time the Commonwealth indicated that it would not allocate more than £190,000,000. At the Loan Council meeting the States suggested that this amount should be increased by £20,000,000. The Government was willing to increase the allocation to £200,000,000, which was £10,000,000 more than had been granted in the previous year. It was clearly indicated to the Commonwealth at that time that this amount was not sufficient to allow the States to carry out the works programmes that they desired to undertake and, at the same time, to balance thenbudgets. Because they did not receive sufficient money at that time, many of the States found it necessary to budget for a deficit. Since that meeting in May of last year, events have proved that the States had a real need of the amount that they contended at the time was necessary for them to carry out their programmes and to provide adequate education and health facilities and roads of reasonable standards.

The Commonwealth, realizing that the States were in difficulties, called another meeting of the Loan Council in February of this year and indicated its willingness to make a further contribution of £5,000,000, £4,000,000 of which was to be distributed among the States in accordance with the tax reimbursement formula, the remaining £1,000,000 to be divided between New South Wales and Queensland for special drought relief, lt was felt that the grant would help to relieve unemployment and provide the additional accommodation that is so essential in view of the growth of our population, due largely to immigration. Evidently, the Australian Loan Council, and the Government, which gave a lead in the deliberations of that body, sought to indicate that two aspects of the problem should be considered, and that any financial assistance extended to the States for the dual purposes of housing and the relief of unemployment should be provided in such a way as to avoid increasing the inflationary pressure and raising prices, especially the prices of essential commodities. Therefore, these considerations were at least brought to the notice of the Premiers at the time.

Ultimately, the Commonwealth indicated its willingness to underwrite local government borrowings to the extent of a further £3,000,000, not in order to promote the housing programmes of the State governments, but in order to deal with pockets of unemployment in various localities, which it was considered could be dealt with better by local authorities than by the State governments, and certainly more effectively than by the Commonwealth Government. The Prime Minister (Mr. Menzies), who took part in the deliberations at the time, suggested that the seriousness of the unemployment that was evident should not bo exaggerated, and he played down the idea that it was in any way abnormal. It is remarkable, if this Government really believed that the unemployment was not serious, that it should have held this special conference and made special provision to meet these circumstances.

As the honorable member for Port Adelaide (Mr. Thompson) indicated yesterday, although £3,000,000 was the maximum amount that the Commonwealth would underwrite, the State authorities were still free to raise loans for local authorities far in excess of that amount, if they could do so. However, I point out that the States have been greatly hampered by recent trends in savings banking. The latest figures available indicate that deposits in government savings banks in Australia have declined and deposits in private savings banks have greatly increased. This trend has been of considerable consequence, because moneys deposited in government savings banks are usually invested in loans raised by local governing bodies and State authorities for essential works, and particularly for housing programmes. The action of this Government in licensing savings banks conducted by the private trading banks has deprived government savings banks of moneys that they would have advanced to various State and local government bodies for the conduct of essential works programmes. The private savings banks, however, do not extend the same consideration to the needs of State authorities and local governing bodies. Although they devote the deposits that they receive to the purposes authorized in their licences, they use much of their bank funds to expand hirepurchase business, which, according to the latest figures, continues to increase substantially. As a result, these funds are no longer available for the government and local governing bodies to provide programmes of work, and housing, which is so important to the community.

In addition to these considerations, Mr. Speaker, the Commonwealth should recognize that it has an added responsibility ro the States with respect to the construction and maintenance of permanent roads, and particularly important arterial roads between the major cities. This is becoming an ever more serious problem, and the Commonwealth must recognize that an adequate roads programme is an essential and integral part of the defence programme. As the honorable member for Batman (Mr. Bird) has so frequently indicated to this House, there is a definite obligation upon the Commonwealth Government to make a greater contribution to the finances of the States and of local governing bodies for this’ purpose than it has made up to the present. I warmly commend the honorable member for Batman and other honorable members who have expressed the concern felt by local governing bodies and by the community generally at the lack of provision for roads as a most important public facility.

One can hardly feel that the Commonwealth does justice to the States when one realizes that by providing an extra £10,000,000 it could have made more adequate provision for various public works. Unfortunately, to-day there is certain regression in private employment and it is necessary for public works to provide more employment to meet this existing circumstance. Private enterprise is incapable of providing full employment and the Government has a responsibility in the matter. When the States ask for extra money, the Treasurer (Sir Arthur Fadden) sits down firmly upon the lid of the Treasury chest and says, “ No, I am prepared to give you some part of what you ask for, but I am not prepared to give you the accommodation that you think is essential”. As the Commonwealth this year has budgeted for a surplus of £100,000,000, the States were not unreasonable. We know the kind of extravagance for which the Commonwealth has been responsible. The Auditor-General has commented upon some expenditure by the Commonwealth in its own undertakings. Those comments might well be read and considered by Government supporters, because they are a serious indictment of the Government’s ability to do justice to the people and provide good government.

In view of the fact that the Commonwealth is budgeting for a surplus of £100,000,000, it seems somewhat niggardly to deny to the States the help that they now require. South Australia has very little, if anything, for which to thank the Government. Of an amount of £4,000,000 available for distribution to the States, South Australia receives £368,000. That would be of very little help. Increased numbers of immigrants are being brought to South Australia and they have to be accommodated and assimilated into our community life. An amount of £368,000 will not go very far in that direction. The Commonwealth is prepared to allocate £156,000 in loan raisings. My friend, the honorable member for Grey (Mr. Russell) says, facetiously, that a liberal policy has been followed. It is a pity that the Government’s liberality could not be a little more effective in its application to CommonwealthState financial arrangements. It is no wonder that when the Loan Council met in February there was a day of wrangling. That was the term used by the newspapers to describe the proceedings. Furthermore, all of those persons who participated, with the possible exception of the Commonwealth Treasurer, departed dissatisfied with the result of their deliberations. The Treasurer might have been satisfied, because he is the man who holds the purse, and he said, “ So much and no more “.

Unfortunately, the States are required to restrict their programmes. It is not possible to make essential provision for schools, and some form of temporary arrangements have to suffice. Children have to be accommodated in school corridors in order to receive their education. The needs of education departments are not being met in the proper fashion. We should not have to economize in the provision of hospital accommodation and treatment. We should provide the very best for the health of our people. Unfortunately, because the Commonwealth is unwilling to provide the States with the money which is essential for these and other purposes, there has to be a curtailment of the provision that would otherwise be made to meet the essential needs of our community. Public and semipublic undertakings should be permitted to go forward with the assurance of being able to give service to Australia. They should be expanded in order that we may improve the comfort and well-being of our people.

While I support the making of provision to meet the needs of the States, I say that unfortunately this provision is totally inadequate and most belated. We must be much more generous in the allocation of funds to the States than we are shown to be in the legislation now before us.

Debate (on motion by Mr. Snedden) adjourned.

page 1007


Second Reading

Minister for Air · Evans · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to repeal the war service moratorium provisions of the Reestablishment and Employment Act, subject to certain necessary savings.

Perhaps I should begin by refreshing honorable members’ minds as to the nature of the war service moratorium provisions that are contained in Part X. of the act. The word moratorium means “ a legal authorization to postpone payment “, and that is what some of these provisions are. For example, section 109 authorizes, in favour of a member of the forces, the postponement of payment of principal moneys secured by a mortgage entered into prior to engagement on war service, and I emphasize those words “ entered into prior to engagement on war service “. It also provides for the postponement of the payment of purchase money under an agreement for purchase of land entered into prior to engagement on war service. Again I emphasize the words “ entered into prior to engagement on war service “, which honorable members will see occur in most of the provisions to which I shall refer. Section 121 authorizes the postponement of payment of interest payable under such mortgages and agreements, and of rates on land. Relief is also given in other respects. Section 1 17 restricts execution or other legal process to enforce a judgment in respect of an agreement entered into prior to engagement on war service, and the exercise of any legal remedy in consequence of any default in the payment of a debt or the performance of an obligation by a member of the forces under such agreement. Section 118 restricts the compulsory acquisition of land owned by a member of the forces. Section 119 gives certain relief under bills of sale and hire purchase agreements made by a member of the forces prior to his becoming engaged on war service. There are other provisions giving relief, or enabling the court to give relief, but the ones I have mentioned are the most important.

The protection given by some of the provisions I have mentioned extends, by virtue of section 120, for a maximum period of twelve months after the member ceased to be engaged on war service. In the case of protection against compulsory acquisition only, the protection extends for a maximum period of five years after cessation of war service. To be more accurate, it is for a period of five years, or a period equal to the period during which the member was engaged on war service, whichever is the less. Honorable members will see later on that this period of five years is of some importance in relation to this bill.

The only servicemen who are still on war service within the meaning of Part X. of the act are those who enlisted for full-time service in the Defence Force before the technical end of the 1939-45 war, namely 28th April, 1952, when the Peace Treaty with Japan came into operation. Members of the forces in Korea who did not come within the category first mentioned ceased to be engaged on war service as from 20th April, 1956, by virtue of Statutory Rules 1956, Number 33; and similarly with members of the forces in Malaya on 1st September, 1957, by virtue of Statutory Rules 1956, Number 100. Honorable members will recall that the latter date was the date of commencement of the Repatriation (Far East Strategic Reserve) Act 1956, which was passed following the change of status of our forces in Malaya from an operational force to that of a strategic reserve.

Any benefits to which the persons who had served in Korea or Malaya might, by reason of that service, still be entitled will, with one exception, cease in the ordinary way under the existing legislation on 1st September, 1958, the proposed date of commencement of this amending legislation. That one exception is the continuing protection conferred by sections 118 and 120 of the act, to which I have referred, for a maximum period of five years against compulsory acquisition of land owned by a member or former member of the forces. Even this protection is a qualified one, as section 118 enables the land to be acquired notwithstanding objections by the owner, if the Attorney-General consents to the acquisition. It is significant that only one application for the Attorney-General’s consent has been received in the last five or six years - and in that case consent to acquire was given. So it will be seen that, in any case, the provision appears to be a dead letter. Whether this is so because very few of the present members of the forces own land sought to be resumed, or whether resuming authorities are no longer complying with the act, is, of course, impossible to ascertain. In any case, the repeal of this provision will relieve resuming bodies from the necessity of inquiring in each case whether the owner of the land is a serviceman or ex-serviceman and, if so, whether he claims protection under section 118, an administrative process which in the aggregate must be quite an additional expense to the community. I must add that it is probable that there are very few, if any, servicemen or exservicemen of the Korea or Malaya Forces, other than the permanent men to whom I will refer in a moment, who are still entitled to any protection under section 118.

I referred earlier to a group of servicemen who enlisted for service before 28th April, 1952, who are still on war service within the meaning of Part X. As the legislation stands, these persons will continue to be technically engaged on war service and the benefits of Part X. will run on for them indefinitely. I am informed that there are approximately 8,500 of these servicemen in the Army, approximately 4,750 in the Navy, and the same number, about 4,750, in the Air Force. It was, of course, never intended that these persons should continue to enjoy the benefits indefinitely, and they will lose these benefits upon the act coming into operation. It is important to note that the protection given by Part X. (other than section 118) is in relation to transactions entered into before the member became engaged on war service, that is, at the latest before 28th April, 1952.

The war service moratorium provisions had their origin in the National Security (War Service Moratorium) Regulations, which were first made in 1940. These Regulations were passed at a time of emergency for the benefit of members of the forces, who had little, if any, opportunity on enlistment to deal with their private affairs in a proper manner. Moreover, many servicemen who had entered into financial commitments on the basis of their peace-time salaries found that their service salaries were inadequate to meet their commitments. To-day, rates of pay for servicemen are comparable with civilian wages, and those servicemen who would still be entitled on 1st September, 1958, to some protection, which I remind members can only be protection in relation to obligations incurred, at the latest, before 28th April, 1952, will have had many years to put their affairs into order.

The bill may appear a somewhat complicated one to achieve what is apparently a simple purpose. The majority of its provisions, however, are necessary to save any injustice being done to any person by the repeal of the provisions of Part X. In this connexion, I draw the attention of honorable members particularly to clause 5, which deals with postponement of mortgage payments and is designed to prevent a member suddenly becoming liable to pay a number of instalments at once when the act comes into operation. The relevant provisions of section 109 are continued in force by this clause to avoid this happening. Again I point out that it is highly probable that there are very few, if any, persons who are still enjoying any protection under section 109.

I commend this bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1008


Second Reading

Debate resumed (vide page 1007).


.- The amount of money that is to be allocated under this bill was, I believe, a compromise that came out of the meeting of the Australian Loan Council on 13th February last. On that date, as honorable members will recall, a meeting of the Loan Council was sandwiched between the arrival and departure of the Prime Minister of the United Kingdom and the arrival of the Queen Mother, Queen Elizabeth. Therefore, that Loan Council meeting was the subject of comparatively little discussion in the press. The Premiers and the Treasurer (Sir Arthur Fadden) met in this chamber for one day. Before the meeting of the Loan Council, the press indicated in many reports that it expected the meeting of the council would be remarkably short. That was not a matter for surprise in view of the impending visit of the Queen Mother. In fact, the meeting was concluded in one day, and I believe that it was the shortest meeting of the Loan Council that has been held in the post-war years.

The representatives of the States attended the meeting with two objects in mind. They wanted a larger amount of loan money for the remainder of the year, and they wanted approval to raise it. Apparently, they believed they could raise the money. Secondly, they wanted an allocation from the Commonwealth of money for specific purposes. The Commonwealth Government wanted to retain its “ hold inflation “ campaign. There is no doubt about that. Therefore, it must have looked at all the proposals of the States with that slant. The Commonwealth, in accordance with that attitude, wanted to restrict the right of the States to raise further loan moneys. If any further moneys were to be raised as a result of the Loan Council meeting, the Commonwealth Government wished them to be applied to housing.

As a result of that meeting of the Loan Council, approval was granted for the raising of £3,000,000 of extra loan money in the remainder of the financial year. Undoubtedly, the Commonwealth Government had in mind at that time the preservation of the probability that it would be able to carry out adequately its loan conversion programme, but on this occasion - and I believe it was rare - the State Premiers came together in unanimity and outvoted the Commonwealth. The Commonwealth was left in a difficult situation and reached a compromise. It agreed to make a direct grant of £5,000,000 from Consolidated Revenue. As honorable members are well aware, £1,000,000 of the £5,000,000 was allocated equally between Queensland and New South Wales to alleviate the extra- ordinary economic conditions that had resulted in those two States from drought. It was agreed that the other £4,000,000 should be allocated according to the usual formula which had been applied to tax re-imbursements for the whole of the financial year. As a result of the application of that formula, the amount that each State had to receive, and the extra £500,000 to Queensland and New South Wales, appear in the schedule to the bill.

The Commonwealth Government at that time sought to force upon the State governments the proposition that they should devote all the money referred to in the bill to housing. However, the States refused that request and the Commonwealth Government acknowledged that it had no legal right to insist upon it. Therefore, it withdrew its request. Accordingly, the States have received this money - just as they received big lump sums earlier in the year - on the basis that the money could be applied by them to any purpose they desired. In other words, the sovereignty of the States in the spending of the money which came into their possession was recognized. I believe that the majority of the States do, in fact, apply a great proportion of their money to housing. Housing is a problem, and I do not intend the word to convey any greater significance than its ordinary meaning. It is a problem, and so far as we can see it will be a problem for many years to come. A young age group is coming on in Australia and the rate of marriages will grow tremendously. There will be a great demand for housing and it is incumbent upon all governmental authorities and traditional lending agencies to reduce as much as possible the initial deposit that is necessary for the purchase of a house. Currently, the amount of purchase price for the house is not greatly out of step with the normal structure of costs, but the initial deposit of £1,000 to £1,500 operates greatly to the diminution of the number of houses available to young people who are seeking to own a home.

In association with housing, there are many ancillary services such as water, sewerage and education. In those fields, the State governments are sovereign in accordance with the Constitution. They have the right to determine in what manner the money shall be spent, to plan projects and carry them out to completion. There are few things in our lives which are more important to us than housing, water, sewerage, education and hospitalization. In all those factors, the State governments retain absolute sovereignty, yet they have no sovereignty to collect the major part of the money which is expended on the running of those great public services.

Under the terms of this bill £1,061,169 is to be made available to Victoria. In addition, of the £3,000,000 extra loan money authorized to be raised, Victoria is to receive authority to raise £603,000. Victoria wished to raise much more than that by additional loans. Indeed, an important point is that, at the date of the Australian Loan Council meeting, Victoria, with a target of £34,000,000 loan raising, had raised all but £6,000,000 with almost four months of the financial year yet to run. So the raising of the additional money ought to present no real problem at all. It surely pointed to the fact that Victoria’s claim for authority to raise a much larger loan allocation had some merit. Apparently, as a result of the Australian Loan Council meeting, the Victorian Government was able to allocate £2,000,000 to a water scheme at Tallarook immediately after the meeting. An additional amount of money was also applied for sewerage services in the outer metropolitan suburbs of Melbourne. With the rapid spread of housing, all States currently have a big problem in providing sewerage services. Victoria is doing what it can to meet this problem, but, of course, a big demand still exists. If the Victorian Government does not provide the sewerage that is demanded by the people, then it is the Victorian Government that receives the criticism. Indeed, with an election imminent, it could receive worse than criticism. Yet that Government has no right to raise money other than that approved by the Australian Loan Council, or money that it receives as tax reimbursements from the Commonwealth.

At the time of the Australian Loan Council meeting at which the £5,000,000 was allocated, there was no real unemployment problem anywhere in Australia. If there were such a problem, the State least affected was Victoria. At that time, I believe that the only unemployment in Vic toria was amongst unskilled men. Some semi-skilled men engaged in gang-type work may have been affected, but generally speaking only unskilled men were unemployed. No skilled or semi-skilled men were affected by unemployment to any degree. In order to meet the problem of unskilled unemployment, the Victorian Government made an additional allocation to local government authorities to enable them to extend their projects. By this act alone, work was provided for some 500 unskilled men. If Victoria had received a greater amount of money under this bill, it would have been able to reduce its deficit and to release a corresponding amount of loan funds for public works. I believe that the case put by the Victorian Government for an increased sum was a very good one. As honorable members know, and as the people of Australia generally know, Victoria has suffered most adversely from the tax distribution formula in the past. However, under the formula we now for the first time in this financial year reach a distribution of tax moneys on the adjusted population scale which will, to a considerable extent, alleviate Victoria’s grave disadvantages.

The whole problem of StateCommonwealth financial relations is one which must receive a good deal of the attention of this House anr! of a!! legislatures throughout Australia. The framers of the Constitutionthis is shown without any doubt by the conventions which preceded federation - clearly elected to adopt a constitution in which the States would remain sovereign within the normal fields of legislation and in which only those matters which were truly of a Commonwealth type would be reserved to the Commonwealth. It was never at any time thought that the Commonwealth would achieve the dominance in financial affairs that it has. The next major step in financial arrangements was the loans agreement referendum. We all know the procedure that resulted from that referendum; it exists to-day. This was one of the only three occasions on which the people agreed to referendum proposals. Looking back from this distance, one might reasonably say that that amendment to the Constitution was passed because so few people really understood it, and because it was supported by all major political parties. However, at that time, it could not have been in anybody’s wildest dreams that the passage of that amendment would create a loan council which would form a complement to a uniform tax procedure that would give the Commonwealth undoubted and unrivalled dominance in the financial affairs of Australia.

The loans agreement amendment to the Constitution was passed at the time of a truly great and tragic event in Australia’s history - the great depression. The next truly great event in Australia’s history was the war of 1939-45. During that period, uniform taxation was adopted. Uniform taxation was tested before the High Court even during the war - I think in 1943. The High Court found that the legislation was valid and did not rest on the defence power. Only last year, Victoria challenged the legislation and, in my opinion, the High Court in its decision then put the matter of uniform taxation firmly in the political arena. It said that the Commonwealth has the right to impose uniform taxation, but not an exclusive right. Therefore, the Commonwealth could vacate this field at any time. Arising out of two great events in Australia’s history have come the two important matters upon which the dominance of the Commonwealth in financial affairs rests - the constitutional amendment and the introduction of uniform taxation.

The attack on the uniform tax laws last year forced New South Wales to join Victoria as a disputant. I do not believe that New South Wales at any time really hoped that the High Court would declare the legislation invalid. There is no doubt in my mind that inherent in the policies of the socialist parties of Australia is the desire to bring this Australian nation under a completely unified form of government. They wish to abandon completely the federal concept. I am certain, therefore, that New South Wales joined Victoria in the application to the High Court with tongue in cheek.

The High Court having established the right of the Commonwealth and, in my view, at the same time having established that that right is not an exclusive right, what is the answer? In the past, the Commonwealth has offered to vacate the exclusive uniform tax field, but Victoria is not prepared to accept responsibility for forcing this course to be adopted. Of course, we have the mendicant States and New South Wales has its Labour socialist government. At the time of the challenge to the legislation before the High Court, Queensland also had a Labour socialist government. The only State that really wants to assert its sovereignty, reserved to it under the Constitution, is Victoria. It is not surprising that, with this sort of progressive viewpoint, Victoria has been the State to develop so tremendously in the last few years.

