House of Representatives
29 March 1960

23rd Parliament · 2nd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

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– I wish to ask the Prime Minister a question, without notice. Has the right honorable gentleman’s attention been directed to the disastrous cyclone damage in Carnarvon, Western Australia, and is the Commonwealth Government taking any steps to assist the citizens of Carnarvon in this crisis?

Prime Minister · KOOYONG, VICTORIA · LP

– I have observed with great regret the newspaper reports of this incident, but I have not yet, so far as I know, had a communication from the Western Australian Government. As the honorable member knows, such a communication is usually the first step in coming to any arrangement.

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– My question is addressed to the Prime Minister in his capacity as Minister for External Affairs. In view of the wave of publicity in respect of events in South Africa, can the right honorable gentleman throw any light on the situation?


– We have, as yet, very little information beyond what has appeared from other sources,, but I think it is propel that I should say that we deplore these recent events in South Africa. They have involved the loss of many lives and they have, very naturally, stirred deep feelings in the hearts of very many people around the world. We welcome the institution by the Government of South Africa of judicial investigations into the two more recent major incidents, and most of us will wait with eager interest the result of those investigations, which should, I believe, provide us with an authoritative account of the facts, and some findings, one might suppose, on the question of responsibility.

At the same time, having said that - we all have very profound feelings on this matter - I think I should say as head of the Australian Government that two things might be borne in mind. The first is that we in Australia, so far as we can, should avoid saying things or promoting things which will exacerbate a state of affairs which is already sufficiently menacing in South Africa. The second thing is that I should offer a word of warning against the danger of abandoning certain principles which are of very great importance not only in the British Commonwealth of Nations but also in the world at large - principles which have done much to keep the British Commonwealth together and which have done much to preserve peace in the world. The greatest of these principles is that one government - I am now talking about governments - does not interfere in matters which are within the domestic jurisdiction of another. That is a matter of profound importance.

Mr Haylen:

– What about Hungary?


– Some one has referred, as I expected, to Hungary. By common agreement in the free world, the events in Hungary related, not to a matter of domestic jurisdiction, but to a brutal invasion of one country and its rights by another country.

To ignore this principle of noninterference would be to make domestic policies matters of international jurisdiction. That, I venture to say, would do much to create hostilities in the international atmosphere far greater than those which now exist. This principle is recognized by the United Nations. Matters of domestic jurisdiction are, by express terms, excluded from the consideration of the United Nations, and for a very good reason, which we in Australia would do well to recall. These terrible incidents have occurred in South Africa. South Africa has racial problems of which, fortunately, we, within our own country, are free. But we do have our own native population and we do have, let me remind the House, our own responsibilities in relation to Papua and New Guinea. If we are too free in asserting that what happens in South Africa, is a matter for international jurisdiction, we may well step out of the light into the darkness on this matter. We may well find that, the door having been opened in that way, somebody will be willing to assert at some time or other, in some circumstances, that we, in relation either to our own internal population or to the population of our Territories, are also subject to international condemnation and international jurisdiction.

Mr Ward:

– And so we should be!


– I did not hear a word from the honorable member for East Sydney when men, women and children were shot down in their homes by the Mau Mau. This is a serious matter. I am not professing to sit in judgment on it; all I am offering is a warning that, in a matter of this kind, we should not allow our natural emotions to carry us away from firm ground. My advice, and the advice of the Government of this country, is that, whilst nobody need restrain his individual indignation or feelings, we, as the Government, should be careful not to abandon firm international ground in order to secure the advantage of some temporary feeling on this matter. We have our future to consider. We have also the relations between Commonwealth countries to consider. I want this matter to be considered calmly, with all the advantage of knowing in this instance and others - there have been many other instances - what the facts are, what the policies are and where the responsibility lies.


– I desire to ask the Prime Minister a question supplementary to the question which he has just answered at some length. Prefacing my question, I want to say that last week the honorable member for Lang raised the matter of South Africa and asked the Prime Minister whether he would ascertain from the Australian High Commissioner there the facts of the tragic situation in that country. 1 ask the Prime Minister now: Has he invited our diplomatic representatives in South Africa to acquaint him with all the facts of the situation? If he has, will he make a further statement on the matter, and in that statement will he indicate what attitude the Australian Government will adopt if, and when, this question goes before the United Nations?


– The report that I have had from the High Commissioner in South Africa does not go beyond the facts that are now of general repute. Naturally, the High Commissioner did not think fit to pursue an investigation himself when a judicial investigation had been promptly ordered by the Prime Minister of South Africa. My honorable friend asks me what our attitude is in the United Nations. Let me recall to him that there were great troubles in Cyprus, in which many, many lives were lost. On that occasion the attitude of the United Kingdom, supported by us, was that this was a domestic matter, and not a matter for the United Nations. Let me remind him, too, that there have been many attempts to have the West New Guinea issue, which the Netherlands has always claimed to be a matter of domestic jurisdiction, dealt with by the United Nations. We have supported the Netherlands’ position. I do not mind saying that we have adopted our attitude in both of these cases with a lively understanding ot the fact that what is good for Cyprus, and what is good for West New Guinea, can equally be good for East New Guinea and for Papua. In other words, we have maintained the integrity of the domestic jurisdiction clause in the United Nations charter, and we hope profoundly that it will continue to be supported.

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– My question is addressed to the Postmaster-General. Is it a fact that when the extended local service area system commences to operate on 1st May, telephone rentals in many telephone areas brought within the zones of major towns will rise substantially, some by more than 100 per cent.? If the answer is “ Yes “, and in view of the fact that domestic subscribers who cannot take advantage of lower calling fees on extended networks will find their telephone service uneconomic, will the Minister give urgent consideration to reducing rentals for domestic telephones in this category?

Postmaster-General · DAWSON, QUEENSLAND · CP

– The honorable member refers to the operation of the scheme known as “ Extended Local Service Area “, or “ Elsa “ for short. It is true, Mr. Speaker, as I outlined in my second-reading speech on the Post and Telegraph Rates Bill 1959, after the presentation of the Budget, that the introduction of this scheme will mean an increase of some of the rentals which are at present charged. I should point out, Mr. Speaker, since it is some considerable time since this matter was explained previously, and since there is still a good deal of misconception prevailing about the system, that the scheme provides for the formation of zones embracing a number of adjacent exchanges, these zones being based largely on community of interests. The calling rate between subscribers in one zone to subscribers in an adjacent zone will be the local call fee - and each call will be untimed - instead of the present trunk-line charges made for timed calls between such areas. Now, Sir, the department has always applied the principle that telephone rentals are determined by the number of subscribers connected to an exchange and therefore available to be called from within the area. The greater the spread of the service available to a subscriber the greater the rental he would have to pay for his telephone. It is obvious that in towns in rural areas or zones which are adjacent to large metropolitan exchanges there will, according to this principle, be an increase in rentals, because subscribers in those areas will have available to them a vastly increased service at the new calling rate. The percentage of increase will depend, of course, on the size of the adjacent metropolitan area, and will therefore vary. In some cases it could be above 100 per cent. It will be obvious that to those subscribers adjacent to the large areas a very great benefit will accrue because of the fact that instead of paying trunk calls sometimes over 15 miles to 20 miles they will have available the whole range of the subscriber service in large cities at the local untimed call fee. It is right, of course, that the degree of that advantage will depend on the use to which the subscriber puts his telephone. In some cases, if the telephone is used very seldom this will mean an increase in his charges which is not offset by the reduced trunk calls. In other cases there will be a great advantage. I am afraid it was not possible to differentiate between the two types of users and formulate some scheme whereby those who use their telephones not so frequently are charged a different rate from those who use them more often. There has always been a differentiation between the domestic rate and the business rate and I can see no possibility at the present time of altering that position.

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– My question is addressed to the Minister representing the Minister for Civil Aviation. I direct the Minister’s attention to a question I asked him last year with respect to the stability of Electra aircraft. In view of the fact that some of these aircraft have disintegrated in the air, I now ask him to inform me who, in the Government, accepts responsibility for forcing the Australian airlines to purchase these aircraft and who is now accepting the responsibility for this type of aircraft continuing to fly without being grounded for particular inspection? I further want to know what inspection, if any, is being carried out at the present time to ensure the safety of operation of these aircraft in Australia - a most important thing.

Minister for Defence · DENISON, TASMANIA · LP

– As honorable members know, when I am asked a question on civil aviation, which is handled by a Minister in another place, it is my custom to refer it to him; but, anticipating a question on Electra aircraft to-day, I made it my business to see the Minister and certain officers of the Department of Civil Aviation and get some information regarding Electras. I find that the aircraft are not grounded in the United States. They are not grounded in New Zealand either.

The aircraft themselves are subject to inspection at certain periods and these are laid down by the aircraft manufacturers. And the only thing that is being done in the United States is to insist that these inspections be carried out within 30 days if they have not been done in the preceding 30 days. For the information of the honorable member for Darling and the House, I mention that these inspections have always been carried out in Australia. Ever since the aircraft have been here these inspections have been carried out, and they are still being carried out; and I am sure the House will be pleased to know that up to date there has been no indication whatever of anything faulty in the Lockheed Electra aircraft.

As to the first part of the question which suggested that some pressure was brought to bear on airlines to buy this particular aircraft, that, of course, is just not true.

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– My question is addressed to the Minister for Trade, and relates to the Export Payments Insurance Corporation. I remind the Minister that

Parliament last November gave this corporation authority to cover losses in certain cases up to a maximum of 90 to 95 per cent, instead of the previous upper limit of 85 per cent. I ask the Minister: Has the corporation made use of this new upper limit and, if it has, what has been the response of exporters?

Minister for Trade · MURRAY, VICTORIA · CP

– The Government, in the light of the experience of the Export Payments and1 Insurance Corporation and of the trading community, did authorize the corporation - in certain particular cases and exercising its own judgment - to extend the cover beyond the previous ceiling limit of 85 per cent, to 90 per cent, or in some instances 55 per cent. This policy has operated since the 1st of January last. More business is being written by the corporation, but I do not think that the corporation itself would attempt to decide how much of the additional business is attributable to the new ceiling which has been established. However, I can say that the total amount covered at one time increased, during the last calendar year’s operation, from £16,000,000 to £26,000,000. I am glad to say that the trading community is resorting increasingly to this facility which has been provided by the Government.

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– I address my question to the Prime Minister. The right honorable gentleman told me last November that he had not then considered the Tariff Board’s suggestion of the preceding June that the Australian and New Zealand Governments should see that Australian shipyards received orders to construct ships for the New Zealand trade. I now ask him: Has he taken up the matter with the Prime Minister of New Zealand? If not, will he now do so in view of the fact that one of the passenger ships on the AustraliaNew Zealand run, the “ Monowai “, will be withdrawn from service in May. and that the other, the “ Wanganella “. being nearly 30 years of age, must soon be withdrawn from service?


– 1 recognize the significance of this matter. Nothing of substance has occurred yet, but I propose to discuss this matter directly with the Prime

Minister of New Zealand when we meet, as we will for some time, in a few weeks.

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Mr Malcolm Fraser:

– My question is directed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Can he tell the House whether the C.S.I.R.O. gave up its vigorous work of finding ways and means of controlling the blowfly after the discovery of aldrin, dieldrin and diazinon, which, for a while, gave adequate protection to .sheep against the blowfly? Can he say whether, since the blowfly has now bred relative immunity to these three insecticides, the organization has once more taken up research in this field? Have any new insecticides been found which will effectively deal with the blowfly? As no pest is more wasteful and more costly to control, and as a powerful and lasting preventative is. an urgent need in all sheep-growing areas, will the Minister suggest to the C.S.I.R.O. that it pursue vigorous research in this field?

Dr Donald Cameron:

– The honorable gentleman is not correct in assuming that the C.S.I.R.O. has given up research into this problem. In fact, research is still being carried on. It is true that considerable immunity has arisen, to aldrin and dieldrin, but there is no evidence that the blowfly has any immunity to diazinon. In addition, D.D.T. is still considered to have a useful function in certain circumstances. The organization also has pointed out to the pastoral industry that a great deal depends upon proper methods of sheep management - proper methods of crutching and so on. I can assure the honorable member that the matter is kept steadily under review.

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– My question to the Postmaster-General refers to the issue of licences to provide for the extension of television services in Australia and, in particular, to the allocation of channels for this purpose. Is it a fact that his deparment has issued a statement to the effect that there is now no option but to use channels in the ultra high frequency band, and that this arrangement will apply to all future television stations, except any additional stations located in the capital cities? If so, is it intended that the departmental statement to which I have referred should dominate the hearings in relation to frequency allocations which are to commence next month? Does this mean that the 15,000 families that own television setsin the Illawarra district will be unable to use those sets to receive programmes from their own local television station when it is established?


– I know of no official statement from the department, such as was mentioned by the honorable member, to the effect that it was intended to go into the ultra-high frequency band in television. The position is that some time ago, when considering the third stage of television, the Government instructed the Australian Broadcasting Control Board, as part of its task in investigating applications for new stations, to inquire into and report to the Government upon the availability of frequencies for this expansion. As part of its present investigation, the board is conducting that technical inquiry and will report to the Government. No decision along the lines suggested by the honorable member has been either considered or taken, nor will it be until the report is received.

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– Is the Minister for Health aware that the Commonwealth quarantine station at Sorrento, in Victoria, covers a considerable area of whatwas once worthless scrub and sand, but which has to-day become extremely valuable? Is it necessary to maintain this quarantine station at the same size as it was 60 years ago, seeing that many of the contagious diseases are not nearly so dangerous as they were then? Can the Minister tell me what is the approximate area of this station and how many people have been quarantined there during recent years?

Dr Donald Cameron:

– The area retained by the Department of Health is considerably less than it was 60 years ago. In fact, the larger part of that area has now passed to the use of the Army. I should think the actual area still retained for quarantine purposes is something like 160 or 200 acres and it is considered that this is the necessary minimum. I have not the actual figure of the number of people who have been quarantined there within the period mentioned by the honorable member but I will endeavour to obtain the information and let him have it.