I think it important to state that the Commonwealth Government is not inherently more responsible than the State governments. After all, the members of this House could quite easily have been members of State parliaments. Indeed, some of them were members of State parliaments and, looking at one in particular, I cannot imagine that his sense of responsibility has grown since he was in the State parliament. I say that not because I feel that there was room for growth but because I am sure that he had the acme of responsibility at that time. So, there is no reason to believe that members of this House or of the Government are inherently more responsible than the members of the Victorian legislature or of Mr. Bolte’s Government. It is important to remember that the same electors elect representatives to the State parliament and to the Federal parliament. The same political parties organize and endorse candidates for both Federal and State electorates. With the methods of selection, which are well known to honorable members, it is a matter of chance, generally speaking, whether a man becomes a member of this House or of a State legislature. So I make a plea, on behalf of Victoria, the State which is most adversely affected by uniform taxation and by Commonwealth-State financial relations generally, of the adoption of a very courageous approach to this problem. I know that we are told that the Constitution Review Committee is currently considering the problem; but, without wishing to reflect in any way on the members of the committee or their work, I feel that the subject of financial relations is scarcely something o:i which that committee, as it now operates, would necessarily be competent to make a decision acceptable to the Australian people and the various legislatures. I think there must be a more direct approach to the problem.

I believe that the Commonwealth ought to make it perfectly clear to the States that within a certain time it will again place on the States the responsibilities that the Constitution envisages them as accepting. I know that some of the States will show great reluctance to accept these responsibilities, but that will not be the case in Victoria, where the move would be regarded as a heartening encouragement to all the Victorian people with the prospect of a fairer future following the return of proper responsibility to the State legislature. The Victorian Government has the responsibility for providing public services generally, such as sewerage, hospitals and transport services, and should have the power to raise such money as it requires to meet these obligations.

An honorable member accused me of shadow boxing. I do not regard this as shadow boxing. I regard increased sovereignty for the Victorian Government as an absolute right of the Victorian people, and the sooner it is achieved the better. I hope there will never arise an occasion when the Victorian people will find themselves in the same position as that in which the people of Western Australia found themselves. The people of that State sent representatives to London to petition the Crown to permit them to secede from the Commonwealth of Australia.

Mr Leslie:

– That was only because of the treatment we got from Victoria.


– No State in the Commonwealth has been treated more generously than Western Australia. Perhaps it might be a good thing if the people of Victoria sent representatives to London to present to the Queen a petition asking to be allowed to secede, because Victoria might thereafter get from the Commonwealth the generous treatment and sympathy which the people of Western Australia get from it now.

I believe that the reluctance of the majority of the States to take over their proper responsibilities is an ad hoc attitude. The people of Victoria, led by a sound government under Mr. Bolte have, as a result of a proper application of parliamentary responsibility, vigour and determination, achieved tremendous development in a short time. The majority of the Australian people will agree that Victoria has made tremendous advances.

The honorable member for Mitchell (Mr. Wheeler) made a suggestion which, to some extent, received the plaudits of certain honorable members. He paid great tribute to the Public Accounts Committee and made a suggestion which I regard as extraordinary. His suggestion was that, because the Commonwealth grants money to the States, they should permit the Commonwealth Public Accounts Committee to investigate their expenditures. From reports I have read and heard of the New South Wales Government, that government seems to need some supervision; but certainly the Victorian Government needs no supervision. Despite its limited resources and the disabilities from which it suffers in its financial relations with the Commonwealth, the Victorian Government has achieved more than any other State could hope to achieve. I need only point to the achievements of the Victorian Country Roads Board to support my contention. I challenge anybody in this House to name a more efficient body. Visitors to Victoria are presented every day with examples of the board’s efficiency.

The suggestion that the Public Accounts Committee should investigate the affairs of such an efficient body leaves me in a state of great agitation, because it was never the intention that the State governments should be in any way subject to the Commonwealth Government within those fields of administrative responsibility which were reserved specifically to them in the Constitution. I presume that the suggestion made by the honorable member for Mitchell would apply to all legislative and administrative fields. I can understand that the New South Wales Government is in such a shocking condition that the people of that State are looking for some way to clear up the mess and, knowing the reputation of the Public Accounts Committee, the honorable member for Mitchell could think of no better way than the one he suggested. But let the suggestion go no further; or, if it does go further, for goodness sake exclude Victoria from the plan.

Send the committee to investigate the affairs of those Labour governments which are unable to account for themselves satisfactorily to their parliaments or to their people but which, by a curious system of gerrymandering of electorates, have remained in power for so long; but do not let there be any interference with a sound, solid government like Bolte’s Government in Victoria.


.- The honorable member for Bruce (Mr. Snedden) asked that there should be no interference by the Commonwealth with sound government in Victoria. If the honorable gentleman is so keen on having no interference with the Victorian Government why did he not express that opinion when Victoria was under the sound government of Mr. John Cain? The Bolte Government in Victoria has a deficit of something like £4,000,000. Compare that deficit with the credit balance left by John Cain when he went out of office in Victoria, and the Bolte government does not come out so well.

However, I give the honorable member for Bruce credit for his account of how the paltry sum allocated by the Commonwealth to Victoria will be spent. The honorable gentleman mentioned in a vague way what has to be done to overcome sewerage deficiencies in Melbourne. I am in a position to tell him about that, but first I want to say that although the Opposition does not oppose the bill it does disagree with the arguments advanced by Government speakers about the benefits that the States will gain from the money to be provided under the legislation. That money is being provided to meet a crisis which has been with us for some time, and is still with us. Why would the Government make extra allocations to the States, and municipal and semi-government institutions, if there were not a crisis? Victoria is to receive an additional £1,061,000 for various State instrumentalities. As I said before, the Victorian Government has a deficit of nearly £4,000,000, so if the entire sum to be allocated to Victoria under this bill were taken over by the State Treasury it would not, to any appreciable degree, bridge the insolvency which has been a feature of the Victorian administration since the Bolte Government took office.

I agree with honorable members who contend that never enough money is provided for State enterprises. That contention is perfectly correct. It is true to say that progress cannot be stopped, because development and progress go hand in hand; but it is another matter to turn a blind eye to apparent deficiencies and, by inaction, allow things to drift until a crisis appears. I suggest that that is precisely what this Government has done by its retrogade approach to the many problems that face Australia to-day. Speakers on the Government side have gone to some length to justify the meagre amounts allowed to meet this crisis. I use the word “ crisis “ purposely because, as I said in the first place, if a crisis had not been with us, it would not have been necessary for the Government to take the action that it did. Until the preceding speaker on the Government side concluded his speech I had not heard one honorable member opposite say how the money was to be spent in the State he represented. Honorable members on the Government side will possibly claim, as the Premier of Victoria claims, that the allocation of extra finance for their respective States will provide the answer to all the problems confronting them. But as I have said, I am prepared to give a few practical examples of how infinitesimal the effect of this allocation will be.

Let us look at the undertakings of the Melbourne and Metropolitan Board of Works and the problems with which it is confronted due to the tight credit policy of this Government. Apart from a terrific lag in drainage works, there are, in the metropolis of Melbourne, 67,000 homes without sewerage. Little promise can be held out to the occupiers of those dwellings that any change will be made from the ancient, outmoded sanitary facilities to the modern hygienic system to which they are justly entitled. There is a lag of 400 miles of water reticulation and as a result of this and the inability of the board to carry out urgent drainage works, streams, creeks and drainage basins are becoming vast reservoirs of filth and disease owing to the sewerage sludge flowing into them from the unsewered homes existing in every suburb of Melbourne.

The Premier of Victoria came out with a startling announcement that the board would receive the magnificent sum of £350,000. According to Mr. Bolte’s statement to the press, this money would be used to solve all the sewerage, drainage and water problems in the metropolis of Melbourne. He went so far as to say that the application of this money would prevent further water restrictions in those areas which have been affected over the years, whether the seasons have been wet or dry. One particular job which the Premier referred to was that of the north-western water main, a new project which will terminate in my electorate. This work should have been started years ago but it was commenced only because of the extremely dangerous condition of the water supply to the City of Footscray. It was listed in the schedule of works to be undertaken by the Melbourne and Metropolitan Board of Works long before Mr. Bolte received this extra money from this Government. This new water supply will serve Williamstown and Sunshine as well. As the cost of it is estimated at £1,500,000, honorable members can gain some idea of how much help £350,000 will provide towards curing this ill in the City of Melbourne. Most probably that scheme will actually cost a good deal more. It is not hard to judge how far £350,000 will go towards reducing the present number of 67,000 unsewered homes, 400 miles of water reticulation and the lag in drainage works in suburbia. If honorable members add to all this the fact that the Melbourne and Metropolitan Board of Works is £17,000,000 behind in its loan schedules, due entirely to the tight credit policy of this Government, they will perhaps obtain a clear picture of the inadequacy of this grant to meet the needs of Victoria.

The problems of the Melbourne and Metropolitan Board of Works and the amount of money needed to meet them, emphasize how empty and blatant are the claims of the Victorian Premier. How far will it go towards meeting the growing need for road modernization? The answer is that, without doubt, this allocation would only scratch the surface of the roads problem of Victoria. Figures and facts clearly indicate that in order to overcome them and bring its highways up to modern requirements, the State would have to spend £10,000,000 a year over the next ten years. This figure is only an estimate because the future trends in road transport are difficult to visualize in respect of the size and weight of vehicles, and probably a much greater sum will have to be provided to meet the new problems that will arise.

What effect will this grant have in overcoming the housing shortage? We are informed that £400,000 is to be allocated for housing. This amount may sound quite handsome, but when it is divided to meet the cost of individual housing units at approximately £4,000, the sum allocated would give the 203 municipalities in Victoria one house each. How far will it go to help the Victorian Housing Commission which, as a result of the alteration in the Commonwealth and State Housing Agreement made by this Government, has been compelled to cut its programme from 4,152 housing units to a net total of 2,338 units for 1956-57? How far will it go towards providing homes for the 17,000 people demanding them from the Victorian Housing Commission? How far will it help to overcome the appalling shortage of 32,000 homes throughout Victoria?

The Government tries to tell us that all is well in the education field. But what has it to say about “ operation bungle “ which occurred in Victoria at the beginning of the school term in February of this year? Mr. Bolte had informed the parents, through the press, that children of four and a half years of age would be admitted to schools which were already grossly overcrowded. He had to admit that the accommodation was not sufficient to receive them. But, in his typical fashion, according to a report in the Melbourne “ Age “ of 4th February, 1958, he blamed the Education Department and said that it was responsible because it had given no direction in this matter. The plain truth is that Victoria is bankrupt and the Bolte Government is resting on the laurels of the Cain Labour Government, whose record in the education field is unsurpassed in Victoria.

I desire now to refer to the empty gesture of the Government towards the municipalities, authorizing them to borrow an extra £3,000,000 during this financial year. The preceding speaker on the Government side said that the money would go to municipalities in Victoria to enable them to employ an additional 500 men. What the honorable member did not say was that the municipalities in general have not sufficient money to employ extra men and are not likely to be able to get it. The plain fact of the matter is that the councils have long since declared their estimates. It is true to say that of all semigovernmental instrumentalities, local government bodies have been embarrassed most by the tight credit policy of this Government during the last five years. The demands that increased population have made on local government are such that they cannot be met from general revenue.

This is emphasized by the inability of large numbers of councils to provide full health services and their inability to provide kindergartens, libraries and other services which the ratepayers demand that they provide. The deterioration of roads and footpaths can be seen everywhere. These are municipal assets which will cost thousands of pounds to restore. Footscray, which is the main city in my electorate, with a population of 60,000, over the last eight years has not been able to obtain sufficient money to carry out capital works. Since 1956, its lag in loan funds has increased to £300,000. In other words, the amount given to the Melbourne and Metropolitan Board of Works could be used, without difficulty, by this one council to meet its requirements. Even then Footscray would be far short of its requirements that are essential in a city of its magnitude.

If the loans for State utilities are undersubscribed, what chance have the councils to obtain money at 51 per cent, interest, when those who formerly subscribed to these loans can get 10 per cent, and 12 per cent, from the money lending institutions? One cannot fight a recession with words. Pounds are needed, not pence. The money which the Government has handed out to the States in its latest allocation can only be regarded as an election sop - a gesture to hoodwink the people into thinking all is well and that the future is rosy.

The break-down in State departments and semi-government departments highlights the tragic state of affairs existing to-day and is a pattern of events for the future. No government can turn a blind eye to what is happening overseas. There is unemployment in the United States of America, Canada, Great Britain and Japan. In America, it is estimated that the unem ployed will reach 7,000,000 by the end of the year. Yet we are told that depression talk is nonsense. We are told that talk of depression by the Australian Labour party is psychological warfare. How can Australia escape this menace unless the Government is prepared to come to grips with our economic problems in a far more realistic manner than that in which it is dealing with the crisis facing the nation at the present time?


.- Members of the Opposition have indicated that they will not oppose the legislation now before the chamber. They have taken the opportunity of treating the debate as a supply debate and of roaming around not only Comonwealth-State financial arrangements, but also purely State spheres such as housing, education, roads and a host of other subjects. This legislation provides for an extra £5,000,000 to be made available to the States as a result of conditions that have obtained, more particularly since the beginning of this year, when we started to feel the real effects of the drought which affected this country most disastrously in New South Wales and Queensland but also to a lesser degree in the other States. The Government, in addition to making the sum of £5,000,000 available to the States, has also arranged that local government authorities, with a view to creating further employment, should raise loan funds to the extent of £3,000,000.

As I have already indicated, members of the Opposition have used this debate as an opportunity to tackle the financial relationships between the States and the Commonwealth. Surely they must all be aware that only within the last few years have the State Premiers assisted the Commonwealth in raising money to do the work that they have had to do in their own spheres. I say that that is so, regardless of the political persuasion of the State Governments concerned. Since this Government came to office the States have had a complete use of available loan moneys while the Commonwealth has paid for all its works out of revenue, with one or two exceptions. One exception is war service land settlement. But, ultimately, that activity is more to the advantage of the State governments than the Commonwealth Government.

As I have said, it is only within the last few years that any of the State Premiers have assisted the Australian Loan Council and the Commonwealth authorities in the raising of loan funds. When the loan market has failed to meet the approved borrowing programme, the Commonwealth Government has provided the rest of the money needed from its Consolidated Revenue. The States have raised objection to the fact that they have had to pay interest on this money while the Commonwealth has been paying for its works out of revenue, free of interest. It has been explained time and time again that there is a justifiable reason for this practice. I say again that each and every State government, regardless of its politics, is continually complaining that the Commonwealth is depriving it of this, that, or something else. They know quite well the difficulty that there is in raising money to carry out works programmes.

No consideration has been shown by the States for the extra taxation that the Commonwealth Government is forced to impose on the people in order to help the State governments with their works. The Commonwealth has received no thanks. The States only complain, complain, and complain. Except for going on the hustings, speaking over the radio, or putting advertisements in the press, members of the State governments have been doing nothing to assist in loan raising- Yet, they have had a glorious opportunity to do something to ensure that more money will be channelled into Commonwealth loans and so provide them with more funds to carry out their works programmes.

Not one State government has done anything to correct the mad trend of hire purchase to-day. I am not opposed to the system of hire purchase. Never would I oppose the system, because I recognize that it is the poor man’s banking system. But there is a big difference between hire purchase as a system and hire purchase as it is being carried on to-day, with hirepurchase companies inserting grandiose advertisements offering high rates of interest for money. Obviously, they are charging even higher rates of interest for accommodation m respect of the goods supplied. Honorable members may open the newspapers any day of the week and see that a new mushroom type of hire-purchase company has come to town, offering 10 per cent, for money which the lenders can get back on fourteen days’ notice. Any one who invests in those companies runs a risk. I know what I would do about them.

The States know full well that money is going into hire-purchase companies- If the price of wool were to drop a little tomorrow those companies would not be very happy. A lot of people do not realize these things. They may understand them when it is too late. But while the money is flowing in to these companies some people are getting fat as a result. The State governments are not doing a thing to correct that trend with a view to getting some of that money into loans which would give them the opportunity of carrying out productive works, of keeping their own people employed, and of providing amenities and services for their people.

The honorable member for Gellibrand (Mr. Mclvor) spoke about sewerage in Victoria. Why does the Victorian Government not do something about this? I realize that it is no use any government acting on its own in this respect. The States must act in unison or there may be chaos. But I have not heard of any move that has been made by any of them. The Commonwealth has asked the States, at various meetings of the Premiers conference and the Australian Loan Council, to give some thought to transferring to the Commonwealth their powers to deal with hire purchase and capital issues. The States have never yet measured up to the task. They have made no move, even to the extent of allowing the Commonwealth to look into the matter, not, I repeat, with any idea of abolishing the hire-purchase system, but of giving at least some control and some measure of reasonable stability.

I say, therefore, that while the States continue to pursue the policy that they have been following of late, and taking no action to solve the problems, there is very little room for them to criticize any Commonwealth Government because of the alleged paucity of loan funds or other funds that are made available to them for their works programmes.

Let us now look at the other side of the picture, and consider the other avenue through which the States get money from the Commonwealth. I refer to tax reimbursements. We all know that a certain formula is laid down by which the aggregate amount available to the States is arrived at. The size of the turkey, or the pudding, having been arrived at in this way, another formula is then used for cutting it up amongst the States. We all know of the discussions that took place between the States and Mr. Chifley’s Labour Government between 1945 and 1947, and we know that even after those discussions the State Premiers could not make up their minds. They would make one suggestion to-day, change it to-morrow, and go back to something else the next day. But finally a formula was worked out with which not one State Premier disagreed. At present the formula is based on an amount of £45,000,000, and, taking the year 1957-58 as an example, the amount of £45,000,000 is multiplied by the average earnings of the work force as at 1st July, 1957, divided by the average earnings as at 1st July, 1947. The amount thus obtained is multiplied by the total population as at 1st July, 1957, divided by the total population as at 1st July, 1947. Not one Premier objected to that system. In fact they realized at the time that they would be pretty well off, because in a matter of a couple of years the base figure was increased from £40,000,000 to £45,000,000.

It is obvious that the formula takes due consideration of any inflationary effects, because average earnings form an integral part of the formula, and earnings are governed, to a great extent, by the capacity of industry to pay, the capacity of industry to pay being in turn being governed by general productivity. The last item in the formula takes account of any growth in population. In this way the aggregate amount available to the States is decided upon. This amount is then divided among the States on what is called the adjusted population basis. In actual fact, therefore, the States are fully covered in two ways. Nevertheless, every year the Premiers claim that they are not getting enough money, despite the fact that this Government, realizing the problems that the States have been facing, has made supplementary grants. Speaking from memory, I believe that the supplementary grants this year amount to about £30,000,000. The figure may be slightly less than that, but I know that the total of tax reimbursements and supplementary grants is £190,000,000.

The act which makes provision for these grants to the States contains a section which provides that if at any time after the 30th June, 1953, any State requests the Commonwealth to call a conference of the States to discuss the formula, the Commonwealth Government shall call that conference. 1 repeat those last words - the Commonwealth Government shall call that conference. This provision is in section 10 of the act. To the best of my information, despite all the noise that we have heard, and all the froth and bubble, both in the press and otherwise, and despite all the haranguing of the Commonwealth by all kinds of State governments, not one State has made a request to the Commonwealth to have the formula reconsidered. I ask, therefore: Where is the sincerity behind all the squealing and yelling and bawling about the horrible Commonwealth that treats the States so badly? The State Premiers, Mr. Cahill, Mr. Bolte, Mr. Nicklin, Mr. Hawke and the others, all have an opportunity, if they wish to avail themselves of it, to have the formula reviewed. Even if they get nowhere with such a review, at least their request would be an indication of their sincerity and the fact that they really believe the formula should be altered. They have had almost five years, since 30th June, 1953, to make an application, and they have not done so.

What would any sensible person deduce from these facts? I think I would be right in saying that we must assume that the States consider themselves reasonably well off at any rate - I will be magnanimous to that extent - and say to themselves, “ What is the use of kicking up a row? “ But immediately they return to their own States after a Loan Council meeting, we hear from the Premiers various complaints about uniform taxation, and statements to the effect that they cannot undertake certain works because of this big ugly bear, the Commonwealth. They say, “ We cannot build this classroom or that culvert”, putting the blame always on the Commonwealth - which, of course, is a very simple thing to do.

Then we hear people say, “Let us get away from the uniform taxation system “. No one in this House or in Australia would be more happy to see that come about than I would, but let us face realities. The

Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) some years ago offered to the States the opportunity to take over again their taxing powers. The States that have been most vocal in saying that they could provide certain services if they had taxing powers were the first to run away from the offer. Then some of the Premiers made some ridiculous and outlandish suggestion with regard to the matter. To cap it all. the under-treasurers of the States and Commonwealth Treasury officials met in conference in an attempt to devise some formula acceptable to the States. Those who attended the conference were professionals in the world of finance, and particularly government finance. What was the result? Nothing! Even the under-treasurers of the States could not get down to any formula or arrangement under which we could hand back to the States their taxing powers.