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Mr Allan Fraser:

– I ask the Prime Minister: In view of his statement that the South African killings are a domestic matter, is it a fact that the United Nations has already decided to consider this matter, which would indicate that it is of international significance? Is it correct, as reported, that the matter has already been listed for consideration by the United Nations Security Council? Is it further a fact that South Africa has agreed to such consideration by the Security Council, but that this has been deferred, I think until to-morrow, because South Africa wishes to submit certain information to the council? If these things are correct, will the Prime Minister reconcile his comments with those facts?


– The suggestions made by the honorable member are all news to me.

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– I ask the Treasurer whether it is a fact that interest paid by manufacturing and commercial interests on debentures, bills, and so on, issued to raise money for use in their business activities is deductible for taxation purposes. Does the Treasurer agree that this method of raising money, in preference to the practice of issuing shares, provides the borrower with a means of avoiding taxation for which he would otherwise be liable? Is it a fact that there has been a remarkable growth of this practice in recent years? If so, will he state whether any action is proposed to prevent a continuance of this large-scale tax evasion?


– It is a fact that the practice of issuing unsecured notes rather than an issue of fresh share capital has grown considerably in recent years. I put out some facts quite recently which demonstrated that growth. No doubt there are certain advantages found by the companies concerned in adopting this practice, but possibly there are disadvantages according to the circumstances of the time.I imagine that each company would weigh up and balance the advantage against the disadvantage. The matter has been considered by the Government, but whether it calls for further action on the part of the Government is a question of policy upon which it would not be appropriate for me to comment at this stage.

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– I ask. the Minister representing the Minister for Civil Aviation a question supplementary to the question just asked by the honorable member for Darling. Is it not a fact that our standards of aircraft inspection are so strict and the capabilities of our pilots so great that no senior commercial pilot would be prepared to fly an Electra if there were the slightest doubt in his mind about its airworthiness?


– I think that what the honorable member has said is quite true. I believe that our standards of inspection and the quality of our aircrews are comparable with those anywhere else in the world. Australia took precautionary action in relation to the Electra. Some people may think that it was unnecessary, but we wanted to be on the safe side. Mr. Peter Langford, the Director of Airworthiness in the Department of Civil Aviation, was sent to America, and he is in constant contact with all the investigations that are going on there into the accidents to Electras.

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- Mr. Speaker, would a further question on South Africa be in order?


– It will be in order as long as you do not reflect on the conduct of the Government of South Africa.


– In that case, I ask the Prime Minister whether he would consider it a fair interpretation of his attitude to say that his delay in making a statement on this question and his contention that it is a domestic question for the South African Government suggests sympathy with the South African Government and its policy rather than anything else?


– That interpretation of my attitude, as I have expressed it to-day, is so utterly unfair that it could proceed only from the honorable member from Yarra.

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– I ask the Treasurer: ls it not a fact that the United Nations special fund has been praised as a farsighted and already effective scheme to assist the under-privileged countries of the world? Is he in a position to advise the House whether Australia has been invited to contribute to this fund? If there has been such an invitation, will he recommend to the Government that Australia make a significant gift, in the same spirit as that in which we have contributed to the Colombo Plan and to other United Nations agencies?


– The honorable gentleman, in the course of his question, has indicated the variety of directions in which Australia is active in providing assistance in the international field. I do not think that any one in this country should feel that Australia is lagging in giving assistance in one form or another beyond its own borders. Indeed, if we take into account what is being done in Papua and New Guinea, then, on the information which has reached me, Australia ranks about second amongst the countries of the world in per capita contributions to the assistance and encouragement of other peoples. There are various international agencies, some of them operating under the auspices of the United Nations, to which Australia is making a contribution at this time. Our contributions are often considerably greater than those made by others. With respect to the United Nations special fund for children, I believe that Australia ranks amongst the most significant contributing countries of the world.

So I suggest that, however worthy any particular fund or its objectives may be, the test of whether Australia is playing a proper part should not be what we are doing in relation to that fund, or, perhaps, what we are failing to do, but by the overall effort of the Australian people. Measured by that standard, I believe that we are carrying our weight in the international field in a way of which Australians can be well proud.

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– I direct a question to the Postmaster-General. Is it a fact that due to the popularity of television there has been a marked decrease in the number of listeners to parliamentary broadcasts, particularly at night? If this is a fact, will the Minister consider arranging for parliamentary proceedings to be televised, so that the public may study democracy in action, and at the same time appreciate, from the actions and speeches of the tired and complacent members of the Ministry, the urgent need for a change of government?


– I have had no report that television has resulted in a reduction of the number of listeners to the parliamentary broadcasts. In fact, I know that there have always been many more listeners to parliamentary broadcasts in country areas, in which television is not yet available, than in the cities. So I think that the basis of the honorable member’s question is quite incorrect. However, be this true or otherwise, let me say that there is no intention at present to televise the operations of this House, and I should think that if and when we decided to do so, the honorable member for Grayndler might need to change some of his own practices, just as he implies some other honorable members should change theirs,

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– My question is directed to the Minister for Trade. Can the Minister say whether the recent decision of the United Kingdom Government to reduce substantially subsidies on agricultural products will have any noticeable effect on our export prospects in that country?


– I would not be prepared to say that the consequences of the recent modifications of the United Kingdom policy would be measurable, but the step taken by the United Kingdom is very much in the interests of Australia as an exporter of primary products to that great market, and it is in accordance with representations that I, on behalf of the Government, have made to the United Kingdom over a period of years. I am not suggesting that the action has been taken by the United Kingdom Government because of Australian representations. I think it would be unfair to the United Kingdom Government to do so. However, we have constantly pointed out to the United Kingdom Government that we established and have preserved in this country access to our market for Britain’s manufactured goods, and that this ought to be balanced by reasonable access to the United Kingdom market for our goods. We have also pointed out that our access has been impaired because of the scope of some of the domestic subsidy policies that have been applied in the United Kingdom.

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– I address a question to the Minister representing the Minister for Civil Aviation. By way of preface, may I say that it has been disclosed that Mr. Ansett, of Ansett-A.N.A., has sent a circular letter to certain citizens in an attempt to besmirch the good name of Trans-Australia Airlines, and damage its goodwill, by describing it as an objectionable socialization medium. Will the Minister call for a report concerning this attempt by AnsettA.N.A. to undermine the business of the publicly owned T.A.A. organization by the circulation of a questionable letter?


1 ask the honorable member to place his question on the noticepaper, and I assure him that he will get a full and firm reply. While I am on my feet, let me say that I do not think any one person in Australia could do anything to besmirch the reputation of T.A.A.

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– Will the Postmaster-General consider a suggestion that telephone subscribers be permitted to pay their accounts by the 5s. stamp card system? This kind of instalment payment system, similar to that used for the payment of wireless licence-fees, would be of great assistance to many telephone subscribers, particularly pensioners and persons receiving low incomes.