Then we heard people say, “ Let us just amend the act so that we can do soandso “. But it is not as easy as that. This is a most difficult problem. Take the position of Queensland at the present time, and consider what would happen there if the Commonwealth Government simply repealed the legislation covering tax reimbursements. I am not at present concerned with the kind of government in power in Queensland but rather with the particular problem that the State would face. Queensland would have to increase the taxes paid by the residents of that State to the tune of £8,000,000. Would the people be capable of meeting such an extra impost? It appears to me that it will not be as easy to get rid of the uniform taxation system as many people suggest.

During the course of this debate a suggestion was made that we should send a committee to inquire into the accounts of States. It was suggested that the Public Accounts Committee should be sent, but I do not think the honorable member who made the suggestion meant that this particular committee should do the job. However, he did suggest that such an investigation should be carried out by a similar committee. First of all, let me ask what would be the reaction of this or any other Commonwealth government if any State had the audacity to suggest that its officials should investigate Commonwealth expenditure. We must remember that the States have their sovereignty, and it is wrong for us even to think of an idea along these lines.

The suggestion has been made, by the Prime Minister and the Treasurer, not once but many times in the last few years, that section 96 of the Constitution is available to any State that complains about a shortage of money. There is nothing to prevent such a State from making a claim to the Commonwealth Grants Commission. Admittedly, Western Australia, South Australia and Tasmania - the three States commonly called the claimant States - make application to the Commonwealth Grants Commission for assistance, but Queensland, New South Wales and Victoria could make similar application whenever they felt inclined to do so. It is very clear, Mr. Acting Deputy Speaker, why they do not care to apply to the commission. It is because they know that, if they sought additional finance through the commission, it would have to inquire into their financial position, and some of those States would not like anybody to know how much they have salted away in trust funds, investments, and the like.

The larger States have plenty of opportunities to apply for extra money if they are prepared to face the facts. First, with respect to loans, they should do something about the hire-purchase system, which is rampant to-day, and try to channel some of the money being invested in hire purchase into Commonwealth loans, which arc mainly raised for State purposes. Secondly, they could do something about the formula under which tax reimbursements are made. Thirdly, if they consider that, even by doing these things, they will not get enough, they can apply to the Commonwealth Grants Commission for additional funds. If, like the other States, they have nothing to be afraid of, they will be prepared to let the commission examine their financial accounts.

Time and again, during this debate, we have heard the same old complaints. Who is to blame for the things complained of?

Mr Daly:

– This Government.


– Of course, I would expect such an interjection from the funny man from Grayndler. So far as concerns the State from which he comes, he can blame the Cahill Government.

Mr Daly:

– Wake up!


– That is something that the honorable member should do. 1 notice that he is now looking a little abashed. Throughout the present Commonwealth Government’s term of office,, it has made considerable financial contributions to New South Wales, as it has done to the other States. The States have these opportunities to obtain funds, but no doubt they will continue to growl. And heaven forbid that we should ever reach a stage at which we could not complain, as has happened in some other parts of the world! The States should at least indicate their willingness to help themselves, instead of merely growling continually, if they wish to take advantage of the assistance of the Commonwealth.

We have heard much about lagging works throughout Australia. I agree that, in some instances, there is a considerable lag. If my memory serves me right, at one stage, under the administration of a government led by Mr. Cahill’s immediate predecessor as Premier of New South Wales, the foundation stones laid throughout that State, if placed end to end, would have extended further than the mileage of standard-gauge railway in New South Wales.

Mr Daly:

– The honorable member is thinking of twenty years ago.


– I am content to deal with the period since 1950. The same New South Wales Premier came to a conference in Canberra with a works programme of something like £400,000,000. I recall very well the time when it was suggested to the State Premiers that some sort of a steering committee should be established to prepare an order of priority for the various works to be undertaken. Very soon after the suggestion had been made, the New South Wales Premier whom I have mentioned came to another Premiers conference and threw cold water upon the proposal. He said that he would not have anybody poking his nose into the New South Wales works programme. That shows how shallow are the principles of Labour supporters in this Parliament and in the States at times. Nobody wanted to poke his nose into the affairs of New South Wales. All that anybody wanted was an order of priority so that the projects undertaken could be equated with the available labour, materials, and finance. That was the only sensible thing to do. One Premier, however, despite the insecurity of his position - I am speaking of the gentleman who was at the time Premier of Victoria - took the wink, and had three water-supply projects undertaken in pretty quick time, to the great satisfaction of the people of Victoria. Had the proposal for the preparation of an order of priority been adopted when it was mooted - I think it was in 1951 or early 1952 - the problems that confront us to-day would not have been so serious as they are, because, in the intervening years, the States have been engaged in a constant tug-of-war for the available money, materials, and labour.

I am certain that many Opposition members know the facts. Some of them should give more serious thought to the problem of Commonwealth and State financial relations instead of continually thinking only of a few small projects in their own electorates. We must get down to tin tacks on this issue. I can say definitely that, between 1946 and 1949, the States did not receive from the Commonwealth the excellent co-operation in financial matters that they have received since 1949. Anybody who took an interest in these matters before 1949 will recall that the gentleman who was Prime Minister and Treasurer at the time answered “ No “ to every request for financial help made by the States. He told them that they had to stick to the tax reimbursement formula, and that they would get nothing more. However, since the present Government took office, the Commonwealth has completely vacated the loan market, and left it exclusively to the States. It has made supplementary grants in addition to the tax reimbursements, and any State that has found itself in difficulty, either through strikes or other causes, has been able to obtain special financial assistance. No Opposition member can deny that all the States, possibly with the exception of Tasmania, have, at some time or other, received £1,000,000 or £2,000,000 to help adjust their financial position in the event of a strike or some other happening. 1 appreciate the fact that Opposition members support this measure, but they would win more appreciation from many more people if they got down to tin tacks in the consideration of these problems. They should consider very carefully the problem of Commonwealth and State financial relations, and get to work among their own supporters in an endeavour to have this problem resolved by sound, commonsense discussion instead of haranguing their political opponents in the press and making all sorts of wild accusations that achieve nothing in the final analysis.


.- The honorable member for Canning (Mr. Hamilton) has not told the House whether he is satisfied with the distribution of this special States grant of £5,000,000. Instead, he has wandered through the labyrinth of the problems of Commonwealth and State financial relations. He has not said whether he considers that Western Australia is receiving the money it needs for its maximum development, and he has not addressed himself to the problems of production and development generally. Instead, he has tried, in a general way, to confuse the House by presenting to it a mixed-up statement of the functioning of the Financial Agreement, and his remarks have proved very disappointing.

The honorable member launched a critical attack on hire purchase. I suggest that he should take the matter up with his colleague, the Treasurer (Sir Arthur Fadden), who, under the Australian Constitution, is charged with the administration of the nation’s financial affairs. If the Treasurer and the Government were prepared to embark on a policy of capital issues control, they would have no trouble at all in dealing with the problem of hire purchase. The honorable member for Canning said that the States could have a conference called. What would be the use of calling a conference with this Government in power? When the Premiers come here to Australian Loan Council meetings and Premiers conferences, we hear the parrot cry from the Treasurer, “ Fantastic! Absurd! Take it or leave it. This is the decision of the Commonwealth Government, and the States will get not one penny more “. This behaviour has reduced the proceedings of the Australian Loan Council to a farce.

I did not rise this afternoon to address myself to this subject for the purpose of engaging in the wordy warfare that ensues from time to time between the Commonwealth and the States. I think it is time that this matter was approached on the basis of what is good for the nation and what is required by the people. Unfortunately, the well-being of the people seems to be the last consideration. There has been no survey of the needs of the people, of the new industries that ought to be developed, of the unemployment problem, or of the nation’s requirements generally. What is the purpose of bringing this measure forward now? What prompted the Government to make available to the States an additional £5,000,000?

Mr Leslie:

– Sheer generosity.


– I think that the answer can be found much nearer home. It is not generosity that has prompted the Government, but the concern of the people, expressed in the press and otherwise, at the lack of employment and the failure to do the outstanding jobs required by the people. If we want illustrations of this, let us examine an article in the issue of the “ Sydney Morning Herald “ on 18th March, 1958, which was about the time that this money was made available. The heading is “ Unemployment - Government ‘ fiddles ‘ with an explosive problem “ and the article reads -

There is a saying that Oppositions don’t win elections. Governments lose them.

Will the Menzies Government’s handling of the economic situation prove to be so bad that it will drive itself out of a job next December?

That passage is taken from a journal which we all know has given strong and vigorous support to the present administration. On 16th February, 1958, in the “ Sun-Herald “ Financial Review the following article appeared: -


Last week’s special grants by the Commonwealth Government will hardly reverse the downward employment trend. A £5-million grant to be spread over all States is no generous handout. It will not go far in assisting the deplorable housing situation. Neither will the additional £3-million for local authority borrowing programmes work wonders. The main advantage may be in the fact that the Government seems to have recognized the need for stimulating building and checking the drift in unemployment.

This is encouraging. Certainly, this attitude raises hopes for some relaxations in the Federal Budget this year.

That comment clearly shows that the measure was not the product of the generous spirit of the Treasurer or the Government but of a realization of the present needs of the nation, which ought to have been recognized many months ago.

I have before me the twenty-ninth annual report of the Auditor-General, made pursuant to section 17 of the Bankruptcy Act 1924-1955. Despite the speech last night of the Prime Minister (Mr. Menzies) and his soothing syrup to the nation in the statement that all is well at the present time, the figures that I propose to read are truly alarming. There were no fewer than 1,200 bankruptcies last year, and this was the highest number since 1931-32, in the middepression period. If that does not shake Government supporters out of their complacency over current conditions, it ought to do so. But the honorable member for Moore speaks about the generosity of the Administration!

I want to be on record as saying that I believe that this Administration will deal with its problems now by releasing credit. Because this is an election year, the money will flow. This year’s Budget will be brought forward early. I ask honorable members and the nation to consider what will happen immediately after the election, with wool prices falling as they are now falling, with metal prices continuing to fall, and with shipping being tied up because there is not sufficient merchandise to be carried between countries. I ask members of the Australian Country party to consider the serious difficulties facing primary industries because of toppling prices in the world’s markets.

Precious little is being done by this Administration to meet the real problems besetting the nation at present. I put it to the Government that a need now exists for it to face realities and try to measure the amount of money necessary to ensure full employment for the people. In considering unemployment I have ever so many reasons to remember the real problems affecting the people of my own district. Some of those persons who were dismissed from the Commonwealth Small Arms Factory at Lithgow in October, 1956, remain unemployed at the present time. I have a cutting from the “Lithgow Mercury” of 12th February, 1958, which is headed “Tragedy of Juvenile Unemployment “. It records that a local magistrate commented of the seriousness of unemployment amongst youths in our district. That is a problem which this Government has not faced. However, one may try to analyse the real interests of the Government, one is driven to the conclusion that the Government is prompted more by electoral considerations than by the needs of the people.

The States have their rights, and I was somewhat amazed to hear the honorable member for Mitchell (Mr. Wheeler) make the outlandish and extraordinary statement that the Public Accounts Committee should inquire into the affairs of a sovereign State of the Commonwealth and police the spending of money by the New South Wales Government.

Mr Leslie:

– That is badly needed.


– I think that the interjection of the honorable member for Moore, a member of the Public Accounts Committee, ought to go on record. He said that this inquiry ought to be made. That statement should be remembered. I wonder what the distinguished chairman of the Public Accounts Committee thinks of that suggestion. He is a man who gave service as a lecturer in public administration at the University of Sydney. He would have a somewhat different view of the invasion of State fields and rights. It is astonishing to hear people who, in the ordinary course of events, profess to be great State right-ers, who believe in the States and are against unification, seeking an invasion of the sovereign domain of the States. I think that the people will remember the speech made by the honorable member for Mitchell for its attack upon the sovereign States and they will also recall the comment in this regard by a member of the Public Accounts Committee, the honorable member for Moore.

The making of this grant of £5,000,000 is a tardy recognition of the existence of a serious problem. The money is grudgingly given and it is scandalously inadequate to meet the needs of the people. An amount of £5,000,000 is being made available to the States, and an increase of £3,000,000 is being made in local government borrowings. The amount of £3,000,000 for local government could be spent in my electorate alone. A survey of my electorate reveals that there are many outstanding public works that the local government authority would be delighted to undertake if it were permitted to- raise the necessary finance by public loan. These bodies do not seek alms, but they would be prepared, to borrow the money.

I know of much valuable work that has been carried out in my own area by the New South Wales Government. The electrification of the railway line from Sydney to Lithgow has been completed, thus rendering a great service to the people of that area. The New South Wales Government is building a very large and valuable power station at Wallerawang. It has recently completed the Fish River water supply scheme at Oberon, and with the money obtained from this recent Commonwealth hand-out it proposes to get on with the work of providing sewerage in the townships of Springwood and Portland. Also, high schools are under construction at Lithgow and Katoomba. These works are evidence of the good faith of the New South Wales Government, but more money is required for schools, housing, hospitals, and local government needs such as water, sewerage, development of country roads, land settlement, and power generation. Money for these works can come only from this Government, which controls the raising of money.

The Commonwealth Government is empowered by the Constitution to control financial matters. Under uniform taxation the Commonwealth has authority to raise money, and I deplore the warfare that goes on between the States and the Commonwealth with regard to financial allocations. The attitude of the States that everything is wrong in Canberra should be disregarded in the same way as the attitude found in Canberra that every proposition made by the States should be rejected out of hand merely because it comes from a State. The people who vote at State elections are no less Australians than the people who vote at Commonwealth elections. In any event, whose money is h? The money has been collected from the people of Australia for the requirements of all Australians, irrespective of States and irrespective of whether the States have Liberal or Labour governments. The governments are responsible for the peace, order and good government of the various States. What should be the criterion in making grants and providing loans funds to the various States and local government authorities? I be lieve that the basic requirement should be the consideration of the availability of manpower and materals. If man-power and materials are available, then grants and loans should be made available so that essential works can be put into operation.

Not long ago, the Minister for Labour and National Service (Mr. Harold Holt) admitted that something like 70,000 people in Australia were unemployed. Honorable members on this side of the House are of the opinion that, taking into account rural workers, the number of unemployed in this country reached something like 100,000. There can be no reason for 100,000 people being unemployed in Australia. There is plenty of work for them to do, necessary and essential work, and I say to honorable members from New South Wales, and from some of the larger cities, that when the Metropolitan Water, Sewerage and Drainage Board has to compete with hirepurchase companies in the raising of funds to provide water and sewerage for the fast growing areas of New South Wales, it is a disgrace of the first order.

The honorable member for Parramatta (Sir Garfield Barwick), who represents one of the oldest cities in Australia, can hardly be happy when he remembers that vast areas of that historic city remain unsewered in this age of development. Money should be found for those things. There should be no unemployment in Australia while challenging works for the improvement of the health, progress and hygiene of the people call for attention. The provision of better roads, better means of transport, and general improvements for our country require attention, and in my view a plan should be devised to meet situations as they arise. We should not proceed in a piecemeal manner. If the Government faced its financial responsibilities and made more money available for the development of this country - to help the man on the land and to build more homes and schools - there would be less need to be concerned about finding funds such as are under discussion now. I believe that the Government should never again make funds available to the States in the way it has on this occasion, but that the Government should henceforth try to map out a policy so that the necessary funds will flow into the channels I have mentioned in order to keep our people at work and perform those works which require to be carried out.

In view of the fact that an attack has been made on the Labour Government of New South Wales, a government that has won the respect and support of the people of that State for its record of service over the years, I propose to read an extract from a statement made by the New South Wales Minister for Transport, Mr. Enticknap. This statement should satisfy honorable members regarding the case for New South Wales. I make it clear that I do not come into this House as a State-righter. I come here as a representative of a division of Australia, believing in the broad horizons of this country, but I believe that Australia cannot be developed unless the States are also developed, and that the States are not foreign dependencies but share with the Commonwealth the great work of trying to build this nation. The States, in their turn, serve the people, just as the Commonwealth serves the people. Mr. Enticknap said -

During the financial year ended last June the Commonwealth Government collected £1,098,736,000 in taxation from the Australian people. Of this huge amount New South Wales contributed £414,179,000, which is roughly twofifths of the total.

Approximately £84,000,000 came back to this State by way of tax reimbursements and special grants, so that New South Wales, which provided two-fifths of the revenue, had returned to it one-fifth of what it raised. Put plainly, of every £1 which the people of New South Wales gave in taxes, the State received from the Commonwealth 4s.

A breakdown of the figures gives further point to the claim that New South Wales is entitled to a much bigger share of what it pays to the Canberra Treasury.

Of £620,298,000 paid by the whole of Australia during 1956/57 in income taxation the New South Wales contribution was £218,770,000. Excise totalled £217,440,000 (New South Wales share £89,517,000), while in pay-roll taxation, a most unpopular levy with everybody except the Commonwealth Government, the Australian figure was £48,675,000, of which New South Wales provided £20,233,000. Sales tax accounted for £125,752,000 (New South Wales £50,183,000). These are the main sources of taxation.

The parsimony of the Federal Government towards New South Wales, and indeed towards all the States, makes well nigh impossible their task of rehabilitating their transport systems and balancing their budgets.

The problems facing New South Wales are no different from ‘those facing every other State, but I cite those .facts to indicate how much requires to be done. The local government -field has also been starved of finance. As I have said, in the case of the electorate I represent, I have had representations made to me and have sent them on to the responsible Minister seeking finance for the development of various areas, including the provision of sewerage, water supplies, bridges and roads. The people of those areas are prepared to borrow money for development, but they are unable to get it. Bathurst wanted to borrow about £300,000 to enhance its beauty as the old capital of western New South Wales, but it had great difficulty in obtaining the money. These local government authorities are not begging for money. They simply ask for the right to test the loan market and get an opportunity to raise money for the advancement of their localities.

I have a statement which was issued by the Local Government Association of New South Wales. It, too, deals with the problem of loan money and points out that although additional money would flow to local government as a result of the measure that is now before the House, the total amount that local government would be entitled to borrow this year would be only £14,400,000, whereas some years ago it was entitled to borrow £20,800,000. Nobody should prevent a local government authority from raising money for the purposes of development. I put it to the House that the case of local government authorities in this connexion is unanswerable because everything that is done by them helps to settle immigrants arriving in Australia. The immigrants need new homes, water supplies, sewerage, parks and playgrounds, libraries and health facilities. All those things must be found by local government authorities. Therefore, whilst we welcome the provision of an additional £5,000,000 as proposed in this bill, the amount is inadequate. It falls far short of what is required to satisfy the justifiable aims and aspirations of the people. It does not touch upon the major problem of developing Australia and, even if we accept the Government’s own figures, it will leave between 60,000 and 70,000 persons still searching for employment.


.- I rise to speak in this debate because I believe that the measure indicates that the Government does not appreciate sufficiently the trends in employment in Australia to-day and the degree of unemployment that actually exists. Under the bill, £5,000,000 is to be made available to the States to assist in the reduction of unemployment. From that stand-point, of course, the bill is an excellent measure. As was pointed out by the honorable member for Corangamite (Mr. Mackinnon) in this debate, in addition to the £5,000,000 I have mentioned, an amount of £15,000,000 is to be made available through the release of bank credit. The general impression seems to be that because of this measure and the other provision to which I have referred, the Government is doing all it possibly can to relieve unemployment and that this financial provision will put Australia back on the road to prosperity. Because all the trends in employment do not indicate that conditions are improving but are gradually worsening from a general economic viewpoint, I feel that I should have some words to say about unemployment and the insufficiency of the amount that is to be provided under this bill to relieve the situation.

On 14th April last, the Minister for Labour and National Service (Mr. Harold Holt) gave a news release to the press on the subject of unemployment throughout Australia. The figures contained in that statement indicated that there had been a decrease in the number of persons registered as unemployed by roughly 5,000. The numbers had dropped from approximately 70,000 to 64,406. At the same time, there had been a decrease in the number of persons who were receiving unemployment benefit. But the unfortunate point about these figures is the trend that has been revealed regarding vacancies to be filled. The statement released by the Minister shows that we have entered a new phase in employment. It indicates that as fast as people are being taken into employment, the number of vacancies registered by employers to be filled are decreasing.

Those who have taken the opportunity to study these figures as they have been released month by month will have noticed that as fast as unemployment has declined in Australia there has been a corresponding rise in the number of vacancies to be filled. At times those figures have run into many tens of thousands. To-day, the position is that as fast as persons are absorbed in employment, the opportunities for employment in industry are declining. The figures that have been released by the Minister for Labour and National Service show that there has been a fairly substantial decline in the number of positions to be filled. The actual wording of the Minister’s statement was as follows: -

The number of vacancies registered with the Commonwealth Employment Service fell from 20,747 at the 28th February to 19,229 at the 28th March.

The Minister then stated -

The filling of vacancies for seasonal fruit picking work was the main cause of the reduction.

In actual fact, however, we have found in corresponding periods in the past that although fruit-picking fell off in March, the number of vacancies employers wanted to fill increased. This latest trend must be closely watched because, with other trends to which I shall refer, it indicates that the economy is not as sound as we would like it to be. There is a tendency for permanent employment to be short in Australia in the near future.

Having made that clear, I point to the second trend in employment which, I fear, is not appreciated by the Government. That is the very slow increase in the work force. The figures that are available concerning employment in Australia, which are published by the Commonwealth Statistician, cover a fairly lengthy period. These figures show that a new trend is developing in the labour force for the first time since the end of the war.