– This is a matter to which some attention and consideration have been given, but, because of various difficulties and increased costs, it has been decided that the system proposed would not be practicable. However, as the honorable member has asked the question, I shall get more detailed information and give it to him.

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– As the Prime Minister is absent, I address my question to the Postmaster-General. It is common knowledge that, last evening, there was a broadcast over the Australian Broadcasting Commission stations on a matter which comes under the Prime Minister’s ministerial direction and which was the basis of the question asked by the honorable member for Eden-Monaro, but the Prime Minister was ignorant of the matter. Will the Postmaster-General take steps to see that, while the Prime Minister is also Minister for External Affairs,, all the information broadcast by the A.B.C. stations in relation to matters concerning that portfolio is supplied directly to the. Prime Minister, as he is unable to keep up with affairs by gleaning information from other sources?


– I have no knowledge of the matter referred to by the honorable member for Wills, but I shall examine it and see what information can be supplied to him.

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– I address a question to the Minister for the Army, ls it a fact that the whereabouts of nine Australians taken prisoner during the Korean war has not yet been determined? I ask the honorable gentleman whether, if this is a fact, he will inform me what steps have been, taken since the end of the Korean war to determine the whereabouts of these nine men.

Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– I shall certainly look into this matter at once and give the honorable member a full and detailed answer.

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– I direct my question to the Minister for Immigration. Is the Minister aware of a report recently made by a Mr. Segal, who represented the New South Wales Benevolent Society in an investigation into the circumstances of Japanese children who are alleged to be the children of Australian servicemen? Does the Minister concede the authenticity of

Mr. Segal’s report that conclusive information is available regarding 52 children whose names, and places of domicile are known? Is it intended to take any action, to alleviate the plight of these children by facilitating their immigration to this country and their adoption by Australian families? Alternatively, is the Government prepared to contribute to their education and: upkeep?

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– The House may recall that, at the end of last session, the honorable member for Bass, I think it was-

Mr Luchetti:

– The honorable member for Braddon.


– I beg the honorable member’s pardon. The honorable member for Braddon asked me a question about this subject. Subsequently, I gave him. a written reply, in addition to what I had said in the House, and I think that the honorable member had that published in the newspapers. The subsequent investigationsby the gentleman whom the honorable member for Hughes has named do not really add any further information to what was formerly in. the Government’s possession irc this respect. So far as I am aware, the identifiable illegitimate children supposedly of Australian- servicemen number 51. As I told the honorable member for Braddon both in the House and, subsequently, in writing, the Government can see no really good reason why a great exception to general immigration policy should be made in order to permit the admittance of these people to Australia.

Mr Haylen:

– That is against all overseas policy. Germany has admitted Norwegian children of Hitler’s troops.


– I do not think that that is altogether true. I- suggest that honorable members think very carefully about this subject before committing themselves one way or the other. If you are to concede the principle that a nation shall be responsible for its servicemen’s acts of that nature while they are on active service or in occupation of another country, you will not be able to stop at Japan. When you consider the history of thb country in the 60 years of this century, and the contributions

Honorable Members. - Oh!


– I speak as an exserviceman but as one who is not guilty of these practices! As I say, when you consider the contributions that Australia has made, both in war and in peace, you cannot stop at Japan. If you want to adopt this principle, you will have to apply it to many countries in the world. In that case, the honorable member for Hughes would have to think afresh a completely new basis for our immigration policy. This the Government is not prepared to do, and it is not prepared to make a specific exception in this case unless - I would only add this as a qualification - there are individual instances which require the most particular or the most sympathetic consideration.

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– I desire to ask the Minister representing the Minister for Civil Aviation a question. It concerns the Minister’s statement in the House this afternoon that no pressure was put on airlines to reequip with Electra aircraft. Is it not a fact that the board of Tasman Empire Airways Limited voted in favour of re-equipping with Comet aircraft? Why did this airline finish up with Electras? Is it not a fact, also, that Trans-Australia Airlines approached this Government for permission to buy Caravelle aircraft? Why has this airline finished up with Electras also if no pressure was put on it?

Mr Bryant:

– Put that on the noticepaper!


– This, also, is really a question for the notice-paper. I can only re-affirm what I said before - that pressure was not brought to bear. These things were decided by mutual agreement.

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Personal Explanation


– I wish to make a personal explanation, Mr. Speaker.


– Does the honorable member claim to have been misrepresented?


– Yes. In Newcastle, on Friday last, my attention was directed to a report in last Thursday’s issue of the Sydney “ Daily Telegraph “, under the head ing “ Officers refused to answer letters “. The report stated -

Mr. Griffiths (Lab., N.S.W.) said in the House of Representatives yesterday that officers in the Newcastle branch of the Department of Social Services had refused to answer correspondence.

I did not say at any time that officers in the Newcastle branch of the Department of Social Services had failed to answer correspondence. I said no such thing, and “ Hansard “ records what I did say. I asked the Minister for Social Services (Mr. Roberton) the following question: -

Will the Minister for Social Services inform me in what circumstances he considers that his departmental officers should answer correspondence received by them from pensioners or their representatives? Will the Minister concede that cases in which persons are asking for the discontinuance of the payment of pensions to deceased parents call for the sending of a reply to correspondence?

The Minister, in a letter to me, has indicated that he believes that this is so. I regret, Mr. Speaker, that the newspapers have distorted what I said, because, in the main, I have always received the utmost courtesy from the officers of the Department of Social Services in Newcastle. Mr. Haddock, the Registrar of Social Services there, is most co-operative in all his efforts to assist. The acting registrar-


– Order! The honorable member is not in order in debating the matter.


– I was just pointing out that the acting registrar, Mr. Broadbent, and all the officers concerned have done their utmost to help, from time to time. The trouble arises in the Sydney office of the department, which repeatedly fails to reply to correspondence, and the difficulty will continue so long as the Newcastle office has not the necessary autonomy to enable it to deal with cases as it should be able to deal with them.

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Minister for Defence · Denison · LP

– by leave - Honorable members will recall that, in a statement to this House on 26th November last, I announced the Government’s decisions on the new defence programme. These involved important and far-reaching changes in the organization and equipment policies of the services, to toe carried into effect over the three-year period of the programme ending in June, 1962. The objectives approved in November have been vigorously pursued in the past four months, and this afternoon I shall briefly survey for the information of the House the present stage of action or planning in respect of the major policy decisions announced in my previous statement.

Any statement on defence would be incomplete without reference to the strategic basis of policy. As stated last November, the new programme is designed to meet present strategic requirements. I think there will be little argument over the strategic assessments on which our defence policy is based. These accord with the best expert opinion available, both in Australia and overseas.

Briefly, we believe that because of the nuclear deterrent, the outbreak of limited or local wars is more likely than a global or full-scale war. In a country with limited resources such as Australia, which has heavy and continuing commitments for national development, the scale of the defence effort must be determined by priorities. Large sums of money must be found for the wide range of projects aimed at developing our natural resources and expanding our industrial capacity, such as the Snowy Mountains Scheme, the improvement of communications, and the search for oil. In addition, we must continue our immigration programme. All these measures will contribute to our long term defence strength and capability.