I shall not weary honorable members by giving the figures of the increases year by year. However, it is clear that each year since the end of the war there was a most substantial increase in the number of persons employed in industry. Occasionally, the increases were as high as 80,000 or 90,000 persons in the course of twelve months. The only time that there was a fall in the number was in 1953, when conditions were far from satisfactory. In the following years, the work force increased by 80,000, 57,000, 32,000. However, the trend over the last twelve or eighteen months indicates that, unless conditions brighten, it will not be possible for the Australian economy to absorb the additional persons who come into our work force each year. As I have pointed out on a previous occasion, each year the work force must be increased by about 60,000 persons if we are to secure anything like reasonable employment for the Australian people. Each year, 30,000 people leave school and, with our present immigration programme, a further 30,000 persons are available for the work force. Therefore, after allowing for retirements from industry and one or two other matters, the work force should increase by 50,000 a year at least if we are to maintain a satisfactory level of employment and if those engaged in industry are to be given the security to which they are entitled as human beings.

For the last two years, that has not been the case. In June, 1955, 2,017,000 persons were engaged in private employment. In the twelve months to June, 1956, the figure increased by 33,000 to 2,050,000. By June, 1957, the work force had decreased to 2,046,000. The latest figures available, which are for January of this year - in which month, according to the figures released by the Minister for Labour and National Service, we had more unemployment than at any time in the last twelve months - show that the work force had risen to 2,053,000. So in the period from June, 1956, to January, 1958, the work force had increased by only 3,000. As was pointed out by my colleague the honorable member for Melbourne Ports (Mr. Crean), a further analysis of the figures reveals that the male work force is declining and that the female work force is increasing.

The factors that I have mentioned should be given very earnest consideration by the Government. We all appreciate that the number of persons registered as unemployed decreased in February as compared with January, and decreased again in March as compared with February. However, we must still remember that, even with those decreases, on the figures given by the Minister, no fewer than 64,000 persons were registered as unemployed in March. No one would dream of claiming that the total number of persons unemployed to-day is 64,000. However, the figure of 64,000 for March, 1958, is higher than the figure for March, 1953, when we were experiencing a recession. It is true that the population has increased. One candidly admits that. But, on the other hand, if we are to have the continued economic progress and development that the people of this country are entitled to have, we cannot have such an army of unemployed, particularly when trends indicate a very slowly increasing work force and a decrease in the number of vacancies to be filled in industry.

In order to indicate how unemployment affects other sections of the economy, I shall mention the position in the building industry. It has generally been conceded that the building industry can be taken as a good economic barometer. If the building industry is increasing its activities, if it is constructing more buildings and if more people are employed, then the economy generally is buoyant and one can expect that conditions will be fairly good. The figures released by the Commonwealth Statistician show very clearly that employment in the building industry is substantally declining. We find a rather sorry state of affairs in two industries. For instance, the number of persons employed on building and construction has declined from 215,000 in December, 1956, to 203,000 in 1958 - a very substantial decline in a very important industry. A decline in the building industry affects other industries which supply goods necessary for building purposes. A glance at the production figures; released by the Commonwealth Statisticianshows a decline in production in practically every industry engaged in supplying equipment, raw materials and goods to the building industry. That can be seen with fittings, timber and raw materials such as bricks and asbestos sheets. The decline in some instances is very serious and shows that, as fast as the building industry ceases to operate to its full extent, production in other industries starts to slacken.

I felt that, unless the unfavorable and completely changing trends in employment were placed before the Government, it would not fully appreciate the seriousness of the position.

All of us want to see the greatest possible measure of employment; none of us wants to see unemployment in our midst. The Opposition does not want to see the tragedy, the destitution, the insecurity, the uncertainty and the discontent that unemployment brings. So I suggest to the Government that while we can appreciate the need for the measure now before us we feel that the amount of money to be made available under it is far from satisfactory, far from sufficient to meet the problems that face the States. We feel that the legislation does not give the necessary encouragement and assistance to industry generally, and that something more radical, more positive, than this measure and previous measures submitted by the Government is needed to meet the position. I sincerely hope that for the sake of the workers of this country the Government will consider these facts, and make a more positive and more substantial provision to meet the needs of the times than it is doing. Although we support the measure, and will vote for it, we believe that the provision made under it is far from sufficient to solve the nation’s unemployment probem

Question resolved in the affirmative.

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

page 1026


Customs Tariff Amendment (No. 1). la Committee of Ways and Means: Consideration resumed from 20th March (vide page 535), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1957 be amended as set out in the Schedule to these proposals, . . . (vide page 528).

Minister for Air · Evans · LP

.- The Tariff Proposal now before the committee is the first of a series of five proposals which honorable members will be asked to consider. Honorable members will recall that I introduced these proposals on 20th March last. I spoke fully on the proposals at the time of their introduction, but it may be helpful, Mr. Chairman, if I recapitulate briefly the reasons which prompted the amendments.

Customs Tariff Proposals No. 1 reintroduce tariff alterations which were introduced in this committee on 4th December, 1957, and, at the same time, propose some new amendments. The re-introduced items relate principally to passionfruit juice and pulp; hats, caps and bonnets; rotary cultivators; electric household floor polishers; cathode ray tubes; and various papers and paper products. The new duties on these items are based on recommendations made by the Tariff Board.

Amendments included for the first time are confined almost wholly to those which give effect to recommendations by the Tariff Board on the automotive industry. These amendments provide for a new tariff structure for self-propelled vehicles such as motor cars and trucks, and’ for their components and spare parts. They are also designed, where appropriate, to accord reasonable and adequate protection to those engaged in the production and assembly of motor vehicles in Australia.

At present there is no single set of duties^ in the customs tariff which covers a motor vehicle as such. Actually, the duty payable on a complete vehicle consists of the sum of the duties payable on its various components such as the chassis, body, battery, bumper bars and sparking plugs. As many as 30 different tariff items with different rates of duty could be involved, some carrying specific rates, per lb. or each, some ad valorem, some alternative depending on which rate returns the higher duty, some with primage duty and some exempt from primage duty.

All this, as honorable members will readily appreciate, has imposed a considerable burden on the Australian importer, the overseas supplier and the Customs administration. Not only have problems of tariff classification arisen when new models have been introduced to the Australian market, but the different bases on which the duties are levied require a detailed dissection of invoice values and verification of the weights of various components. Moreover, new techniques developed in the production of the modern motor vehicle have, in many instances, outmoded the existing tariff structure. Accordingly it is proposed to provide for motor vehicles, their components and spare parts, under three broad groups in the customs tariff.

Complete or assembled incomplete motor vehicles, when not exceeding 10 tons gross vehicle weight, will be admitted under proposed tariff item 360 (d) (2) at rates of duty of 25 per cent. British preferential tariff and 35 per cent, otherwise. In respect of the assembled incomplete vehicles provision is made for a reduction in the duties to minima of 22i per cent. British preferential tariff and 32i per cent, otherwise, if certain determined parts, for example batteries, bumper bars, tyres, tubes and windscreen wipers are not supplied by the overseas manufacturer. This is expected to give an incentive to the importer to obtain these parts locally.

Vehicles exceeding 10 tons gross weight, when complete or substantially complete, will be admitted under proposed by-law item 360 (d) (1) at rates of duty of 12i per cent. British preferential tariff and 22i per cent, otherwise. This, for all practical purposes, will apply to heavy duty trucks and the like. Original equipment components, other than a few specified exceptions such as tyres and tubes, batteries, radios and sparking plugs, when for use in the manufacture or assembly of motor vehicles, are being provided for in four sections in proposed item 359 (d) at rates of duty ranging from 35 per cent. British preferential tariff and 42i per cent, otherwise to free of duty from all countries. Tyres and tubes, batteries, radios and sparking plugs will continue to be dutiable under their appropriate items in the Customs Tariff.

The original equipment components provided for in proposed item 359 (d), when of a kind being supplied in commercial quantities by the Australian industry will, in most cases, be subject to protective duties of 27i per cent. British preferential tariff and 35 per cent, otherwise. A small, but important range of components, namely - electrical warning devices capable of giving an audible warning and parts therefor, propeller shaft assemblies of the needle roller type usable with vehicles of less than 10 tons gross vehicle weight and parts therefor, shock absorbers and parts therefor, and windscreen wipers and parts therefor will, however, be dutiable at the higher rates of 35 per cent. British preferential tariff and 42i per cent, otherwise.

Many components for which Australian industry is not yet in a position to meet the reasonable needs of the market will be admitted free of duty from the United Kingdom and at ‘7i per cent, otherwise; but, if these components are not reasonably available from the United Kingdom they will be admitted free of duty from any source.

Vehicle replacement parts are, in the main, now being provided for under proposed items 359 (e) and (f). With the exception of tyres and tubes, batteries, sparking plugs and other parts more specifically provided for in the Customs Tariff 1933-1957, those replacement parts which are reasonably available from Australian sources of supply will be dutiable under item 359 (f) at rates of 27i per cent, under the British preferential tariff and 37i per cent, otherwise. Parts not reasonably available from local sources will be admitted at concessional rates under by-law.

It is also proposed in Customs Tariff Proposals No. 1 that the mostfavourednation tariff on flexible metal tubes and metal-cased tubes and pipes not further manufactured than plated, polished or decorated covered by non-protective item 151 (a) be reduced from its existing rate of 12i per cent, to 7i per cent. This action is complementary to that taken in the Tariff Proposals of May last year when the preference margins on a wide variety of producer goods were similarly reduced consequent on the signing of the United KingdomAustralia Trade Agreement.

Customs Tariff (Canadian Preference) Proposals No. 1 are complementary to the proposed variations made in Customs Tariff Proposals No. 1. The principal amendments are those relating to motor vehicles, components and spare parts. In the main the proposed amendments provide for a preferential tariff margin of 7i per cent, lower than the proposed mostfavourednation duties set out in Customs Tariff Proposals No. 1.

Customs Tariff (New Zealand Preference) Proposals No. 1 are complementary to Customs Tariff Proposals No. 1 and are designed to maintain our commitment to accord to New Zealand a rate of duty of 22i per cent, on various hats, caps and bonnets upon their importation into Australia.

The sole purpose of Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Proposals No. 1 is to honour obligations to the Federation to grant British preferential tariff treatment on certain fruit juices imported into Australia which at the time the treaty was negotiated were admissible under tariff item 16 (b). -Excise Tariff Proposals No. 1 are a reintroduction of the proposals tabled in this committee on 4th December, 1957. They provide for the payment of an excise duty of £6 each on cathode ray tubes as used in television receiving sets. I commend the Tariff Proposals to honorable members.


.- As has been pointed out by the Minister for Air (Mr. Osborne), these proposals are five in number. Four deal with customs duties and one with excise duties. I think these may be divided into two parts. Some were introduced to the committee on 4th December last and others on 20th March last. Tariff Proposals No. 1, in effect, cover 43 different items, ranging from fruit juice to motor vehicles. One finds that in eleven cases increased duties are proposed. In sixteen cases duties are reduced either in whole or in part, and the remainder of the items consist of alterations or omissions as a result cf recommendations which have been made. In 32 of these proposals, recommendations have been made by the Tariff Board. Five of them are of a cost-saving nature arising from the United Kingdom and Australian Tariff Agreement and one proposal arises from the General Agreement on Tariffs and Trade. The items which are not accounted for in those 32 proposals are either complementary to previous tariff proposals or, because of changes in wording or drafting, require ratification.

It is interesting, in respect of the proposals which we are now considering, to note that some of them arise from Tariff Board recommendations only, whilst at least three arise as a consequence of agreements which Australia has made with other countries. Naturally, where an agreement is made in respect of trade with another country, the actual alterations involved in respect of customs duties must be ratified by the Parliament. The proposal is to ratify some of these agreements. As the Minister pointed out, the one dealing with New Zealand is simple; it relates to hats, caps and bonnets only on which a duty of 22i per cent, ad valorem is fixed. In the case of the Canadian proposals, however, two different rates are fixed because of the Canadian agreement. One section of the alteration of tariff rates which is provided for under the Canadian agreement relates to metals and machinery only, principally agricultural machinery. A second part deals with vehicles and vehicle parts.

The Canadian arrangement provides that in respect of agricultural implements, the rate of duty on goods admitted from Canada shall be that of the mostfavourednation; but in the case of vehicle parts a different system operates. The agreement provides that in respect of vehicles and vehicle parts the rate of duty to be charged upon Canadian imports to this country shall be between the British preferential tariff and the most-favoured-nation tariff. So, in the Canadian proposals we find two different systems operating in respect of customs duties.

A third proposal is to give effect to the agreement with the Federation of Rhodesia and Nyasaland. It grants to that federation, in respect of any of its goods which are exported to Australia, British preferential tariff. That agreement having been made between the federation and the Commonwealth of Australia, it is necessary in respect of passionfruit juice which is imported that this rate should operate.

Dealing with what is known as Customs Tariff Proposal No. 1, it is not my intention to speak at length on the matters which came before the committee in December last. I wish to deal specifically with the matters arising in the submissions to the committee on 20th March last relating to vehicles and vehicle parts and in respect of which recommendations have been made by the Tariff Board. The recommendations and findings of the board will be found in its report on the automotive industry, dated 13th June, 1957. I should like to express to the Tariff Board, through the Minister, at least my congratulations and commendation upon an exceptionally fine report on a very complicated matter.

As the Minister pointed out in his remarks, none of our customs duties regulations provides for the duty to be charged in respect of motor cars imported into this country. The Minister very rightly pointed out also that it was necessary for a car to be taken to pieces, as it were, in order to ascertain the actual customs duty payable. When we take into consideration the fact that for more than 50 years cars have been imported into Australia and a most complicated formula has had to be followed by the importer in order to ascertain exactly the duty to be paid, and the changes which have taken place in the manufacture of cars during those 50 years, one can appreciate the chaotic position in which the importer found himself when, in respect of every car, he had to itemize the individual parts. At least 30 items of customs tariff would be involved, and the amounts of duty had to be worked out. The amount of duty might be calculated in one, two, three or four different ways.

So a tremendous problem was placed in the hands of the Tariff Board when it was asked to give a report on this matter and to adjust the tariff rates so as to bring about a relatively simplified form in which to make out the necessary customs entries. J think that the amount of time that the Tariff Board has given to this question indicates the thoroughness of its examination, not only with respect to motor cars imported from other countries, but with respect to motor cars manufactured in Australia. In addition, the board has made a complete survey of the various firms throughout Australia that are engaged in manufacturing what are termed either “ motor car components “ or “ motor car replacement parts “. That has involved a tremendous amount of work. I think that the schedule which the board has recommended to the Government and which is now before the House is a relatively simple schedule. Certainly, it is simple compared to those that preceded it.

In the assessment of duty, I think the board has taken into consideration three factors which might well be mentioned. One is to have, as it were, a rate fixed that would group into one just figure the amount of duty that could be imposed when a car was taken individually instead of in component parts. I think that the second big thing that the board has done is that it has adjusted the rates so as to enable Australian industry to expand, but not so as to impose any unfair burden on the Australian consumer. The third thing which I think is commendable is that when there is no manufacturer in Australia of component parts the rate is reduced; and when there is no manufacturer either in Australia or in the United ‘Kingdom of component parts, the parts are allowed in duty free to this country. One can say that this report which covers investigations of a most complicated and complex charac ter, extending over a long period of time, has certainly safeguarded the interests of Australian industry. The board has endeavoured to make simple and easy the carrying out by the importer of customs requirements.

There is only one thing that I desire particularly to stress at this moment and to which I think the House should give some consideration. That is the question of the purchase in Australia of replacement parts for motor cars. I drive a motor car myself. I know that most honorable members do. When it is necessary to buy a new part one is astonished at the price one has to pay for something that is relatively simple or relatively small. The exploitation of the Australian consumer by the merchants in Australia is mentioned in the report in terms which I propose to read so that the House may appreciate one of the problems that the Tariff Board was up against and which we, as consumers of replacement parts, are up against. I might mention that this report covers 113 pages. On page 45, after dealing with the case that had been put up in respect of replacement and component parts, the board went on to say -

On the other hand the claim that some prices of replacement parts were several times higher than the prices of similar components for use as original equipment was found by the Board to be in accordance with fact. However it must be appreciated that, because of the high cost of maintaining plant to produce in low volume parts for replacements and because of the additional costs incurred in distribution, storing and selling there is some justification for the prices of replacement parts being higher than the prices of those for original equipment. However, in several cases prices were considered to be excessive, being more than four times higher than the original equipment price in both imported parts and parts manufactured locally. In the case of Australian manufactured parts it was shown that the parts passed through too many hands after leaving the local factory and, generally, excessive profits were being taken at each point of handling. In the case of imported parts a factor affecting margins is that, where ad valorem duties operate, duty is payable on the inflated values and in addition an excessive margin is usually added by the Australian subsidiary or associate company of the overseas supplier. These practices can only be condemned as they place an unwarranted burden on the customer.

The CHAIRMAN (Mr Adermann:

Order! The honorable gentleman’s time has expired.


– With your consent, Mr. Chairman’, I shall take my second period now. The report continued -

The Board feels it necessary to invite attention to the apparent failure of an important industry such as the automotive industry during a period of inflation to make any endeavour to see that replacement parts are- made available to the public at the lowest price. Motor transport in these days is no longer a luxury; the bulk of it is essential for the carrying of passengers and goods and transport costs, which have been reported to represent 30 per cent, of all production costs, are vital factors in Australia’s present cost structure.

The Board believes that whilst costs of production have risen considerably over the last ten years industry mark-ups have also been increased to obtain even greater returns on higher costs; an example of this was found in the case of one part the landed duty paid cost of which was approximately £1 Ss. and the retail list price approximately £7.

I think it is clear from this section of the report that, although the board has been very cautious and conservative in its statements, it has pointed out that, in some cases at least, excessively high prices are being charged to the Australian consumer. The Tariff Board is most anxious that any decisions or recommendations which it makes in order to protect legitimate Australian industry shall not be used by the protected industries to seek excessive profit and to exploit the users of transport and the people who own motor cars for their personal use. The Opposition would certainly be prepared to support any action which the Government might take in order to prevent excessive prices from being charged by those who are retailing or otherwise merchandising spare parts. We feel that when the Australian people, by means of parliamentary implementation of Tariff Board recommendations or direct parliamentary action, take steps to see that an industry is protected against overseas competition, a duty falls upon the Australian industry to see that the people obtain their requirements at reasonable prices, and that they are not subject to exploitation. I believe that this section of the Tariff Board report may be regarded as a warning to the- people who are at present making unreasonable profits. On behalf of the Opposition let me say that we are prepared to assist in any way to see that exploitation is not continued.

In conclusion- let me say that we of the Opposition support the recommendations of the Tariff Board. I believe that our policy has been consistent in this regard. Whenever the Tariff Board makes a recommendation we support it, unless we feel that some injury may be done to Australian industry. The present proposals, we believe, are fair and reasonable. They will provide a, simple system instead of a complicated one. They will fix rates of duty that will enable Australian industry to function efficiently. For those reasons, the Opposition supports the proposals.


.- I am pleased to be able to follow the honorable member for Bendigo (Mr. Clarey), as I have done on two occasions previously in other debates. Once again we appear to be in agreement on- many aspects of the matter under discussion. I also would like to congratulate the Tariff Board, through the responsible Minister, for the reports that we are now discussing. They have been prepared, I feel sure, after a great deal of thorough, investigation- of a most complicated and difficult subject. We must all give due credit to those responsible for the preparation of the report, and hope that action; will’ be taken upon it as soon as possible.

I shall deal, first, with some of the minor matters contained in the report. There are three tariff proposals dealing with trade between Australia and other countries of the Commonwealth of Nations. It is pleasing to see the way in which we are implementing our trade agreements with Canada, New Zealand and Rhodesia, by means of special tariff proposals with regard to trade in certain goods. Every time one of these agreements comes before us for ratification, I feel sure that we are all pleased to think that it may lead to an increase of trade between the various Commonwealth countries.

The major proposal deals with import duties on motor cars and motor vehicles and spare parts for the automotive industry. We certainly must congratulate the Tariff Board on simplifying the whole system. It will certainly be much easier now to determine the duty on an imported car, whether it be new or second-hand. On various occasions intending British immigrants have written to me asking what duty they would be required to pay on motor cars that they wished to bring to Australia with them. When one makes an inquiry in this connexion one is faced with a mass of schedules. It is necessary to say how many sparking plugs the car is fitted with, how many tyres, how many batteries and where they were made. Much other information of this kind must also be given. I once tried to work out the duty myself, but after reading some of the documents through I seriously questioned whether it was worth while bringing a car to this country. These proposals will provide for simple calculation of duty, and one will be able to ascertain the amount of duty on a car in little more than a moment. We should be grateful, therefore, to the Tariff Board for making these calculations so much easier.

The second point is, as already mentioned by the honorable member for Bendigo, that preference is given to locally manufactured articles, especially items such as tyres, batteries and sparking plugs. Our local industries will continue to receive preference, as is right and proper. No doubt, we will see the efficiency of those industries continue to improve.

The honorable member for Bendigo has rightly referred to the Tariff Board report - and I presume that we can talk about both the report and the customs proposals at this time - concerning the investigation carried out into the distribution of spare parts throughout Australia. I agree that a number of matters mentioned in the report must give rise to concern amongst honorable members on both sides of the House. I believe, however, that as a result of this report the various companies concerned with the distribution of these products will look again at the charges that are being made and see whether they are really higher than is reasonably justified. One feels impelled to ask whether it is necessary for these spare parts to pass through so many hands between the manufacturer and the consumer- If we could reduce the number of hands through which they pass, then costs could be reduced accordingly. The persons concerned in the distribution of these articles may find that high costs cannot be eliminated. However, it seems to me that as a result of this Tariff Board report the industry should give some information to the public in order to justify the charges that are made. If possible, the industry should see that those charges are reduced, because it is obvious that the transport industry of Australia would benefit tremendously if the cost of spare parts could be reduced even slightly. But before any action is taken by the Government, I believe the industry should be given time to examine its own problems <ma see whether it can put its own house in order. If charges cannot be reduced, then the industry should publicly justify the large markups on the various articles.

Dealing with the reports as a whole, it is interesting to see that reductions of duty have been made as a result of the Japanese Trade Agreement and also the agreement with the United Kingdom that was revised last year. We see in these moves a further justification of the Government’s claim last year that as a result of these new agreements costs of certain essential items in Australia would be reduced. We can congratulate the Government on again reducing the tariff barriers raised against goods coming into this country. I think that everything that is done to reduce tariffs is in the interests of Australian consumers.

Mr Bryant:

– Is the honorable member a free trader?


– I hope that the honorable member will always be interested in the welfare of the Australian housewife, and in seeing that she is able to get goods as cheaply as possible. Here again we see an example of cost reduction, and I am sure that the honorable member will agree that everything that is done to reduce tariffs is desirable. Under the administration of this Government, over the last eight years, our tariff barriers have been reduced comtiually, and the tariff component of costs in our economy is very much lower now than it was in 1949.

Sitting suspended from 5.56 to 8 p.m.


– I was saying, before the suspension of the sitting for dinner, that these tariff proposals will reduce the tariffs on a number of items, largely as a result of the Japanese Trade Agreement and the revision of the Ottawa Agreement, both of which were negotiated last year. As I have said, this can only be in the best interests of Australia. Everything that is done to reduce the tariff walls around Australia is in the best interests of everybody in Australia. Tariff reductions will enable us to import manufactured goods more cheaply, and will enable our exports better to withstand the fierce winds of competition. Anything that will help us to increase our exports will prove of great benefit to Australia in the years to come. I can only hope that we shall be able to continue this policy of reducing tariffs, which has operated over the last few years, but 1 think that the world trend, with other nations in the Western world raising their own tariffs, and imposing import restrictions, as is done in the United States of America especially, may make it impossible for us to continue very much longer this policy of tariff reduction. If other nations of the Western world could continue a policy of tariff reduction similar to our own, we should be able to expand our exports of primary products, and we should have no difficulties with import restrictions. But if other nations are raising their tariffs against us, we are probably approaching the time when our own tariff reduction policy, as exemplified by these proposals, will have to come to an end. When that time comes the tariff walls will be rising around us again.

The Tariff Board’s report on the automotive industry indicates the tremendous amount of work that must be undertaken in the preparation of a report on automotive spare parts. That work is typical of the work entailed in the preparation of any Tariff Board report. Therefore, it is not surprising that, sometimes, a great deal of time elapses between the time when the board begins a hearing and the time when the board’s report on the matter appears on the table. I hope that the changes being made by the Government in the operation of the board will lead to the streamlining of its organization and the expediting of the preparation and presentation of its reports. There is an urgent need for the board to present its reports to the Parliament as quickly as possible. I congratulate the Government upon the appointment of Dr. Westerman as chairman of the board, and I wish him well in the hard task that lies ahead of him. I am sure that he will be able to expedite the work of the board, and perhaps he may even be able to improve upon the work that the board has done in the past. I hope that, as a consequence of Dr. Westerman’s appointment, it will be possible for the board to resume its true function of regulating imports into Australia and thereby make it possible for import licensing to be directed solely against the unusual dangers of balance-of-payments difficulties. I am sure that Dr. Westerman’s intimate knowledge of the problems of import licensing will greatly help him in his new task of re-organizing the Tariff Board.

Although the two matters that I have just mentioned are somewhat outside the scope of this general debate on the tariff proposals that are now before the committee, I think that they arise out of these proposals, and they help to indicate the way in which the Government is tackling the major problems of Australia’s external trade.


– Order! The honorable member’s time has expired.

Melbourne Ports

.- I support the honorable member for Fawkner (Mr. Howson), and the honorable member for Bendigo (Mr. Clarey), in commending the Tariff Board upon the detailed information contained in its report on the automotive industry, which is closely linked with the proposals now before the committee. I think that it is only fair to the Board that I should direct the attention of the committee to the reservation made by the board, at page 37 of the report, in these terms -

  1. . it is important at this juncture to make it clear that this report does not purport to deal with every aspect of the Australian automotive industry.

The fact that this report has taken so long to reach its final printed stage, and that it does not purport to cover the whole Australian automotive industry, is a clear indication that, in some respects, the existing tariff machinery in Australia is inadequate for the tasks required of it. Regardless of the quality of the Tariff Board, or, for that matter, of two tariff boards, it is doubtful whether there is available yet machinery that enables the board to adjudicate in important matters such as this. The board indicates, at page 5 of its report, that, on 2nd July, 1954, the present AttorneyGeneral (Senator O’sullivan), who was then Minister for Trade and Customs, referred to the board for inquiry matters pertaining to the automotive industry, and it was not until 13th June, 1957 - almost three years later - that a report was presented. Even then, the report presented was not, as the description on its cover might suggest, a comprehensive survey of the Australian automotive industry.

Honorable members should be aware of the importance of this vast industry. The board indicates, at page 36 of its report, that capital investment in the Australian motor industry, in its various manifestations, totals about £400,000,000. It provides, directly or indirectly, employment for at least 200,000 persons. The report states, at page 37 - it is reported that the sale of motor vehicles and parts for twelve months ended 31st December, 1956, were between £450,000,000 and £500,000,000.

The report indicates the importance of this industry to other industries in Australia. It states -

It is also estimated that during the next twelve months it will buy from Australian sources more than 200,000 tons of steel, 1,250,000 gallons of paint materials, and from 3,000,000 to 4,000,000 square feet of leather or leatherette.

That gives at least some idea of the dimensions of the problem that is faced.

After reading carefully some of the matters that the Tariff Board had to consider in this inquiry, which was only very limited, I suggest that it is doubtful whether our machinery in Australia is adequate to embrace an industry which, I suppose was scarcely in existence, and was certainly only an infant industry, when the original Tariff Board was established. As far back as 1937, twenty years ago, the board went on record with this statement, which appears at page 9 of the report I am discussing -

The board wishes to express its considered opinion that the present selling prices of cars in Australia are far too high, and that special care should be exercised to ensure that efforts to extend manufacture in Australia do not increase such prices.

That was written in 1937. In view of the final strictures of the board in this report, it is much more doubtful to-day whether that statement would not apply now with greater force. The prices of cars in Australia may be too high and profiteering may be going on in this important industry. In fact this is indicated in the minor field of spare parts. In the report the board cites one example of a part, landed in Australia at a cost of 25s., including duty, the final retail price of which was £7. The board suggests that this margin of over 300 per cent, is very difficult to account for. Very little examination was given to the question of the selling price of complete motor cars.

I shall indicate some matters in the report to show the variety of problems that had to be considered by the board in what was only a partial inquiry. The board found that it could not examine the price of a motor car in its assembled form, as distinct from its parts. That is stated at page 8. On page 22 the board states that a representative of all the New South Wales Government transport industries sought to present a case for exemption from duty of chassis used for public transport services. That was another problem at which the board was required to look. On page 23 there is reference to the subject of deletion allowances, which is dealt with at some length. These allowances relate to motor cars which are imported with a part missing because, supposedly, the part can be supplied in Australia. Apparently the allowance that is made is not consonant with the price of the Australian part that is supposed to be fitted.

Mention is made of all sorts of other problems, many of which involve the defeating of the so-called preference arrangements between the United Kingdom and Australian Governments. On page 25 the board states that if Coote and Jorgensen Limited and Sonnerdale Limited, two Australian firms, were in a position to meet at least two-thirds of the demand for transmission equipment, the annual savings in overseas funds would be in the vicinity of £2,500,000. Therefore, the board had to take into account such questions as Australia’s balance-of-payments position. On page 25 the board also refers to relative production costs in Australia and the United Kingdom of components which were supposed to be of the same kind. The board found that there was a considerable difference in labour and overhead costs and that a great contributing factor to the difference in overhead costs was the difference in the scale of production here and in the United Kingdom.

On page 37 the board refers to the level of Australian content at which certain duty concessions should be available. That creates another set of problems. Some firms put this level as high as 95 per cent., and others put it as low as 40 per cent. All sorts of arguments were used in relation to the method to be adopted in determining the Australian content, and whether the percentage determined was to relate to the factory cost, the wholesale selling price, or the landed cost. Some manufacturers of vehicles with a high Australian content are also importers of other vehicles, and a higher duty for the protection of one part of their operations would result in an increase in cost in another part. Strangely enough, the board found that there was no unanimity amongst the various concerns on whether or not duty ought to be applied.

Those are just some of the problems that the board met in a very limited inquiry. I suggest that the report raises for the very serious consideration of the Parliament the the question of the adequacy or otherwise of existing tariff machinery for adjudication on these very important problems and whether the machinery that was established twenty or thirty years ago suitably embraces such an important industry as this which has capital investment of £400,000,000, and employs 200,000 people. Annually the industry sells motor vehicles valued, on an average, at £450,000,000. Petrol and other fuels valued at about £170,000,000, and vast quantities of steel, paint, leather, and other commodities are used.

Is there adequate machinery for inquiry, in view of the size and importance of the motor car industry, both internally and in relation to its impact on our overseas balance of payments, and in view of the intimate link, via the industry, between foreign investment and the Australian community? I suggest that possibly the time has come for the .establishment of a special tariff board charged only with the continuous examination of problems in the motor industry. It is often said that transport in Australia is responsible for 30 per cent, of the total national income. I think that there is a fair amount of double counting in that kind of calculation, but nevertheless it does give some idea of the significance of transport. The annual expenditure on motor cars, petrol, and components represents a fairly significant proportion of Australia’s gross national product of about £5,000,000,000. The motor car industry at any rate represents well over one-fifth of it and probably may be close to one-third. I doubt whether setting up just another tariff board would be adequate. This industry is far too big to have only a casual examination made of it. The big question that the Tariff Board asked in 1937 was whether there could be profiteering. This report shows that there has been profiteering in spare parts and there may still be profiteering in relation to the selling price of motor cars. It seems very odd that the dealer with a Holden franchise gets almost £200 for selling a Holden, yet there is a waiting list to buy them. Whether that charge should be loaded onto the public is open to doubt. There are more interests involved in the motor car industry than those of the various producers. There is the interest of the consumer, and in my view the present tariff machinery is inadequate. The ordinary consumer does not get a look in at all, and it is time that situation was remedied.


.- The discussion on the proposals put forward by the Minister for Air (Mr. Osborne) has centred mainly on the Tariff Board’s report on the automotive industry, and I should like to join with other honorable members in congratulating members of the Tariff Board for the quality of their report and the manner in which they have conducted their investigations. Because I wish to turn to another item, it does not mean that I do not realize the importance of this report so far as it relates to the automotive industry.

As I think is well known, I have taken a continuing interest in one of the primary industries that are covered by the proposals brought before the House by the Minister. I refer to Division 1, the non-spirituous preparations of passionfruit juice and pulp, because of the requests for assistance that have been made over recent years by the growers of passionfruit. Whilst the proposals brought forward by the Minister are the result of a Tariff Board inquiry and report - a very good report in my opinion - the matter I wish to refer to is, in an overall way, the delay that has occurred in having the final report tabled in this House. Some two years elapsed from the time that the growers in the industry made their original representations until the report was tabled. As far as the report itself is concerned, and the recommendations that were adopted by the Government, I refer to the schedule that the Minister has provided. I do not intend to go right through the figures, but merely to give an idea of the generally satisfactory nature of the report. At page 7 of the schedule, reference is made to the rates of duty operating from 1933 to 1957 under the previous customs tariff where, for instance, the British preferential tariff was ls. 10id. a gallon in containers of less than one gallon, and the proposed rates of duty are now 9s. 3d. Quite a lot of the advantage so made available has been lost to the growers because of the long time that has elapsed, and during that time the industry has deteriorated.

I mention this because it is not the first occasion in recent years when a primary producing industry has suffered from the sudden importation of a particular product. Therefore, I should like to suggest once again that, prior to any importation being made under by-law or by any other means, the Australian industry might be consulted by the appropriate department to see whether it can supply the quantity and the quality of the particular product in question.

Another thing I wish to mention in connexion with this matter is that the Tariff Board recommended that 25,000 gallons per annum of passionfruit pulp and juice should be imported for the next five years from New Guinea, and that the industry be reviewed in five years’ time. The Government adopted the Tariff Board’s recommendation with regard to the quantity per annum, but reduced the period in both cases to two years. I am very glad that was done, but the growers have informed me that an application has already been made for a further quantity to be allowed duty free into this country from the Territory of Papua and New Guinea, and, of course, the two years period has not elapsed. I have had a letter from the Minister for Customs and Excise (Senator Henty) informing me that the Government is not expected to alter its decision in regard to this matter. So I make the request once again that when any change is contemplated under that heading the growers might be consulted before the change takes place. If that is done I think it will make for much smoother working in the entire industry, and a better liaison between the growers and the processers.


.- The particular matter to which I wish to refer - and which, I know, is important to other members of my party - is the duty on imported machinery, particularly agricultural machinery. One of the weaknesses in our national policy is that primary producers are compelled to dispose of their products at world prices, to accept what the world is prepared to give them, whilst they are compelled to buy their capital goods in a protected home market, and to pay artificial prices for them. It is because of the impact of this policy that the primary producers have had to approach the Treasury for some measure of protection.

I find that the same policy of inflicting hardship on ii-.i primary producer, and in this case i’~2 small man, is perpetuated in the proposals now before us. I refer to the item dealing with rotary cultivators. I appreciate that there is a need to build up our secondary industries, but I am not satisfied, that secondary industries are as efficient as they could be. A lot of talk is heard about, the primary producer being required to use scientific methods of production and to become more efficient so that he can bring his prices down to a level at which he can compete on overseas, markets.. But I am hanged if we hear the same degree of insistence on efficiency in the manufacturing industries so that prices will be comparable with those for similar goods that can be obtained from overseas.

That is why I am criticizing national policy and particularly the policy supported by the honorable member for Grayndler (Mr. Daly) who is persistently interjecting. He is prepared to insist that a man employed in an industry shall get full value and more for his fi. He would pay the worker in industry 30s. for 5s. worth of work and then impose a tariff to protect the same worker. The result is that the man who produces the wealth from the land pays the piper all the time. This is a matter of national policy, and I hope that this Government, and all subsequent governments in Australia, will insist on efficiency in secondary industry so that the producers of goods will be able to put them on the home market at prices which will enable them to compete with goods from overseas.

The particular case which is disturbing me is the duty that is to be imposed on rotary cultivators. These implements have only recently been introduced into farming methods in Australia. Previously they were admitted free of duty under the British preferential tariff. The intermediate tariff rate was 10 per cent, and the general tariff rate 10 per cent. Now, the duty will be 20 per cent, intermediate tariff and up to 30 per cent, general tariff. This will affect many of our orchardists, including applegrowers, who have to send their products overseas and accept any price they can get. They will have to pay up to 20 per cent, and 30 per cent, duty on machines which are necessary in their industry.

Every time a duty is imposed and an industry is protected, it takes full advantage of the protection and its prices rise. I could not allow such a case as this to pass without commenting on it and directing attention to the fact that the fundamental problem in Australia is the need for secondary industries to do what primary producers have been urged to do and have done. That is to apply efficient methods in their industries so that they can market their goods at highly competitive rates. When that is done, I shall be prepared to accept a degree of protection with some contentment.

Melbourne Ports

– I direct attention to one of those strange asides that are sometimes made in government reports. Sometimes, it is very doubtful to whom they are addressed. I am referring now to the prices of automotive parts. The Tariff Board made rather stringent comments on this matter. At page 45 of its report on the automotive industry the board stated -

The Board feels it necessary to invite attention to the apparent failure of an important industry such as the automotive industry during a period of inflation to make any endeavour to see that replacement parts are made available to the public at the lowest price.

That is a question, as it were, which was asked by the Tariff Board, suggesting that the automotive industry should set its own house in order. Perhaps, the automotive industry should put its own house in order; but it is extremely doubtful whether, being an industry such as it is, operating for profit and with a major part of the profit not in the parts but in the original unit itself, an appeal to the industry will bear very much fruit. The board apparently sees an evil existing in the community, namely, that a large number of these parts are sold at too high a price. I can cite one example where the landed duty-paid cost was approximately £1 5s. and the retail list price for the part was approximately £7. That is a tremendous margin. While there may be a middleman or two inserted in between, apparently it gets to that stage because of what the industry calls “ a mark up “. Those concerned expect to make a certain profit on every handling.

There also seems to be a practice in the industry to get a product used in the first place. A part is supplied to the manufacturer of the motor car at a lower price and when somebody has to replace the part after it has been put into the car - and often nothing else will fit - the car owner has to pay an inordinate price for the replacement. The Tariff Board gives some credit to the fact that there are distribution costs involved, but it seems to feel that, on balance, there is also undue profiteering. I would suggest that, if there is undue profiteering, it is no good relying on pious exhortations in a government report. I am not querying the piety of those who made the report. I suppose they had no other stand to take. They are members of a board charged with certain duties and at least they have pointed out something which they feel should be remedied. They have suggested that the industry itself should take some steps to correct this matter. 1 believe that honorable members on the Opposition side feel that it is very doubtful whether the industry will take such action. If the industry will not act, surely the Government, which is giving protection to certain people, is entitled to tie strings to that protection if it feels that there is profiteering.

I suggest that this is a matter which the Government should examine. If it cannot drive the industry itself to take some definite steps it should, in the interests of the public as a whole, see that the profiteering which apparently exists is curtailed. I repeat that while there has been some inquiry about it by the Tariff Board, unfortunately the inquiry did not go far enough to determine whether there might not be profiteering also in some other aspects of the automotive industry. That is why I suggested earlier that perhaps the time has come when there ought to be a permanent committee of inquiry - a statutory body - to inquire into all aspects and ramifications of the automotive industry, as it is called in this report.


.- The honorable member for Melbourne Ports (Mr. Crean) has rendered a public service by suggesting that possibly an authority should be set up to deal with the automotive industry itself.

Mr Osborne:

– How?


– The Government could pass the requisite legislation.

Mr Osborne:

– How could it do that under the Constitution?


– I shall deal with that matter. I suggest that there is much logic in the honorable member’s suggestion. One cannot read this report of the Tariff Board without becoming very conscious of the fact that a state of affairs is developing in Australia which demonstrates clearly that the automobile industry is rapidly reaching a point where fewer and fewer people are concerned with its control. The fewer the number of people in the industry, the greater their freedom to exploit those who buy their products.

Mr Osborne:

– No industry in Australia has grown more rapidly.


– The Minister says that no industry in Australia has grown more rapidly; but I am trying to tell him that no other industry in Australia, perhaps, has a greater interlinking of interests and consequently a lesser degree of competition. For that reason, the industry being of the magnitude that it is, it is essential that the authorities who report from time to time on the industry should not be cluttered up with a much wider range of subjects. As demonstrated by the honorable member for Melbourne Ports, a case can be made for the appointment of an authority to deal specifically, and perhaps exclusively, with the automotive industry. Perhaps to a lesser degree such an authority could also deal with agricultural machinery.

I make no bones about the fact that for a lifetime I have been an ardent supporter of Australian industry and an ardent supporter of a protective policy. I do not mean that I believe that a protective policy will necessarily bring a cheaper article to the Australian people, but I have accepted the protectionist philosophy because I believe that, in the absence of an Australian industry, a combination of importers of specific items could arrange to charge the same price for similar articles and shamefully exploit the Australian people. In the motor industry and the agricultural machinery industry, once the manufacturers have the protection of a tariff, they proceed to exploit the people shamefully, but with Australian industry we have the added factor of employment. The tendency is to exploit the purchasers. Once protection has been given to an industry, some power should be used to ensure that the manufacturers do not exploit the purchasers of their products.

I appreciate that the big advantage of the establishment of Australian industry is that, although the Australian manufacturer may exploit his customers, an opportunity does exist to enforce upon him in respect of his employees Australian working standards and Australian standards of remuneration, and to impose whatever taxation is considered appropriate. I am an ardent protectionist, but I echo the sentiments expressed by the honorable member for Moore (Mr. Leslie), particularly in regard to agricultural machinery. I doubt whether any factor in primary production to-day is greater in its impact than the cost of agricultural implements and of spare parts for such implements. Those who are engaged in supplying this equipment are at liberty to exploit the Australian primary producer, and consequently the Australian people. This impact has increased our cost of production and placed us at a distinct disadvantage in overseas markets. Every primary producer who has to buy parts for his agricultural implements knows that he is being got at.