The money and man-power available for defence must be kept in proportion with these other demands on our resources. It is not physically practicable to prepare thoroughly for every possible contingency. We therefore give priority in our preparations to the more likely threat, and the primary aim of the defence programme is to improve the ability of our forces to act swiftly and effectively, in co-operation with allied forces, to meet limited war situations. In addition, of course, all the measures taken to improve our capability to meet limited wars also improve our preparedness for larger-scale war, even though this is not expected, and the forces we are building for participation in limited wars would form our initial contribution in the less likely event of global war.

Another fundamental feature of our national defence which is worth repeating again, because it so directly affects the composition and development of our forces, is that we base our policy on the principle of collective security. In any likely war in the foreseeable future, our interests will most likely be centred in South-East Asia, which is our first line of defence. As the Prime Minister has stated -

Security in the area must be a collective concept. . . . We cannot stand alone; therefore we stand in good company in Seato, in Anzus and in Anzam.

Through our active participation in these arrangements, and the positive role we play in them, in the development of joint plans and the exercising of our forces in conjunction with our allies, we are making a significant contribution not only to our own security; but to the security of other likeminded countries in the area.

I come now to the position in the three Services, and shall deal first with the Navy. The major decision announcedlast November was that the Fleet Air Arm should not. be re-equipped when the present aircraft reach the end of their operational life in 1963. I shall briefly recall to honorable members’ minds the reasons for this decision -

  1. The present front-line aircraft of the Fleet Air Arm will be worn out by mid-1963.
  2. The higher-performance, more sophisticated aircraft which would replace them could not operate from the present aircraft carrier, H.M.A.S. “ Melbourne “, but would require a more modern and faster carrier.
  3. A replacement carrier of a more modern type, suitable to our requirements and within our budget, is not available from any likely source.
  4. The construction of a new carrier could not be seriously entertained, because of considerations of cost and timing.
  5. In any event, naval aviation is now a complex and costly enterprise, and it is extremely doubtful whether it is possible for a small navy such as the Royal Australian Navy to keep pace with modern developments in this field, without unduly prejudicing other essential defence activities.

These are compelling reasons, and there can be no doubt that in Australia’s circumstances the decision was a sound one. 1 said in November that the Government was considering a number of new naval projects which might be commenced in this programme. These included the possible introduction of a submarine force, guided weapon destroyers, modern minesweepers, and other proposals. In view of the complexity and great cost of such units, the Government requires the fullest information before reaching decisions. The Chief of the Naval Staff, with an expert team, has just recently completed a searching investigation in the United Kingdom and the United States of America into all relevant aspects. This will form the basis of proposals for a new Navy programme which, when completed and submitted, will be considered by the Government. An announcement will be made when decisions are reached.

In the meantime, work is proceeding on the construction of four new type antisubmarine frigates in Australian shipyards, two of which will come into service in the present programme. During this period, the carrier and its aircraft will continue in full service in the operational fleet, which also comprises three Daring class ships, two Battle class destroyers, three fast antisubmarine frigates, training and survey ships and miscellaneous small craft. This is a modern and effective naval force, readily available and, with its emphasis on antisubmarine capability, is well suited to meet our present strategic requirements.

I now turn to the Army, and would like to re-state, quite briefly, the main considerations underlying our current policy. As I have said earlier, the type of hostilities assessed as most likely to-day are limited or local wars. These call for quick action by ourselves and our allies, both to prevent such hostilities spreading into a larger conflict, and so that an enemy might not be tempted to think that quick gains could be made because we lacked the means for an immediate response.

In the present strategic situation, therefore, the primary aim must be to provide forces which, by virtue of their training, their equipment, and the means of mobility which they possess, can be made rapidly available for operations. This applies in the first instance to the Regular Forces, which must provide the immediate contribution. But the Citizen Military Force also, to play an effective part in modern war, must be much more quickly available for operations and better equipped than in the past.

Honorable members will be aware that the national service training scheme was introduced at a time when the strategic situation was very different from that existing to-day. Global war then appeared far more likely than it does now. The scheme played an important part in our defence preparedness, and has provided a pool of some 200,000 men with basic training. It has outlived its military usefulness in present strategic circumstances, and, for the reasons which I explained fully in my statement last November, the development of a modern Army has required the discontinuance of national service training. The scheme made demands on the man-power, the money and the administrative effort of the Regular Army which prejudiced the building up of the regular combat units and the purchase of modern equipment. Further, the intermingling of national servicemen, who are not liable for overseas service, with volunteer Citizen Military Force members, prevented the ready availability of the C.M.F. as a fighting force in an emergency.

As I announced last November, our objective for the Regular Army is to increase the strength and effectiveness of the combat elements, while reducing the strength of the Command, training and administrative organization. This is to be done by -

  1. Increasing the strength of the field force;
  2. Re-organizing it to improve its tactical flexibility in operations;
  3. Raising a logistic support force;
  4. Improving mobility by providing light aircraft, both fixed and rotary wing, and amphibious watercraft.
  5. Providing additional types of modern equipment.

The effect of these moves will be greatly to increase the efficiency of the Army, and, particularly, to improve the ratio of combat to support troops. The strength of the operational forces in the Regular Army will be increased by 33 per cent., with a corresponding reduction in the administrative support forces. When it is recalled that these support forces, in addition to* administering the regular forces, perform the same function for the C.M.F. and Cadet Corps, this represents a very satisfactory development.

Insofar as the C.M.F. is concerned, the objective is to raise a C.M.F. of 30,000, all volunteers, with considerably improved availability and operational effectiveness. They will be provided with modern types of equipment for their training, which will be integrated as far as practicable with that of the regular units.

Those responsible for defence preparations are sometimes accused of planning to fight the last war. I think there will be little dissent from the view that our current Army planning and preparations have moved with the times, and that our policy is firmly and correctly based on the real needs of the strategic situation which confronts us to-day.

I would like at this stage to give honorable members a brief outline of the framework of the new Army. The operational units of the Army, both Australian Regular Army and Citizen Military Force, are to be organized on the new pentropic basis. This is designed to increase the efficiency of the Army in conditions of modern war, particularly tropical warfare, which calls for flexibility, mobility and the capacity to disperse and re-group rapidly. A pentropic division contains five strong battle groups. The core of each battle group is an enlarged infantry battalion, to which may be added supporting combat arms and services to enable it to operate independently. The battle group is, in effect, intermediate in strength between the former battalion and brigade groups.

The field force of the new Army will comprise two pentropic divisions. The first of these will be made up of two regular battle groups and three C.M.F. battle groups, while the second division will comprise five C.M.F. battle groups - that is, a total of eight C.M.F. and two regular battle groups in the two divisions. In addition, one regular battalion group will continue to be stationed in Malaya as part of the Commonwealth Strategic Reserve.

Mr Bryant:

– When you say “ group “, do you mean “ battalion “ ?