The fact is that to-day individual manufacturers are disappearing. H. V. McKay Proprietary Limited has gone and is now part of H. V. McKay Massey Harris Proprietary Limited. More recently this company has become associated with the Ferguson organization, a great international combine. From time to time, some enterprising Australian comes forward with a new idea or perhaps a development of some old ideas. He believes that he can engage in the manufacture of agricultural implements, and attempts to do so. However, it is not long before the big organizations, with greater output, greater capital and greater international strength and resources, crush that potential competitor right out of the Australian market.

I admit that some brake can be applied by the reduction of tariff protection, but hand in hand with tariff protection should go a power, vested in the Commonwealth, to use price control wherever it is clearly demonstrated that the manufacturers of agricultural machinery, motor vehicle parts or motor vehicles are engaged in exploitation. That power should not be used in regard to every individual item and every screw and bolt, but it should be used in every case where it is clearly demonstrated that there is exploitation. There is no question whatever that there is exploitation to-day. I need only point out that the manufacture of agricultural machinery is daily coming into fewer and fewer hands. The H. V. McKay Massey Harris-Ferguson organization, the International Harvester Company of Australia Proprietary Limited and some others who are the highly efficient manufacturers and suppliers of these implements, have practically the whole field in their hands. The old days of the country plough maker, the country cultivator maker and the small internal combustion engine manufacturer are gone. Consequently, the very powerful combines have the Australian people completely in their grip. It is true that their products benefit the community, but when they assume monopoly powers such as they have to-day, they become a menace and a very powerful factor in increasing the cost of production, which leaves us in a most disadvantageous position when compared with other countries.

For that reason, if it can be shown that the two Tariff Boards as at present con.stituted, have too much work, then there is need for a third board, which could specialize in the automotive industry and the agricultural implements industry. These industries are growing in this country, and by concentrating on those two items, the board could ensure that there was no undue exploitation. In that way, a very important public service could be rendered. The only weakness in the argument of the honorable member for Moore is that, when an opportunity existed to vest in the Commonwealth Government power to deal with prices, he was with the opposing forces. I prophesy that the day is not far distant when, by sheer necessity, the parties to which he and his friends on the Government side belong will be placed in the position where they will be compelled to use powers to prevent exploitation. Such powers should not be used lightly, but should be used when the Tariff Board or some other authority determines that exploitation exists. I have no doubt that the Minister will say that the tariff can be reduced. However, before the tariff can be reduced and these manufacturers thrown into more active competition with overseas organizations, time passes and we are at a grave disadvantage.

Mr Leslie:

– That is the answer.


– The Minister and the Government should look at this matter of very great and grave importance to the people. The honorable member for Moore says that the reduction of the tariff is the answer. But I say to him that, if an Australian industry is destroyed, though it may be exploiting the people, we are substantially worse off than we would be if the exploitation and the Australian industry were allowed to continue. Orders for these goods would be thrown into the hands of overseas manufacturers and, as has been demonstrated in the past, they would be just as ruthless in their exploitation as the Australian manufacturer with whom we could deal if we had the power to use price control when necessary. The honorable member shakes his head. I am old enough to remember that when the reaper and binder was exclusively marketed in Australia by four importers it did not matter to which importer the primary producer went, he had to pay £105 for a reaper and binder. Tariff protection was granted to the firm of H. V. McKay, which was able to market a reaper and binder, as good as the imported job, for £95, or £10 less than the price of the imported machine. That demonstrated that when no Australian industry was manufacturing reapers and binders the primary producers were being exploited by a combination of four importers; but when tariff protection was granted, although the primary producers might have still been exploited they were at least getting their reapers and binders for £10 less than before.

Another benefit was, of course, that thousands of good Australians were employed in a very important secondary industry producing reapers and binders, and the Parliament could control, as I said in my initial remarks, the standard of living, wages and conditions of employment of those workers. It could also tax, to the extent it thought fit, the profits made by the industry. Had price control existed at that time, the Parliament could have determined whether or not £95 was a fair price for a reaper and binder. But had the duty on imported reapers and binders been reduced at that time, after the local manufacturer had put in plant and equipment, engaged his workers and built his factory, he would have been wiped out, and with him would have been wiped out the jobs of thousands of Australians.

So it is demonstrably clear that reduction of tariffs is not necessarily the most effective way of dealing with manufacturers who take advantage of tariff protection in order to exploit the Australian people. A much more effective approach, and one which I hope will appeal to the wisdom of this Parliament, is to vest the Commonwealth with a substantial measure of power to control prices when people exhibit exploitation tendencies.


– I want to refer briefly to those sections of the tariff schedule which are to give effect to what was obviously the intention - the very good intention - of the Tariff Board and the Government to simplify import duties as they affect motor cars, and to reduce the volume of paper that passes to and fro between importers and customs officials.

I think that the general principle contained in the proposals is excellent. Furthermore, I am delighted to know that we have been able to establish an industry here concerned with the manufacture of many different makes of motor cars. I support that. When these schedules were tabled, one leading Melbourne newspaper reported that the result would be a reduction of about 7 per cent, on cars as well as a simplification of the method of assessment of import duty. I think that was correct as far as the majority of cars was concerned; but the alteration of the method of assessment of duty resulted in increasing the price of the German-made Porsche car by £400 or £500 after sales tax had been added to the increased customs duty.

I know that the Porsche is an expensive car costing £3,000 or more, and that it may not be considered necessary to import it. Unfortunately, however, the fact is that the person who was importing this make of car had gone ahead in good faith and had sold cars that were on the water. It could also be said that he ought to have had in his contracts some escape clause to cover such a contingency, so that the purchaser would have to pay the increased price. But an increase of £400 or £500 in the price of a car is a solid increase, and I do not think anybody would be willing to pay it. As a result of what happened this person is in a very difficult financial position, and may not be able to get out of it.

I have approached the Minister, who has been most sympathetic, about this matter. He has tried to do all he could, but he has told me that there is nothing in the act to enable him to deal with an unforeseen contingency like this - and I believe that because of its nature it was unforeseen by both the Tariff Board and the Ministry. It would not have mattered had not the man concerned had twenty cars on the water and another 30 on the factory line which were being built for the Australian market. They are right-hand-drive cars specially manufactured for Australia, and of a kind not sold in any other right-hand-drive country. Naturally, the country manufacturing them would not be very pleased about what has happened. I do not know whether the matter has been taken up on the consular level; but the country concerned subsidizes flour production and is undercutting us in some of our Eastern markets, and we cannot expect sympathy from it in that regard when our tariff is operating in the detrimental way I have mentioned.

I am well aware of the difficulties involved in the tariff procedures, and of the fact that once schedules are laid on the table they must commence to operate immediately. But in a case like that I have mentioned, where an import licence was granted - and everybody knows how hard it is to get import licences these days - on the basis of a 50 per cent, or 100 per cent, sales increase the previous year, and the importer goes ahead in good faith to use the import licences given to him, it is rather unjust that he should find himself in the position in which this man now is.

It seems to me there is something wrong with the legislation if it does not enable a Minister to take action to set an injustice right. It rather reminds me of what happened with regard to certain Olympic Games films. The Olympic Games Organizing Committee received a gift of about six reels or cans of films from a certain nation. We offered to give any guarantees desired that these films would not be shown commercially, but shown only through the various amateur sports organizations. But, because the government authority concerned refused to classify the films as educational, on the ground that they might, in spite of the guarantee, be shown commercially, we were asked to pay the full duty of 5d. a foot on them. For the last eighteen months the films have remained in bond, and I do not know now what is going to happen to them. Furthermore, a documentary Olympic film that we made was also not classified as educational, in spite of the fact that it could not be shown commercially. It thus became subject to sales tax.

Mr Duthie:

– That is a disgrace.


Well, I was going to say that it seems to me we are being run by a bureaucracy. The Minister should at least have some discretion in cases of that nature. Again, that may be the fault of the legislation. In the case I have mentioned, and in similar cases, there is apparently no section in the act to provide, for instance, that when cars are on the water, having been ordered before the new schedule was introduced, they will be treated as a special case. I understand that such a principle was followed recently in connexion with import licences. If that course can be taken in respect of the effects of increasing or curtailing the value of import licences I cannot see why it cannot be taken also with regard to goods subject to tariff duty. I know there are great difficulties involved in this. I am not speaking in any spirit of criticism of any Minister, and certainly not of the Minister for Customs and Excise or the Minister for Trade. The only thing 1 would say is that, as a result of my experience, I have a very great deal of sympathy for importers, or seekers of import licences who become, as I became, a shuttlecock in a game of battledore between the Department of Trade and the Department of Customs and Excise. I believe that there again there is room for much closer co-operation so that an applicant does not get tossed back from one branch to the other because officers say the case does not come within their respective authorities and therefore they cannot deal with it.

I ask the Minister at the table to urge the Minister for Customs and Excise (Senator Henty) and the Minister for Trade (Mr. McEwen) to have another look at this particular case - there may be others - because I believe that a grave injustice has been done to a returned soldier who has built up this business. This matter cannot be wiped off by saying that he should have been a better businessman. I have heard that tale before; and there are many people in business of whom that could be said. In this particular case, however, the matter was not referred to the Tariff Board to inquire into the customs duty on cars imported into this country. It was referred, first, in respect of duty on automotive spare parts; and secondly, in respect of the simplification of the method of assessing duty on imported cars.

In this case and others - there are not many - it was only because of the particular type of car having a larger proportion of what is classified as “ chassis “ as against motor body, that this problem arose. I ask the Ministers concerned to examine this particular case again. I am not often heard putting up particular cases, but I feel that in this instance an injustice has been done and that some action should be taken to remedy it. I do not want to be misunderstood. I am not against the principles or the schedules which have been laid down. What I am against is action which can result, overnight, in somebody being made bankrupt because something happens, when steps are taken to improve a situation, which, I do not believe, either the Minister or the Tariff Board foresaw.


.- The committee to-night, for once in a while, should be indebted to the honorable member for Moore (Mr. Leslie) because his disjointed remarks on this matter encouraged the honorable member for Lalor (Mr. Pollard) to deliver one of the best discourses we have heard on the question of tariff duties and their effect on the economy of the nation generally. The suggestions contained in his speech might well be adopted by the Government. Not only did he approach this problem in a constructive manner, but he also suggested means which are available to protect Australian manufacturers who employ huge numbers of workers in this country.

The honorable member for Moore said that immediately an industry is given protection it becomes inefficient and, therefore, the value of such protection is lost to the community, and the industry is actually bolstered because of its inefficiency. The honorable member suggested that secondary industries which benefit by tariff protection should be required to make themselves efficient as primary industries. Such statements are entirely refuted by the annual report of the Tariff Board for the year 1956-57, dated 29th August, 1957. Paragraph 51 of that report deals with the progress of protected industries. The board quotes as an example the case of a huge textile manufacturing concern which was founded in Australia nearly 30 years ago, and publishes a table of figures on the basis of five-year intervals to illustrate the steady growth of this concern. According to those figures the paid-up capital in 1931 was £30,136, but by 1956 it had increased to £3,045,431. The bank overdraft in 1931 was £1,782, and in 1956 it had increased to £1,157,814. Sales had risen in value from £51,324 in 1931 to £11,576,393 in 1956. The dividends in 1936 amounted to £13,335, and in 1956 to £371,194. The board’s report went on. in paragraph 52, to say -

This organization is subject to both local and overseas competition in a market that has always been very keen and it uses raw materials subject to wide price fluctuations. Its solvency, apart from its expansion, demands an efficiency in all departments from the purchasing of raw materials to the disposal of the finished goods which compete with the products of cheap-labour countries.

The paragraph concludes -

The board is aware of a number of similar cases, which provide answers to complaints on the one hand that industries are being stifled by inadequate protection and, on the other hand, that the protection afforded either results in inefficiency or results in excess profits being taken by manufacturers.

Those statements clearly show that the remarks of the honorable member for Moore were made at random and will not bear investigation. As the honorable member for Macquarie (Mr. Luchetti) pointed out, the honorable member for Moore evidently had not taken into consideration the effects of automation in industry in this country, and had given no thought to the revolutionary changes which will take place in the near future in manufacturing industries. Those changes will startle even the experts on the Tariff Board whose duty it is to inquire into these matters in order to determine the protection that should be given to Australian manufacturers.

I do not wish to detract from the value or the efforts of primary industries, but it cannot be said that industries, such as the iron and steel industry, which is protected, are inefficient. The iron and steel industry is selling on the world market at cheaper prices and its products are being produced under better conditions than those in other countries. That industry is a classic example of how an industry can be built up, maintain efficiency and give tremendous impetus to the development of this country. I mention the iron and steel industry at random to show that secondary industries which have their problems can be efficient even though they enjoy tariff protection.

Reverting to primary industries, I mention butter. People in my electorate are subsidizing Australian butter, which is being sold in Great Britain at 2s. Id. per lb., by paying 5s. per lb. for it in this country. I am not reflecting in any way on the dairyfarmers or on those engaged in primary industry generally; but there is plenty of scope for the honorable member for Moore and his colleagues in the Australian Country party to try to bring a little more efficiency into the primary industries so that the Australian primary producer might get a fair return for his products. At the same time, Australian consumers should be given a fair go in respect of the prices they are asked to pay for these products. The consumption of many of these lines is falling daily because of high prices. It should be possible to produce better butter at cheaper prices.

I suggest to the honorable member for Moore that as a member of the Australian Country party he should stay in his own backyard instead of butting into the affairs of manufacturing industries. His party has never favoured protection of Australian industries. It was not until the Labour party introduced tariff measures that secondary industries were saved in this country. The general policy of the Australian Country party has been one of free trade. It does not believe in promoting Australian manufacturing industries. Its supporters only want to sell primary products regardless of who buys them, and they do not care what price the home consumer has to pay. The honorable member for Macarthur (Mr. Jeff Bate) said that he believed in free trade and that the sooner that we got rid. of protective tariffs and matters of this kind, the better it would be for this country generally. I hope that the Australian electors will remember the honorable member’s remarks. If tariff protection is removed from manufacturing industries, many more thousands will be added to the growing queues of unemployed in this country. The majority of workers depend on the manufacturing industries for their employment. As the honorable member for Lalor gave an entirely adequate answer to the charges made by the honorable member for Moore, I content myself with these passing references to his allegations.

One matter concerning Tariff Board reports is of grave moment, not only to the members of this Parliament but to many people who submit to the Tariff Board items for consideration. Undoubtedly, the Tariff Board presents some reports which are not given effect to by the government of the day. I quote, again, from the annual report of the Tariff Board dated 29th August, 1957. It said-


During the year 28 reports furnished by the Board on various subjects were tabled in Parliament. On all but three of these the recommendations of the Board were partly or wholly accepted by the Government and amendments to the Tariff, where recommended, were introduced as Tariff Proposals.

I reiterate that some were not accepted. Evidently, the board took a pretty dim view of that because it went on to say -

The Board realizes that its functions are purely advisory and that the Government is under no obligation to accept its recommendations. It is aware also of the public expressions of dissatis faction by manufacturing organizations and has no wish either to join in the controversy or to suggest that the Government should surrender its tariff responsibilities to an advisory body. It feels, however, that in cases where considerations of overall national interest indicate that duties should not be increased, some thought might be given to advising applicants of this position at an early stage. This could save the industries concerned the expense and effort of preparing and submitting cases to the Board; it would leave the Board free to concentrate on other matters; and it would prevent misunderstandings that the Government, without a full knowledge of vital facts which are invariably contained in confidential evidence, had decided to override the Board.

In paragraph 56 of its report the Board states -

There are indications that the Board will soon be facing the task of dealing with applications for additional protection against imports from Japan. Manufacturers have, in fact, been assured that their claims will be examined by the usual Tariff Board procedure. It seems to the Board to be fundamental to the continued operation of the agreement and to confident acceptance of the assurances to manufacturers that inquiries should not be conducted in the shadow of a fear that the Board’s recommendations, based on full and impartial inquiries and examination of the whole of the evidence - public and confidential - will not, for reasons outside the evidence, be converted to legislation.

I have in my electorate, industries in respect of which the Tariff Board has made recommendations which have been overridden by the Minister of the day. Not only have some manufacturers gone to the wall but industries have been destroyed. I should like to know how many of the Tariff Board’s proposals have been rejected in the last twelve months. I am inclined to think that, in some respects, Tariff Board reports are under the control of a dictatorship in the department concerned. Apparently some of the reports are cast aside without having been given adequate consideration, or they are shelved, or they are completely overridden, as the Board has said, by people who have no idea of the confidential evidence submitted to the experts on the Tariff Board.

These are matters which the Government might consider because, as I mentioned a moment ago, the introduction of automation will undoubtedly lead to new inquiries by the Tariff Board, and its decisions will have far reaching effects on all sections of our economy. I hope that the Minister for Air (Mr. Osborne) will give some assurance that when the Tariff Board makes reports, the attitude of the

Government to them will be explained and that the Government will not shelve these reports, which are made by experts. Honorable members on this side of the chamber take the view that adequate protection is necessary in the interests of the manufacturing industries of this country. Any breaking down of this policy by the present or any other government must inevitably be detrimental to the economy generally and to the welfare of many thousands of Australians.

I particularly recommend that the honorable member for Moore should heed the advice given by the honorable member for Lalor who said not only that tariff protection was necessary but also that, in cases of exploitation, there should be an adequate supervision of prices charged for protected items. The members of the Australian Country party and of the Liberal party who believe in free trade might dwell upon the dangers of that policy and give support to a whole-hearted policy of protection of Australian industries which mean very much to the people of this country.


.- I desire to support the remarks of the honorable member for Moore (Mr. Leslie). I believe that the House is indebted to him for having brought to its notice certain facts concerning tariffs and the present state of the Australian economy. Let me state the policy of the Australian Country party regarding the building up of secondary industries. We favour the establishment and the building up of secondary industries in this country but not at the expense of our foundation industry, primary production. That is clear. That is the Australian Country party policy. The honorable member for Moore did not say that moderate tariff protection was wrong. He said, in effect, that, if tariff protection runs wild it ensures profits for the manufacturers and a standard of living for the employees out of proportion to the remunerations of employers and employees in the foundation industry. Indeed, undue protection may leave the primary producer without profit and without a reasonable standard of living. Regardless of what government is in power this must spell disaster to our economy, especially when the prices of primary products are falling. Do members of the Opposition realize that world prices for primary products are falling? This is a very critical time for the Australian economy.

The honorable member for Moore has been criticized by the Opposition but his remarks were very timely. The Bureau of Agricultural Economics has just stated that the gross value of Australia’s rural output is expected to drop by £159,000,000 for the current financial year. It has also stated that the returns from wool and other products will be 40 per cent, or 50 per cent, below the records of the past. It is at this time that such proposals as the honorable member for Moore has brought forward should be considered by this Parliament. It was rather amusing to me to hear the honorable member for Lalor speaking because he definitely wanted to have a bit each way. Of course, that is quite natural. Although he depends for his majority in the Parliament on metropolitan electors, he also has constituents who are primary producers. Of course he wants to have it each way. So, in trying to overcome the difficulty in which he found himself, he said that the great solution was price control.

We had a debate in this chamber earlier to-day on the banning of the Communist party and I heard Opposition members say that that matter had been settled by a vote of the people. To be consistent in their arguments Opposition members should say that the question of prices control, too, has been settled by a vote of the people; but they change their ground to suit their argument. Everybody knows that when the primary producers prosper the whole economy is sound. But we also know that if protective tariff runs wild the high prices that the primary producer has to pay for the many things that he needs to continue his production will result in a very severe blow being struck at the economy. The primary producer cannot continue to pay for goods necessary to his production at prices applicable to his highest income year.

What is the argument of the honorable member for Grayndler (Mr. Daly)? The honorable member represents a metropolitan electorate and is anxious that the wages of his constituents should be kept at a high level. He is anxious that the protective tariff for the manufacturers whom he mentioned should be kept at its present level irrespective of whether the prices of the manufactured goods are prohibitive to the primary industries that mean so much to this country. This attitude, if implemented, could cause a collapse in our economy. In passing, let me say that recently we heard Labour speaking against the Japanese trade agreement because certain goods were coming into this country. It is noticeable that honorable members opposite have been very quite on that subject recently.

If the textile industry could be assisted without adversely affecting primary industry, then such assistance would have my full support, but everyone should realize that we could have a super-prosperous textile industry in Australia while the rest of the economy was quite unsound. The same situation, however, could not apply in the case of primary industry. Everything we do in this Parliament, therefore, must be from a long-sighted viewpoint, so that primary industry will be kept prosperous and may provide the raw materials necessary for local secondary industries and to fill our export quotas. In this way we will be able to preserve our overseas balances and bring into the country the raw materials that we cannot produce here and which are necessary for the maintenance of our secondary industries, which give employment to those people whom the Labour Opposition always claim to represent so well.