– Just be patient. You have a chance to inform your mind. Of the eight C.M.F. battle groups, two will be raised in Queensland, two in New South Wales, two in Victoria, one each in South Australia and Western Australia and, in addition, Tasmania will contribute a reduced battle group. Within each State the battalions will be affiliated with a State regiment. Her Majesty has graciously bestowed the Royal Title on each of these regiments - for example, Royal Queensland Regiment, Royal New South Wales Regiment, and similarly for the other States.

A strong and modern Army will be built within this framework, in which the present under-strength C.M.F. units will be regrouped in cohesive and effective battle formations to enable them to fulfil their role of providing follow-up forces to the regular units. This has involved a process of merging and concentration of existing C.M.F. units. Such re-grouping of formations is not new, but what is significant in the present reorganization is its scale, embracing, as it does, units throughout Australia. This has required a vast amount of investigation and detailed planning, from conferences of senior commanders right down to unit level. I wish to emphasize that there has been nothing arbitrary in this process. A careful and patient study has been made of every C.M.F. centre and its potential, taking into account the present volunteer strength, the number of young men of appropriate age in the district, and other relevant factors. This has frequently involved consultation with CM F. unit commanders and local authorities by C.M.F. area commanders. The senior C.M.F. representative in each command has been fully consulted in all cases.

The final decision to close or retain a depot has been given by the Minister for the Army only after carefully weighing all factors. The Government has naturally been reluctant to take any action to the possible detriment of its objective of builda strong and efficient C.M.F. by voluntary enlistment, but on the other hand the use of regular personnel and the expenditure of money, in keeping open uneconomic training depots, could not be allowed to prejudice other aspects of the reorganization. Of a present total of 292 C.M.F. training depots throughout Australia, 238 will still be retained, and 54 will be closed. 1 emphasize - and this is important - that no volunteers, either officers or other ranks, will be retired or retrenched from the C.M.F. as a result of these decisions. On the contrary, it is the Government’s firm policy to encourage all existing volunteers to continue their service in the nearest unit or sub-unit. Special conditions of attendance at parades and annual camps are being devised for this purpose, and will be announced by the Minister for the Army (Mr. Cramer). Likewise, Sir, no volunteer for C.M.F. service will be prevented from enlistment because some centres have been closed, and the Government will conduct a vigorous recruiting campaign to attract new volunteers. Present C.M.F. officers for whom regimental or staff appointments in formed units cannot be found immediately may continue on the active list and be eligible to serve on staff groups which are being expanded. These groups will provide training in both command and staff duties, and contribute greatly towards our basis for expansion in the event of war. It will be of interest to honorable members to know that the establishment of the Field Force - that is the two pentropic divisions - provides for 28 senior officer appointments of the rank of colonel and above. Of this 28, eight will be Regular Army officers and twenty will be provided by the C.M.F. This should indicate that opportunities will remain for advancement of C.M.F. officers to the higher ranks. 1 would also like to emphasize that the honours and traditions of the units and formations of the Australian Army will not be lost as a result of the reorganization. My colleague, the Minister for the Army, has in hand arrangements for maintaining, as far as possible, territorial and other affiliations and unit identity within the framework of each State regiment. The C.M.F. commanders are being fully consulted on this question. The present strength of the volunteer C.M.F. is 21,000 against the target of 30,000 to be achieved by the end of the programme. I think my statements will leave no doubt as to the importance which the Government attaches to building and maintaining a strong and efficient volunteer Citizen Military Force. With this objective in mind the Government has made two new and, I think, very important policy decisions: -

First, it has approved of increases in pay to the Citizen Military Forces which will bring them into line with the increased rates of pay and allowances recently granted to the regular forces. Details will be announced, at an early date.

Secondly, the Government has decided that Commonwealth public servants who serve in the Citizen Military Forces will be given leave with full pay for the period of annual continuous training and also for the period of one school class or course of instruction each year. At present,. Commonwealth public servants serving in the Citizen Military Forces are granted leave and receive the difference between their service pay and their civil pay. The Government hopes that its practical encouragement of enlistment in the Citizen Military Forces will be widely followed by other employers.

Future training of C.M.F. units in realistic battle methods on an integrated basis with the regular forces, and with new weapons, will provide far greater interest than ever before. An example of this integrated training recently came to my own notice in Tasmania, when a party of C.M.F. field engineers was flown to the Army engineering school at Liverpool, New South Wales, for a special course. This is merely one illustration of the extensive programme of integrated Regular Army/C.M.F. training which is being carried out in all Commands. There will be increasing emphasis on such activities, which will do much to stimulate the interest and improve the military knowledge of C.M.F. personnel. My colleague, the Minister for the Army, will give further details. We are confident that the measures being taken to modernize and strengthen the Army, and to make Citizen Military Force service up to date and attractive, will result in the achievement of our target figures.

Steady progress is being achieved in the objectives approved for the Army, but the reorganization must be phased and timings related to the cessation of the national service training scheme on 30th June, 1960 Reductions in head-quarters, training and administrative units, and re-allotment of personnel to operational units, are already taking place and will be accelerated after 30th June. I have already announced the effects of the streamlining of the reorganization on the higher rank structure of the A.R.A. At the top level, this has involved the reduction of the G.O.C., Southern Command, from a lieutenantgeneral to a major-general’s appointment; Western and Central Commands will be brigadiers instead of major-general’s; Tasmania Command will have a colonel instead of a brigadier.

The magnitude of the task of Army reorganization should be understood. It involves a major problem of manmanagement and, I emphasize, human relations affecting a great number of soldiers. The re-equipment of the Army, on which some £30,000,000 has been planned for the three years of the new programme, is one of the major objectives of the reorganization. This is proceeding satisfactorily, as I shall show:

The Regular field force has been equipped ahead of schedule, with the Australianmade FN rifle, and general issues to the C.M.F. will commence in July of this year.

Equipment of the Regular Artillery Component with 105 mm. howitzers is expected to be completed by July of this year.

A complete new range of field wireless sets, for both A.R.A. and C.M.F. use, has been received.

Two landing ships medium, purchased from the United States, have already arrived in Australia from Japan, and two more are expected shortly. A landing craft mechanized has been ordered from the United States for comparative trials with two similar craft now under construction in Australian shipyards.

Orders have been placed for a new United States genera! purpose machine gun and a new United States recoilless rifle.

Quantities of other modern weapons, ammunition, armoured vehicles and equipment are being received or are on order.

I stated in November that as many as possible of the Regular Army personnel affected by reductions in head-quarters training and administrative units would be absorbed in other postings. It must be recognized however that there will be a number of Regular personnel, who for reasons of rank, age or qualifications, cannot be suitably placed. The number is expected to be of the order of 1,600-1,700. No serving member will be retrenched if a worthwhile job can be found for him in the Army. This aspect of the reorganization is the subject of the most detailed and sympathetic examination, and a committee under the chairmanship of Sir John Allison is reviewing the question of the retirement benefits to apply to personnel retrenched as a result of the reorganization. In addition the facilities of the Services Resettlement Scheme will be available in locating suitable employment opportunities for such personnel in civilian life.

The Air Force programme is proceeding smoothly and according to plan. Satisfactory progress is being achieved in all the main decisions announced in November.