I say to-night that in this debate the Labour party has fallen between two stools. Opposition speakers have said, in effect, “ If we keep tariffs high the wages of our constituents in the metropolitan areas will be kept high “. They do not realize, however, that such a policy may bring about the bankruptcy of the very people to whom they owe their prosperity. I say to the Minister at the table and to the Government that these matters must be seriously considered, especially at a time when prices of primary products have fallen and the primary producer is facing a very lean time. When the primary producer’s income is falling and he is not able to get a profitable price for his products, how can the Labour Opposition hope to keep the prosperity of secondary industries as high as it was when primary producers were receiving record incomes?

These are important subjects and they need careful attention. We do not want to hear flippant speeches such as that which was delivered by the honorable member for Grayndler, whose utterances in this chamber are more amusing than sound or sensible. His attitude was quite different when he was on the Government side of the House. He is like a roaring lion now, but when his party was in power he was like a dormouse. When the honorable member’s party occupied the Government benches he never once spoke against his Government, even though he should have done so on many occasions. To-day, when he knows that his party has no responsibility whatever with regard to what happens in Australia, he speaks as we heard him speak to-night.

If we can keep our tariffs at a reasonable level, so that primary producers may live - and it is a case of live and let live - and produce to their limit, this country will be all right. The Prime Minister (Mr. Menzies) has told us of the great expansion that is occurring in the Australian economy, and even the Leader of the Opposition (Dr. Evatt) has had to admit that our secondary industries have expanded to a very great extent. In spite of this expansion, however, primary products still represent about 90 per cent, of our exports, and secondary industries still contribute only 10 per cent. It is clear, therefore, that it is not the expansion of secondary industries that will build up our overseas balances, which are so necessary to our economy. When our overseas balances recently decreased somewhat, we heard Labour supporters telling us day after day of the very bad position that we were in, and that it was most necessary that those balances should be built up to a high level. They have now been built up again because of good prices for our wool and other products. Opposition members do not seem to realize that the building-up of those overseas balances was made possible only because we produce large quantities of primary products, which account for 90 per cent, of our export trade.


– Order! This is not an economic debate. I suggest the honorable member should get back to the subject of tariffs.


– I agree that it is not an economic debate, but the honorable member for Lalor made reference to a certain subject, and I am sure, Mr. Chairman, that you will, in fairness, allow me to reply to him.


– The honorable member cannot make a whole speech around one reference made by the honorable member for Lalor.

Mr Pollard:

– I do not mind, so long as I am allowed to reply to him.


– The honorable member for Lalor said that the right thing to do was to impose price control.

Mr Pollard:

– I did not.


– Order! I rule that the subject of price control is outside this debate.


– Very well; in that case I cannot answer the honorable member for Lalor.


– Order! The honorable member for Lalor is still interjecting, and he must refrain from doing so.


– It is quite easy to see that the Labour Opposition does not like us to make speeches of this character. Even the honorable member for Kingsford-Smith (Mr. Curtin), who has a snug metropolitan seat, keeps interjecting. This matter does not require any more explanation, Mr. Chairman. I have made my points quite clear. I have stated the Australian Country party’s policy, and, in closing, I wish to state it again. The Australian Country party believes in the building-up of secondary industries, but not at the expense of primary production. The Australian Country party members who sit in this corner of the chamber will continue their advocacy of that policy while they are in this Parliament, which will be while the Parliament exists.


.- Secondary industries in this country, Mr. Chairman, are not built up at the expense of primary industry. In reality, primary industries depend for their expansion to the large extent upon the most important market that is open to them for the sale of their primary products, the home market. A lot of fallacious arguments are put forward as to why we should destroy or whittle away the protection given to industries in Australia to enable them to operate in competition with the cheap labour countries. The honorable member for Mallee (Mr. Turnbull) says, of course, that the answer to the problem is to reduce tariffs so that we may purchase with our overseas balances goods that will enable-

Mr Osborne:

– I rise to order, Mr. Chairman, with some reluctance, because I regret interrupting the honorable member for Scullin. This is not an economic debate, as you have already ruled. It is not a debate on the whole of our tariff policy, but only on certain alterations to the tariff schedule. A certain remark by one honorable member has led to a more detailed discussion of that aspect by another honorable member, and now the honorable member for Scullin, whom, as I say, I interrupt with regret, is opening his remarks as if this were a general debate on tariff policy.

Mr Pollard:

– On the point of order, Mr. Chairman, may I say that the Tariff Board report and schedule involve, after all, the question of protection accorded to Australian industry. The general question of protection is inherent in any discussion involving a report of the Tariff Board. Therefore, I suggest that if the debate has a relevance to the question of protection or, alternatively, free trade, the honorable member is perfectly in order. I suggest that although this is not a general economic debate, in the very nature of things it is concerned with tariff policy.


– I think I can rule on this point immediately. It has always been the general practice of the Parliament, when tariff matters are being discussed, to have a general debate on the first item. A similar procedure is followed with regard to the first item of the Budget when the general Budget debate is conducted. I have been allowing a general debate on matters definitely related to tariff policy, but I must keep honorable members from drifting into an economic debate, or a discussion, for instance, on the welfare of primary production. Such matters are not related to tariff policy in any way.


– The interruption having concluded, I should like to point out now, Mr. Chairman, that I was confining my remarks to one aspect of the question. The Tariff Board has pointed out, in a report laid on the table, that the prices of spare parts for motor vehicles, for example, under tariff protection, have increased abnormally, and that exploitation should not be permitted. The Australian Labour party, of course, stands opposed to such exploitation, and, in its policy, points out, in a few brief words, the methods by which such exploitation can be prevented. However, the party does not intend to allow free traders in this country to undermine the economy, limit the employment opportunities of our people and the expansion of our industries, and hamper the nation’s development, on the plea that tariff protection of all kinds must be abolished in order to prevent exploitation. The two problems are not necessarily connected, and the one course of action is not necessarily the remedy for the problem presented by the other thing.

The honorable member for Lalor (Mr. Pollard) pointed out that the desire to exploit is almost inseparable from big business. If we are not exploited by the home manufacturer, we are exploited by the overseas manufacturer; and if we are not exploited by the grazier and the primary producer at home, we are exploited by the grazier and the primary producer overseas. That sort of thing, of course, is inherent in the capitalist system. But the Australian Labour party believes that it has solutions for these difficulties. It does not propose to kill Australia’s secondary industries which, at present, annually produce greater wealth than is produced by the agricultural and grazing industries, the mining industry, the fisheries, and all the rest of the primary industries combined - and the primary industries provide only the minimum of employment. Therefore, we will not allow free-trade members of the Australian Country party to bring about the insidious destruction of the basis of Australia’s economy by arguing that exploitation occurs.

Mr Turnbull:

– What about exports?


– I am talking about secondary industries. The honorable member asks about exports, and apparently wishes to forget about the secondary industries, which provide the bulk of the wealth on which our economy depends.


– Order! I ask the honorable member to confine his remarks to the tariff matters before the committee.


– The honorable member for Mallee asked me a question, and, since I am the most polite member in this place,

I feel that I should answer him. In 1951, we received the highest prices that we have ever received for our exports.


– Order! If the honorable member does not obey the Chair, and confine his remarks to the subject before the committee, I shall have to ask him to resume his seat.


– The problem is bound up with the tariff, because, at the time that I have mentioned, imports absorbed our overseas funds. Exports totalled about £900,000,000 annually, and yet our overseas funds were dissipated month by month until the Prime Minister (Mr. Menzies) considered it necessary to tell us that our economy was in danger.


– Order! I ask the honorable member to get back to the subject before the committee. He will not be allowed to make a budget speech while I am in the chair.


– I shall obey the Chair to the best of my ability. I want to state the Labour party’s policy on tariffs.

Mr Hamilton:

– Which Labour party is the honorable member talking about?


– I am talking of the Australian Labour party. Its tariff policy is written in its platform that all who run may read. The Labour party believes in the protection of Australian industries. It believes, also, as my friend, the honorable member for Lalor has pointed out, that a necessary corollary of protection is some form of control of profits or prices. If such a policy had been adopted, the difficulty enunciated by the Tariff Board would not have arisen, and it would not have been necessary for the board to point out that, while it protects the automotive industry, spare parts and other articles manufactured and sold in this country are being sold at prices so high that they amount to exploitation of the consumers. Such a thing could not happen under a policy that protected the industry, the worker, and the consumer, by providing the new protection upon which the Australian Labour party bases its tariff policy with respect to Australia’s secondary and primary industries. That, of course, is” the best method of attacking the problem.

I am afraid, Mr. Chairman, that if I endeavoured to point out clearly to members of the Australian Country party the errors of their ways you would probably feel that I was taking advantage of your natural generosity towards me. But I emphasize that all the statements about tariffs made by the honorable member for Moore (Mr. Leslie), and the honorable member for Mallee, were absolutely incorrect. The people should know that the statements made by those honorable members were at variance with the facts. I hope to make very clear to members of the Australian Country party the error of their ways when I next have the opportunity to make a budget speech in a debate in which I am sure, you, Sir, will allow me considerably more latitude.

Minister for Air · Evans · LP

– I do not want to go at length into the general matters of tariff policy that have been raised this evening, but I should just like to answer the honorable member for Scullin (Mr. Peters).

Mr Peters:

– The Minister cannot answer me; I was out of order.


– Contrary to my view, the honorable member was ruled out of order. I hope, Mr. Chairman, that that remark will not be considered to be a reflection on the Chair. If it were I should withdraw it. Members of political parties can talk about their policies and their beliefs, but it is on their practices and the administration of the governments supported by them that they are judged. Any one who wishes to know the views of this Government about the building up of Australian industries, both primary and secondary, has only to look at the advances made by this country, and the benefits gained by the ordinary Australian man and woman, over the last eight years - eight years of magnificent progress and development such as this country has never even dreamt of before. Even the loud voice of the honorable member for Kingsford-Smith (Mr. Curtin) finds it difficult to persuade Australian citizens to-day that they are impoverished and downtrodden.

To come back to the tariff proposals, the committee has been debating a series of proposals to vary the tariff schedules with respect to a wide variety of subjects. In this debate, the committee, naturally, has concerned itself mostly with the Tariff Board’s reports and the consequent legislative action on the motor industry. A notable exception has been my friend the honorable member for Robertson (Mr. Dean), who referred to the duties imposed on passionfruit juice and pulp. I was glad to learn from his remarks that the people he represents in the constituency of Robertson which, as we know, contains the largest group of passionfruit-growers in this country, are in general satisfied with the tariff alteration. I point out to the honorable member that they have the right to refer the matter again to the Tariff Board at the end of the two years, if they so wish.

However, most of the debate has naturally been concerned with the automotive industry. As I pointed out at the beginning of these discussions, the purpose of the change has been to simplify and rationalize the methods of charging duty on motor cars and motor car parts coming into this country. The tariff structure on the motor industry is as old as the industry itself and has become nearly as complex. I shall not cover again the ground of the many tariff items under which a fully assembled motor car had to be judged. The changes have been very well received, not only by the Parliament but also by the industry itself. Although I do not believe that the task of assessing duty on a range of products as complicated as those which make up a motor car can ever be entirely simple, nevertheless it has been very greatly simplified.

The honorable member for Melbourne Ports (Mr. Crean) had some critical remarks to make about the long time which the Tariff Board has taken to produce its report, but in justice to the board I would point out it was by no means occupied on this matter for the whole of the three years which intervened between the beginning and the end of the inquiry. There were considerable adjournments, very often at the request of the industry itself. One can readily understand that in a matter so important and complicated time is required for the presentation of a case.

Mr Pollard:

– One part of the industry wants rapid progress in the inquiry but another part does not care. To which part are you referring?


– The honorable member may have some justification for what he says. I concede that a matter as involved as this does take a long time to inquire into. A tariff system which has been in operation for some 30 years cannot be altered overnight without a great deal of detailed inquiry. The honorable member for Melbourne Ports and the honorable member for Lalor (Mr. Pollard) both drew attention to the statement of the board about high mark-ups. The honorable member for Lalor wants an authority to deal with the motor industry independently of the Tariff Board. He has not said what sort of an authority he wants, nor what constitutional power such an authority would have. As we all know, the Tariff Board operates under the constitutional power to charge duties of customs and excise. I think there would need to be a much wider constitutional field than is at present available for the sort of activity he contemplates, even if it were desirable. I think the true answer to the problem of the very high mark-up mentioned by the board on one motor part is in the force of public opinion and the development of the motor industry itself. I have no doubt that the remarks of the board will have a considerable effect in that respect, as I am sure the board realized when it included those remarks in its report.

The honorable member for Lalor tried to build up an argument that competition in the motor industry is reducing in Australia. I believe that to be quite wrong. He has only to consider for a moment the large number of manufacturers of motor cars who have established large plants in Australia in recent years. If he considers the degree of manufacture of motor cars which existed even five years ago and compares it with the number of of types of cars which are partly or wholly manufactured in Australia now, he will see that there has been a very wide development of the industry and a very considerable increase in the competition between Australian manufacturers of motor cars and motor car parts. I believe that the true answer to the problem of high mark-ups is not the establishing of an elaborate authority for which there is no constitutional power, but the force of public opinion and buyer resistance on the part of the public when it knows of this development in the Australian industry.

I should like to turn now to the remarks of the honorable member for Chisholm (Sir Wilfrid Kent Hughes) about the case of an importer of a type of expensive continental sports car, who had some cars on the water which he had, according to the honorable member for Chisholm, sold before their entry into Australia, and who had to bear a considerable increase in cost due to the alterations in duty. I point out, first, that tariff changes cannot be made without having adverse effects on some people and favorable effects on others. It is not possible to make a wide rationalization or simplification of the tariff system, which has been in operation for many years, without producing differing effects on different people. As I have explained before to the committee, for many years duty was charged, not on the complete motor car or on a small list of parts, but on a very wide list of components. It so happened that there was a fixed duty on chassis, and a fixed duty on bodies, in the case of imported assembled cars, so that a very expensive car attracted the same amount of duty on the body and on the chassis as did a relatively cheap car. In the case of light sports cars, this operated with particular advantage. It had the result that the very expensive luxury car could be imported at a relatively small additional cost in customs duty. The whole purpose of this change is, so far as practicable, to put an assembled car brought into Australia on an ad valorem rate of duty, which takes into account the total value of the car and not the value of its innumerable parts. The particular make of car to which the honorable member for Chisholm referred had a very great duty advantage under the old system, although it was an expensive, luxury sports car.

It is quite impossible to make exceptions in tariff matters. The honorable member for Chisholm suggested that some discretion to deal with cases of this sort should be vested in the Minister. It is quite contrary to the very basis of tariff administration that such a thing should occur. The whole basis of tariff administration is that it must be the same for one person as for another, and it admits of no exceptions. In this country the long-standing practice has been to impose new duties on the morning following the introduction of the tariff proposals into the Parliament. As members of the committee know, the proposals are generally tabled in the House about 4 o’clock in the afternoon, after the warehouses have closed, and the duties become operable at 9 o’clock the next morning. The Government certainly would not favour any action to vary this practice in any particular case. If the new duties were suspended on one motor car, they would have to be suspended on other motor cars, and such a course would be quite impracticable. I am sure that members of the committee will realize that at once when I tell them that the effect of these alterations has been to reduce the duty on some motor cars and to increase the duty on others. Just as the expensive luxury motor car bears a much higher duty under the new system, so the relatively cheap motor car, imported assembled, bears a lower duty. Just as the importer to whom the honorable member for Chisholm referred will pay higher duty, so importers of less expensive cars, who had them on the water at the time the new duties were introduced, will pay lower duty. The operation of the duty could not be suspended in the case of the man who has to pay higher duty without, at the same time, an extra burden being imposed on the man who has the cheaper car. It is regrettable that a man engaged in commerce should suffer this misfortune, but there is no escape from such things under a tariff system operated uniformly. It is by no means the first occasion on which a tariff change has operated adversely to some one, and I can see no escape from the situation that has arisen.

The honorable member for Chisholm said that these particular motor cars had been sold while on the water. There is provision in the Customs Act enabling the importer, who has sold the imported articles before they have been entered for home consumption, to pass on the additional cost of an increase in duty. So it is not necessarily correct to say that the whole amount of the duty must fall on the importing merchant.

I appreciate very much the commendation expressed by the honorable member for Bendigo (Mr. Clarey), and repeated by other honorable members on both sides of the committee, of the work of the Tariff Board in its very comprehensive and important inquiry into the automotive industry. It is only fair to point out that the board was acting on a departmental submission of the then Department of Trade and Customs, which had been working on the matter for many years. The departmental submission was made before the division of the old Department of Trade and Customs into the new Department of Trade and Department of Customs and Excise. It is an indication of the department’s endeavours to simplify procedure whenever possible. The work of the departments concerned with the imposition and collection of customs duty is being greatly simplified, and this will lead to better administration of those departments and to much easier practice in the commercial and industrial community. The new method of assessing duties will undoubtedly save an enormous amount of work not only for the Department of Customs and Excise, but also for all sections of the commercial community concerned in the importation of motor vehicles and motor parts.

Question resolved in the affirmative.

page 1049


Customs Tariff (Canadian Preference) Amendment (No. 1)

In Committee of Ways and Means: Consideration resumed from 20th March (vide page 537), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Canadian Preference) 1934-1956 be amended . . (vide page 535).

Question resolved in the affirmative.

page 1049


Customs Tariff (New Zealand Preference) Amendment (No. 1)

In Committee of Ways and Means: Consideration resumed from 20th March (vide page 535), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1957 be amended . . . (vide page 535).

Question resolved in the affirmative.

page 1049


Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Amendment (No. 1)

In Committee of Ways and Means: Consideration resumed from 20th March (vide page 538), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (Federation of Rhodesia and Nyasaland Preference) 1956 be amended . . . (vide page 537).

Question resolved in the affirmative.

page 1050


Excise Tariff Amendment (No. 1)

In Committee of Ways and Means: Con sideration resumed from 20th March (vide page 538), on motion by Mr. Osborne -

That the Schedule to the Excise Tariff 1921-1957 be amended . . . (vide page 538).

Question resolved in the affirmative.

Standing Orders suspended; resolutions adopted.

Ordered -

That Mr. Osborne and Sir Philip McBride do prepare and bring in bills to carry out the foregoing resolutions. [Quorum formed.]

page 1050


Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 1050


Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 1050


Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 1050


Bill presented by Mr. Osborne.

First Reading

Motion (by Mr. Osborne) proposed -

That the bill be now read a first time.


– Order! The honorable member will resume his seat. The question is -

That the bill be now read a first time.

Mr Ward:

Mr. Speaker, I direct attention to the state of the House. We cannot pass legislation without a quorum being present. [Quorum formed.]

Question resolved in the affirmative.

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

page 1050


Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.

page 1050



Debate resumed from 20th March (vide page 540), on motion by Mr. Osborne -

That the following reports: -

Automotive industry,

Metal working shaping machines,

Plywood, and

Textile dyeing, bleaching and finishing - be printed.

Question resolved in the affirmative.

page 1050


Second Reading

Debate resumed from 16th April (vide page 908), on motion by Sir Arthur Fadden -

That the bill be now read a second time.


.- I rise to support this measure on behalf of the Opposition. At the same time, I wish to direct the attention of the House to the unimaginative approach of this Government to the problems of the north-west, as is indicated by the amount that is to be provided under this bill. Last November, the Prime Minister (Mr. Menzies) announced that £2,500,000 would be granted to Western Australia over a period of five years to promote development of the area of the State north of the twentieth parallel. This bill, which was introduced by the Treasurer (Sir Arthur Fadden), is to give effect to that decision.

In introducing the bill, the Treasurer said that the Commonwealth Government concluded that the area concerned presented special financial problems for the Western Australian Government, and that, if this development was to proceed at a faster rate, some direct Commonwealth assistance was necessary. That is a welcome admission, although it is very belated. At long last, something is to be done for the north-west. In June, 1955, an allparty delegation from Western Australia waited on the Prime Minister and submitted several proposals to him for the development of the north-west. He now admits, of course, that the Commonwealth Government has some responsibility for this matter, but he does not account for the fact that three years elapsed from the time the all party delegation met the Prime Minister before anything was done. The Government should have been anxious and willing a long time ago to do something about the neglected north-west. This measure should not have been pushed into a pigeon-hole and left there for three years.

The replies to questions that I asked about the all party delegation were evasive. Delaying tactics were used, and now only a partial reply has been given. All the matters introduced by the delegation have not been dealt with even now. The delegation asked for financial assistance for the Ord River dam and an associated irrigation scheme. It asked for financial assistance for the development of a deep-sea port at Black Rocks near Derby, and for the development of other jetties. It pointed out that financial assistance was needed to enable additional ships to be placed on the north-west run. It stressed, as had a previous delegation from the northwest, the need for taxation concessions above the 26th parallel and emphasized, as did the previous delegation, the need for special assistance for roads in the northwest. The Prime Minister said that each item would be considered and that he would give decisions, not necessarily concurrently, as early as possible. I direct the attention of honorable members to the fact that “ as early as possible “ apparently meant three years. No specific replies have been given to the matters that I have mentioned.