The order for the purchase of twelve P2V7 Neptune maritime reconnaissance aircraft, to re-arm the present Lincoln squadron, has been placed. An initial provisioning team to purchase the aircraft and its ancillary equipment is at present in the United States. The re-equipped squadron will be located at Townsville, the North Queensland base. We already have a very useful arrangement under which Neptunes of the Royal Australian Air Force undertake a regular exchange of training exercises with Neptunes of the United States Navy based on Honolulu.

A strong technical team from the Bristol and associated companies visited Australia last month to confer on details of the purchase of a Bristol Bloodhound Mark I. surface-to-air guided weapons unit. The technical details of the equipment have now been determined, and an initial provisioning team has left for the United Kingdom. Very satisfactory arrangements have been made for the training of R.A.A.F. personnel and their participation in practice firings of this weapon, both in the United Kingdom and at Woomera.

As regards the purchase of helicopters for joint Army-Air Force use, an evaluation of types is proceeding, which should be completed about the middle of this year, when an order will be placed.

Three Citizen Air Force squadrons - those at Sydney, Brisbane and Adelaide - assumed their new ground role at the beginning of this month. The remaining two - at Melbourne and Perth - will be reorganized within the next couple of months.

With the Permanent Air Force element released by the changed role of the Citizen Air Force Squadrons, it has been possible to establish the fourth permanent fighter squadron. This was formed at Williamtown early in January. As stated previously, this extra squadron will facilitate rotational replacement of the personnel in the two fighter squadrons stationed at Malaya.

The re-arming with the Sidewinder airtoair missile of the two Sabre squadrons in Malaya has been completed.

The present strength of the R.A.A.F. is 15,721, against a target figure for 30th June of 15,750.

The House is aware that it has been decided to re-equip the R.A.A.F. with a new fighter aircraft, and that provision has been made in the latter part of the programme period for commencement of the acquisition of the new aircraft. We are interested in a number of possible types, some of which have not yet reached a sufficient stage of initial proving or development to enable us to make a final selection. The Air Board has kept in close touch, through our overseas staffs, with the companies concerned, and are completely abreast of all technical data available at this stage on characteristics and performance. As I have stated on previous occasions, we are not prepared to gamble on such a costly project, which will affect the relative effectiveness of the R.A.A.F. for many years to come. But a choice will be made as soon as the Government is in a position to do so, with confidence that it has all the necessary information on possible types and their suitability for our operational requirements.

It will be apparent from all I have said that a major objective of the Government’s defence policy is to provide our forces with the most modern conventional weapons and equipment available. This has been a continuing process throughout this Government’s period of office, and I shall mention a few facts briefly to show the considerable build-up in the material resources of the services during the last ten years. The highest expenditure on capital equipment has been for the Air Force; 540 aircraft have been delivered, 400 of them from Australian production. As I have already indicated, an effective force has been provided for the Navy, comprising a carrier and its aircraft, Daring class ships, destroyers, anti-submarine frigates and other craft. Australian shipyards have contributed substantially to the provision of this fleet. A wide range of equipment has been provided for the Army during this period, including tanks, literally hundreds of armoured and other vehicles, communications and engineering equipment, weapons and ammunition.

Modern defence is a very costly business. In addition to the large sums required for new arms, equipment and works, an inescapable expenditure of considerable proportions is necessary for the pay of the forces, their food and clothing, accommodation, and procurement of maintenance equipment and stores, oil and fuel, and so on. Since 1950-51, some £560,000,000, or 36 per cent., of the total defence expenditure, has been spent on equipment and its maintenance; buildings and works and their maintenance have absorbed £176,000,000, or 11 per cent.; and £839,000,000, or 53 per cent., has been required for pay and allowances of personnel and general services. All these costs are the price of national security and adequate defence preparedness. Within the lifetime of this Government, defence contributions have been required on a number of occasions on which our preparedness has been tested, and we have been able successfully to meet our commitments. To illustrate, I mention Korea, where we were among the first to answer the call of the United Nations. Also, our contribution to the Commonwealth Strategic Reserve in Malaya, in which our forces play a notable part in the anti-terrorist operations, at the request of the Federation Government, and in adding to the security of the area. In conclusion, honorable members will be aware that £192,800,000 has been provided for the defence vote this financial year. The aim of the defence changes which have been announced is to make the best use of our defence resources.

The level of defence necessary to provide for our national security, and to meet our international obligations, must be achieved as efficiently and economically as possible. This requires two things, first, that we keep very clearly in mind the target of providing fighting forces which could deal with situations which might currently threaten us, and secondly, that we eliminate unessential elements which do not contribute directly to this aim.

It would be a mistake to retain a form of organization adapted to a need which has now changed. This has applied particularly to the Army, and the object of the changes which are being introduced is to ensure that the Army as a whole, both A.R.A. and C.M.F., is organized, equipped and trained to discharge its role efficiently. Everything that is being done is designed to this end.

I lay on the table the following paper: -

Defence Review - Ministerial Statement, 29th March, 1960- and move -

That the paper be printed.

Debate (on motion by Mr. Whitlam) adjourned.

page 654


Motion (by Mr. Opperman, through Mr. Hulme) agreed to -

That leave be given to bring in a bill for an act relating to the prevention of the pollution of the sea by oil.

Bill presented by Mr. Hulme, and read a first time.

page 654


Second Reading

Debate resumed from 17th March (vide page 333), on motion by Mr. Hasluck -

That the bill be now read a second time.

Leader of the Opposition · Melbourne

– The Opposition does not oppose the passage of this measure. We have carefully considered the speech by the Minister for Territories (Mr. Hasluck) in which he has justified its introduction. He has said that the bill is designed to serve two purposes. The first, and most important, is to promote local loan raisings which will add to the amount of money available for public expenditure in the Territory. The second purpose of the bill is to educate the natives in economic activity. The Minister has argued that the Government wishes to encourage the natives in thrift, lt wishes to encourage them to understand how public undertakings are financed, so that instead of putting their surplus money into a bottle and burying it under a house, or hiding it in some other way, they will invest in public loans, in the knowledge that those public loans will be used to their advantage, and that the money will earn interest.

The proposed loan is for a sum of only £100,000. In our view, that is a modest beginning, but it is better to start at a low figure than at a high one. I think that the Minister said that he expected to raise £500,000.

Mr Hasluck:

– That is my estimate of the loan capacity.


– I am glad to hear that. Of course, once the people of New Guinea have been taught how important it is in their own interests to assist in financing undertakings in their own country - the erection of schools, the provision of water supplies, electricity and so on - they should be encouraged to invest all their hidden wealth, whatever it may be, in various Government loans. If they do so, it will be profitable for them. I am not, of course, arguing in favour of high interest rates on any Government loan. The Chifley Government got on very well during the war period with interest rates of 3 per cent, and 3i per cent. It is a pity that we cannot get the bank rate of interest down to something like that now. In other days in this country, 2 per cent, loans were floated. In the days of the bank crashes, and before, 3 per cent, interminable loans were issued in certain States. However, I presume that the natives will be paid thecurrent rate of interest on the moneys which they invest.