It is true that £2,500,000 has been granted. This amount is to be made available over a period of five years. That means that an average of £500,000 a year will be available for works approved by the Commonwealth. Of course, it will provide for some of the matters that I have mentioned. From information received, it appears that the State Government has already indicated that, subject to the approval of the Commonwealth, it intends to spend some of the £2,500,000 on the development of a deep-sea port at Black Rocks, which will cost approximately £1,500,000, and on the development of the Wyndham jetty. It intends to spend the balance of the £2,500,000 on jetty facilities in the Napier-Broome bay, which is near the northerly tip of the State. According to the information that I have, that is as far as the money will go, and I do not think that any one could say that it would go any further.

This money provides for a most important first step in the development of the northwest. A deep-sea port is essential. It will serve certain areas of the north-west where there are many pastoral stations and will be most suitable for the development of the cattle and beef industries of the west Kimberleys. But what about the other developments that require the urgent attention of this Government? They are needed if the north-west is to be populated some time within the next twenty years or so. For instance, the Ord River dam is a most important matter. It is estimated that the construction of the dam, with reticulation works, would cost approximately £10,500,000. Developmental works on the farms would cost about £7,200,000. The total amount involved in that very important work would be about £18,000,000. That seems to be a big sum, but, if it is considered as a charge against the national effort to encourage the development of the north-west, it is not so large. Certainly it is not out of proportion to the needs of the area.

The information supplied by the Department of National Development reveals that the output of the Ord River is tremendous. It is claimed to have the tenth greatest flood outflow in the world. That valuable water is being wasted in an area where water is urgently needed. The capacity of the proposed Ord River dam is 3,000,000 acre feet, with an annual draw of 75,000,000 acre feet and with water coming over the crest at the rate of 300,000 gallons a second. That is a lot of water, and in my opinion it is a national crime to let it go to waste, lt has been going to waste for a long time, but now that we want to do something about the north-west, no answer is given to the very sound proposal submitted by the all party delegation.

The aim of damming the Ord River and of the irrigation scheme associated with it is to encourage sugar cane and rice farming. It has also been suggested that, as time goes on, provision could be made for a sugar mill in the area. Honorable members who have been to the area will realize that the soil will grow anything. A visit to the experimental station near the Ord River would surprise honorable members and I recommend to those who have not been there that they go and see for themselves just what can be grown in the area. The Government, I suggest will all respect, should be prepared to spend £18,000,000 on this project. It would not be a strain on the national finances. It would mean spending about £2,000,000 a year for nine years, and this expenditure is warranted. The amount spent on the Snowy Mountains scheme in this year alone would more than meet the total cost of the Ord River dam and the works associated with it.

The completion of the Ord River dam would mean a new economic and social order in the Kimberleys. The supply of foodstuffs for domestic consumption would be improved, as would the supply of foodstuffs for export. This would result in some improvement in our overseas balances. The estimated farm population in the area would be about 2,400, but the town population on reliable figures, would be 20,000. That is about 14 times the present white population of the Kimberleys. The point that I emphasize is that the State cannot go it alone. The State cannot possibly provide finance on the scale that is needed. Federal assistance is required, and the Government should not be apathetic about this scheme, which will do more than anything else to populate the north-west. Despite the importance of the request no reply has been received to the very effective case put forward by the all-party delegation.

I shall deal now with another matter that needs emphasis. An efficient transport system is urgently needed in that area; but we cannot have efficient transport in such an area unless the roads are of a reasonable standard. One of the round-Australia reliability trials a few years ago emphasized the bad state of the roads, not only in the north-west of Western Australia, but in northern Australia generally. It also emphasized the immensity of northern Australia, its vulnerability and the danger in which we may be placed should we be threatened, as in World War II., with invasion by the hordes that lie to our north.

The all-party committee asked that special financial assistance, on a £l-for-£l basis, be given to provide for certain roads in the north-west. Better roads there would mean that vehicles would be less easily damaged, which is a great consideration in an area where the cost of vehicles and replacements is so heavy. It would also mean that more wool and metals could be freighted by rail instead of having to come by sea, as at present.

I know that many honorable members believe that Western Australia is already quite well served with roads. But a comparison of Western Australia’s area with its population shows how inadequate is the provision of roads there, particularly when the vast area of the north-west is taken into account. Victoria has an area of 87,884 square miles and has 104,630 miles of roads, whilst Western Australia, despite its huge area of 975,920 square miles, has only 83,777 miles of roads. Western Australia covers one-third of the Commonwealth, but has a comparatively small mileage of roads. The result is that the north-west of Western Australia, a vast area, suffers from neglect. That is another matter upon which the delegation received no reply.

As I emphasized in my opening remarks, additional financial assistance was asked for in respect of shipping services for the northwest. There is always a shortage of cargo space for the north-west’s requirements, as well as great inadequacy of passenger accommodation. The Western Australian State Shipping Service is run at a loss. The loss is deliberate, because the freight rates charged represent a subsidy. If the higher rates for freight were charged, the people of the north-west would have to suffer even more than they do now. So the rates are kept low, in the form of a subsidy, to encourage development of the north-west. A private concern would not run ships to that area, for the simple reason that the service could not be run at a profit. The Western Australian Government is running the service, however, at an annual loss of about £900,000.

I shall give an example of how freight charges on the Western Australian shipping service are well below cost. It costs £8 2s. 6d. a ton to send cargo by sea a distance of 1,768 miles from Fremantle to Wyndham. It costs a Queenslander £10 2s. 6d. a ton to freight goods from Brisbane to Cairns, a distance of 850 miles, or less than half the distance between Fremantle and Wyndham. It costs more to send goods by sea from Melbourne to Fremantle, a distance of 1,681 miles, than it does to send them from Fremantle to Wyndham on State ships. The freight charged between Melbourne and Fremantle is £8 16s. 6d. a ton. These points are worth considering, because it would not be possible to run a shipping service to the north-west of Australia if it were expected to pay its way.

Due to geographical features, the majority of the ports in the north-west are relatively unprotected, with the result that their facilities are subject to frequent damage by cyclones, which leads to heavy expenditure on maintenance. Honorable members recently saw evidence of the terrific damage caused at Onslow by a cyclone and know of the tremendous expense involved in restoring the facilities of that port. But even the cost of normal maintenance of harbour facilities in north-west ports is more expensive than in other parts of Australia because, as is recognized, maintenance expenditures in tropical waters are always heavier than elsewhere. I leave that matter there, emphasizing that no mention was made of it in the Prime Minister’s reply to the request submitted by the all-party delegation.

Another matter raised by the delegation, and also by the committee from the north-west, was the possibility of making the area north of the 26th parallel a tax free area. That would have meant that all wage and salary earners north of the 26th parallel would have been free of income tax. Part of the suggestion made was that 60 per cent, of the incomes of all business enterprizes in the same area should be free of tax and that the remaining 40 per cent, should be free of tax also if it were reinvested in the north. It was suggested that the tax free period should be from 10 to 20 years, with a preference for 20 years. Had that suggestion been agreed to, the concession would have applied not only to the north-west of Western Australia, but also to the Northern Territory and to that part of Queensland which lies above the 26th parallel. The Prime Minister claims that the fact that no concession was granted in budgets submitted to this Parliament since the all-party delegation met him is an adequate reply to questions about the matter. But the facts are that a specific request, supported by substantial information, was made and was ignored.

The committee emphasized that relief from taxation is essential in an area like the north-west of Western Australia in order that capital and the competent work force required to develop the north may be attracted there. The fact that the Government increased the A and B zone concessions in the last year or two, indicates that tax concessions are needed in the northwest. But the taxation concessions applying to the A and B zones are entirely inadequate, and I am quite certain that they would not be responsible for attracting anybody to those zones.

It is estimated that the cost to the revenue of adopting the suggestion for a tax-free period would be £2,000,000 a year. That is not a great deal in comparison with this financial year’s Budget of £1,347,000,000. It would, however, have benefited the northwest by attracting capital there. It would have meant that more people would have gone there. It would have been a step that would have been well worth while - one that will be well worth while in the future.

People do not just go to the north-west. Workers, pastoralists and the like have to be attracted there. Once there, they and the people already there will spend more on amenities if they do not have to pay high taxes. They are entitled to expect decent amenities in those areas, just as people in the south are entitled to expect decent amenities. The simple fact is that people will not go to such areas if they cannot get decent amenities, because they know they can get good facilities and amenities in the southern part of Western Australia and the southern part of Australia generally. In the south, they can get better schooling, for instance, better medical attention, better food and can enjoy better climatic conditions. Also, of course, costs are much cheaper in the south. People will not go to the north-west unless they are put in a position to provide themselves, to some extent at least, with amenities available in the south. The best way to enable them to provide themselves with these amenities would be to make them a taxation concession which would leave them with more money to spend on amenities. There is urgent need for all types of people in almost every walk of life in the northwest. This would follow an increase of population together with the full development of all the resources of this vast area. Good conditions will attract people there, and keep them there. But, of course, no reply was received on that very important matter.

While the delegation was dealing with taxation it was suggested also that the payroll tax should be abolished in that area in order to attract labour to industries which are now obliged to pay above award rates in order ot attract employees. Workers will not readily leave the south. The result is that the employers are imposing on themselves a higher pay-roll tax than is payable for similar work in more attractive parts of the State. A request was made for the removal of sales tax on vehicles and plant used in production in that area, but no reply was received on that point. As I have said, I am not suggesting for a moment that the tax freedom asked for should operate indefinitely; and the delegation did not make such a suggestion. The proposal was that it should operate for a longer period, say ten or twenty years. I hope that this very important concession which could do so much for this area, will be reconsidered when the coming Budget is under review.

One thing that would help the development of the north-west considerably would be the discovery of oil. This would not assist in solving the traditional problems of the north, however. For example, it would not have much effect on the pastoral, agricultural and metal industries. It is disturbing to hear suggestions that the search for oil may be discontinued. The reason is that not sufficient encouragement is being given in the search for oil. It is true that the Government, only in the last session of this Parliament, decided to spend £500,000 a year on deep drilling. That money is being used to subsidize private companies. It is estimated that £500,000 a year will be sufficient to sink only three holes a year. The number of holes put down in Australia already is approximately 400, of which 120 are shallow holes in the Lakes Entrance area. Honorable members may be interested to know that 2,000 holes were drilled in the Sahara before oil was discovered, and more than 3,000 were sunk on Alberta oil-fields before results were achieved. The trouble is that in Australia oil exploration is being played with instead of an all-out drive being made.

Mr Hamilton:

– Has the problem of leases any effect on the search for oil in the north-west?


– Maybe it has. This is an important problem and we should be trying to drill more holes than is the case at present. Australia is spending £120,000,000 a year on oil imports. The consumption is increasing each year and over the last five years the average rate of increase has been about 10 per cent, per annum. This has caused a serious drain on our overseas resources. I emphasize the fact that in time of war, if ever such an unhappy period should come again, Australia would be very vulnerable if it were cut off from oil supplies from the Persian Gulf and Indonesia. This is an urgent matter in the light of rumours now prevalent that the search for oil in Australia may be terminated.

I wish to emphasize another point- One would think that a government which is not prepared to do a great deal for the north-west would at least do nothing to harm it. The Government, however, up till to-day, was allowing pearl shell beds to be depleted. The Broome shelters face grave threats to their future as a result of the Japanese pearling fleet being allowed to take 100 tons of pearl shell from Broome waters last season. Authentic sources at Broome suggest that much more than that was taken, and as a result extreme harm was done to the pearling beds. There are only a few shell banks of any consequence in that area and the Broome divers foster them because they know that every few years they have to go back to them.

About two weeks ago I raised this matter with the Minister for Primary Inudstry (Mr. McMahon), and I was pleased to-day when he announced that he had informed the Government of Western Australia that the Japanese will not be allowed to return to this pearling area this year. Of course, this is an election year. I hope that the Japanese will not be allowed to come back next year either. If they are, and the shell banks are treated as they were treated during last season, it will be the end of the pearling industry. This industry is a valuable dollar-earner for Australia. In 1956-57, Australia received 1,366,137 dollars for pearl shell, most of which came from Western Australia. Those figures are contained in the latest issue of “ Fisheries News “, a copy of which I have before me. I am pleased that at long last as a result of repeated requests to the Government, it has decided to protect these pearl shell beds for this season.

An important matter to which this Parliament should give its attention is the defence of the north. Transport has already been mentioned, and this is necessary in the first place for defence. But not only should the direct needs of defence be met in respect of mobility and accessibility for our armed services; there is also an indirect need which must be considered. If we are going to hold the north we must do something about it. Our northern defences have never been worse. Along the whole of the northern coast of Australia, from Cairns to Carnarvon, there is practically no defence. No planes or ships, and very few army personnel, are stationed along that vast coastline. A ridiculous aspect of Australia’s defence generally is that most of our forces are stationed in the southern and eastern portions of the continent where no threat at all exists and where it is most unlikely that any will arise. The most likely direction from which attack would come is from the north. Australia could find itself in circumstances similar to those during the last war when it was almost invaded by a big drive from the north. But apparently the defence authorities have learned nothing from that incident, judging by the standard of the existing defences in the northern parts of this great continent. If we cannot look after it, we do not deserve to hold it; and the sooner the Government does something about the matter the better it will be for Australia.

The north-west lies close to Indonesia, and to the Cocos Islands and Christmas Island which are owned by Australia. It is close, also, to the Monte Bello Islands. Inland, it is close to a section of the Woomera rocket range. Army surveys are going on in that area and this indicates that the north-west is becoming more important, strategically. I emphasize again that if we are to hold the north we must populate and develop it, and we must do so quickly. Judging by the amount of financial assistance that is being provided for under this legislation, however, I am quite satisfied that the objectives which we are seeking will not be attained.

Australian and British scientists have recently made progress towards harnessing thermo-nuclear power for developmental purposes. Professor Oliphant has pointed out that the application of this power to the distillation of sea water is of vast significance to the future development of Australia. This has an important bearing on the problems of the north, and may mean that their solution is within reach. If we can overcome the water shortage and provide cheap and abundant atomic power, a tremendous advance would be made in solving the problems of the north. It may take a long time before that stage is reached, but the outlook is very hopeful in view of the scientific progress that is being made.

In 1956 the “West Australian” newspaper organized a tour of the north-west to enable representatives of the press to see the lack of development in, and the tremendous potentialities of that area. The aim of that tour was to promote a nationwide public and political interest in the area. It was a very good move and I feel certain that it had some effect on this legislation being introduced at this time because it served to publicize, through the press of Australia, the desperate plight of that vast area. I hope that the Federal Government will follow the lead of the “ West Australian “ and organize a tour of the north-west during the winter recess, not only for rank and file members of Parliament but also for Ministers. It should be a fairly big delegation, such as the party organized for the press.

I hope that the Prime Minister (Mr. Menzies) will go and see the north-west of Western Australia for himself, because I feel certain that if he went there and saw the lack of development, he could not fail to do something more substantial about it than the proposals contained in this legislation. I understand that he will go to Western Australia shortly. I hope that when he goes there he will take the opportunity of visiting the north-west, and I do not mean visiting only one or two ports. That will not be sufficient. He should get around the north-west, not just drop in and drop out again.

Mr Failes:

– I think he might be there.


– I hope that he will go there. The suggestion has been made in this Parliament that the whole of northern Australia should become a Commonwealth territory. When I say “northern Australia” I mean the north-west of Western Australia, the Northern Territory, and parts of northern Queensland. But I do not think that that is the answer to this problem because the Commonwealth has not indicated by its administration of the Northern Territory that it would be prepared to do any more if it had all of that area under its control. If finance could be supplied, I think that the Government of Western Australia would be the best authority to develop the north-west. Members of the Western Australian Parliament from the north-west understand that area much better than do the majority of the members of this Parliament for the simple reason that we have not all had the opportunity of going there.

I am not suggesting that some Western Australian members of this House are not impressed with the needs of that area. However, it would be far better for the Western Australian Government to do the job of development than it would be for the Commonwealth to do it, but surely the Commonwealth must provide the finance. At the moment, it is beyond the capacity of any State government to supply the finance necessary for a campaign of vigorous northern development. The niggardly amount that is provided for in this legislation will not solve the problem of the north.

I am not suggesting that nothing has been achieved in that area. Apart from the search for oil, the whaling industry has been developed and Yampi Sound and Wittenoom Gorge mineral deposits are doing well. The air-beef scheme has been inaugurated. But, as a whole, the north is largely dormant and needs stirring up. It can only be stirred up by a more sympathetic approach by the Australian Government. We have to look at the north with a national outlook. Things are happening very fast in Asia, and if we do not develop the north someone else will. We may not have much time. If we do not take full advantage of the few years that are left to us it may be too late. The Commonwealth Government must get out of its apathetic attitude towards the north and accept the development of that area as a national responsibility and therefore as one that is the responsibility of the Australian Parliament. I say, on behalf of the Opposition, that we support this measure because it does give some added financial assistance to the north-west. But, at the same time, I deplore the inadequacy of the amount.

Debate (on motion by Mr. Cleaver) adjourned.

House adjourned at 10.45 p.m.

page 1056


The following answers to questions were circulated: -

Transfer of Department of Air to Canberra

Mr Bryant:

t asked the Minister for Air, upon notice -

  1. What are the plans for moving to Canberra the sections of his department at present located in Melbourne?
  2. What are the expected dates of removal of each section?
Mr Osborne:

– The answers to the honorable member’s questions are as follows: -

  1. The proposed transfer of elements of the Department of Air to Canberra is part of the scheme to transfer policy elements of the defence group of departments announced by the right honorable the Prime Minister in this House on 4th April, 1957.
  2. As indicated in that announcement the plan is to move about half of the transferees early in 1959 and the remainder some months later in that year. I understand that the construction of houses and the completion of the administration offices are proceeding and there is every indication that the transfers will take place at the times planned. The Department of Air is taking action to ensure that personnel to be transferred will be given adequate advice of the date of transfer. A Personal Problems Committee has been established to give advice and assistance to members of the staff and to ensure a smooth transfer of these officers and their families to Canberra.

Shipbuilding Subsidies

Mr O’Connor:

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

  1. What has been the cost of the shipbuilding subsidy since its inception?
  2. What has been the amount of subsidy paid (a) to private enterprise and (b) in respect of orders placed for (i) State governments and (ii) Commonwealth instrumentalities?
  3. What is the amount which it is anticipated is still to be paid on account of shipbuilding contracts not yet completed?
Mr Osborne:

– The Minister for Shipping and Transport has replied as follows: -

  1. The cost to the Commonwealth of the shipbuilding subsidy paid on vessels built through the Australian Shipbuilding Board since its inception to 28th February, 1958, was £10,478,984.
  2. The dissection of this subsidy cost between vessels built for private owners, State and Commonwealth instrumentalities is (a) Private, £2,198,672; (b) State, £540,453; (c) Commonwealth, £7,739,859.
  3. The future cost to the Commonwealth of the subsidy in respect of contracts not yet completed is expected to amount to £5,547,057.

Pensions in Mental Institutions.

Mr Griffiths:

s asked the Minister for Social Services, upon notice -

  1. Does the Commonwealth Government subsidize in any way the upkeep and maintenance of age and invalid pensioner patients in State mental institutions?
  2. Are pensions suspended when pensioners are admitted to mental institutions; if so, why?
  3. Is the payment of pensions continued when pensioners are inmates of general hospitals, private hospitals, convalescent hospitals or infirmaries; if so, how is the pension distributed?
  4. Does the Government subsidize the hospitalization of pensioner inmates of any of the institutes referred to; if so, what is the rate of subsidy?
  5. If pensions are suspended when pensioners are inmates of mental institutions, but not when they are in hospitals and infirmaries, what are the different needs of these two classes of pensioners and why are they treated differently?
Mr Roberton:

– The answers to the honorable member’s questions are as follows: -

  1. No. Successive Commonwealth governments have taken the view that the upkeep and maintenance of inmates of State mental institutions is the responsibility of the State governments. The present Government is, however, providing substantial financial assistance towards the capital costs of State mental institutions. Under the State Governments (Mental Institutions) Act 1955. the sum of £10,000,000 is being allocated to the States towards a capital expenditure programme ot £30,000,000 spread over ten years.
  2. Yes, but payment of up to four weeks of the period of suspension is made available on the pensioner’s discharge. Payment of the pension isnot made while the pensioner is in a State mental institution, because his maintenance is then the responsibility of the State government.
  3. Yes. Payment of the pension may be made by cheque forwarded to the address nominated by the pensioner or the pensioner may appoint some person to collect the pension on his behalf.
  4. The Commonwealth pays the States a hospital benefit of 8s. per day in respect of each pensioner who is a qualified patient in a public or approved private hospital. An additional 4s. per day is payable if the pensioner is enrolled in the Pensioner Medical Service or is a member of a registered hospital benefit organization. The provisions of the National Health Act relating to hospital benefits do not apply to mental hospitals, conducted by a State or in receipt of a grant for maintenance from a State.
  5. As certified patients in mental hospitals are not “ sui juris “, pensions could not be paid to them directly but would have to be paid to the Master-in-Lunacy. The Commonwealth view isthat the payment of a pension to a State government authority on behalf of an inmate of a mental hospital, whether directly appropriated by the State towards the cost of his maintenance, or whether paid into a trust account administered by the State for his welfare, would amount to a subsidization of State funds for the discharge of a State function.

Cite as: Australia, House of Representatives, Debates, 17 April 1958, viewed 22 October 2017, <>.