These indigenous people are in a position to invest money because, as the Minister has said, the cash value of the crops which they produced in the last financial year was of the order of £3,000,000. As he has very rightly pointed out, that £3,000,000, or the greater part of it, is circulating in the Territory, in the hands of the natives.

That is the value of the crops which were grown by the native peoples themselves, either individually or through their cooperatives. It is a good thing that the Minister interrupted himself, as it were, in response to an interjection, to say that the native co-operatives have a turnover of around £1,000,000 a year.

When the co-operatives were started, just immediately after the war, their turnover, I think, was about £36,000 a year. This has fluctuated over the years as a result of the variations in the price of copra. At one time the turnover was £750,000, if I remember rightly, after it had been £1,000,000 the year before. But it is certain that with the natives engaging more and more in the production of copra, coffee, cocoa and other primary products, their incomes will rise substantially.

The old practice of the natives of burying money because they were afraid of one another or because they had no confidence in the European, as he is called or the Australian as he generally is, is passing. The natives are being taught to be clerks in local government and they are also being increasingly employed in the public service of Papua-New Guinea. Only a few years ago the Commonwealth Bank led the way in the employment of native clerks. I think all banks are doing the same now. The stage is being reached in that Territory where native girls will be employed as typists. That, too, is a very good thing.

The bill is a good one insofar as it has the dual purpose of encouraging the native to put his money into loans authorized by the Legislative Council of Papua-New Guinea and because it also encourages him to take an interest in the affairs of his country. This helps him to progress along the way towards self-government. This goal may be a long way off or it may be reached sooner, perhaps, than some of us imagine. The aptitudes of these people, particularly those who are more sophisticated, are very great. Not all the natives are being employed at 5s. a week or £5 a month or whatever the figure may be. Quite a number of native tradesmen in Port Moresby and Rabaul submit tenders and take contracts. They are master builders or master plumbers or something like that and they employ native labour. That labour is rewarded at something near the standard of the European or Australian rates of pay. It is not uncommon to find natives working for £12 or £14 a week. This means that they have money which they are putting into savings banks.

That is good in its way, but they will certainly have more pride in their country if they feel they possess some securities which are issued under the authority of their Legislative Council. I think that the Minister said that the savings bank deposits have risen from £3,000,000 to £5,000,000.

Mr Hasluck:

– From £2,000,000 to £5,000,000.


– From £2,000,000 to £5,000,000 in the course of a few years. The natives obviously have faith in the savings bank.

Mr Hasluck:

– A proportion of those deposits would belong to Europeans.


– I am thankful for that interjection. Some of that money would be the invested funds of the public servants, traders, and growers of European origin in New Guinea. We have a vast country to our north which is our responsibility. Its people are our charges and our care. They are under our tutelage. Although the territory is not half the size of New South Wales it is twice the size of Victoria. Its area is approximately 184,000 square miles and its population of 1,750,000 is greater than the population of Queensland which is our third most populous State. Obviously there is a big problem confronting this Government and the Legislative Council of Papua-New Guinea in the work they have ahead of them both in the proximate future and in the distant future.

If I may digress just slightly, I hope that the position of the Legislative Council will be given some consideration by the Commonwealth Government in the light of what the Dutch Government is doing for its territory in western New Guinea. If the natives are to be encouraged to invest their savings in government loans in Papua-New Guinea and take more part in the government of that Territory, I think it is important that there should be more native members of the Legislative Council.

I think the Government has done very well in the matter of education, but we must not be complacent. Perhaps this loan will ultimately be used to supplement what the Commonwealth Parliament votes annually for Papua-New Guinea and what the Legislative Council raises by revenue. The revenue raised in Papua-New Guinea is not inconsiderable. In 1958-59 it was £5,000,000 and the approved Commonwealth grant for the same year was £12,000,000. We seem to be proceeding on a basis that something over £2 shall be provided by the Commonwealth for every £1 raised locally. I do not know how much longer that can continue, but I know that the Commonwealth is being committed to an additional £1,000,000 each year on that basis.

This might be quoted at some time in the United Nations when reports are being made upon the discharge of our responsibilities to that body. I am sure that we are doing much better for the natives of PapuaNew Guinea than some of the countries which dare to criticize us are doing in respect of their own people in the way of education, health, social services and the rest.

The Legislative Council of Papua-New Guinea, as the Minister narrated the course of events, approved this bill. Then the proposal secured the approval of the Australian Loan Council. I do not know that that was entirely necessary. I have had a look at the statute and the provision in the constitution, but whether it was necessary or not, it was a good thing to secure endorsement by the Loan Council of this loan raising. It shows that that important body in our national life is interested - very interested - in what is transpiring in Papua-New Guinea.

Once the Loan Council gave its approval - whether it was necessary or not to do so - this Parliament was asked to pass this measure which guarantees the due payment of all moneys, including interest payable by the Administration under Territory authority. We say that the bill is a good bill. Of course, if the whole question of PapuaNew Guinea were opened up, we would offer some constructive criticisms of some aspects of affairs in that country. Our criticism, generally, would be that, excellent and all as our record has been up to date, it has to be made even better, because time is not with us. As other people are watching what we are doing in Papua-New

Guinea we want to be able to show that the progress of the native is both rapid and substantial and that more people in that country are beginning to realize that we are there not to misuse or exploit them, but to help them. Some of our own people there do not always behave properly in these respects, but most of those who are in New Guinea spend their time and their lives in a spirit of dedication to the cause of native advancement. They have a very real interest in promoting the well-being of these people - almost 2,000,000 of them - who live close to us, but who are not related to us ethnically, linguistically, historically, or culturally. These people are coming to realize more and more their dependence on us, as we realize that our future, perhaps, depends on them.

The day will come, ultimately, when the people of Papua and New Guinea - and, I hope, the people of Dutch New Guinea - will, joined in one group, decide whether to be an independent republic, a part of this Commonwealth of Australia, or a part of the British Commonwealth of Nations. Whatever their decision, it will be made as a result of the exercise of their right of self-determination. I trust that whoever happens to be controlling the destinies of Australia at that time will respect them in the exercise of their right of selfdetermination.

Some of my colleagues wish to make some observations on the measure, but not for the purpose of delaying its passage unnecessarily. They feel that this is an opportunity for saying things about Papua and New Guinea, a Territory in which we have a common interest on both sides of the House. We believe that we should all help to solve the problems of Papua and New Guinea aright, because failure to do so could be disastrous, not for us perhaps, but for the Australian children of to-morrow.


.- Mr. Deputy Speaker, I wish to congratulate the Minister for Territories (Mr. Hasluck) for introducing this measure. I support it completely. I am bound to offer congratulations also to the Leader of the Opposition (Mr. Calwell) for the attitude his party has adopted in supporting the measure and in not attempting to delay it in any way. I agree with the honorable member who interjects to say that that is a pleasant change. It is most pleasant. I wonder whether this is the new look about which honorable members opposite have been talking.

The policy of the Government has been made perfectly clear. The Government wishes to ensure that ultimately there will be independence for the Territories and that, when that time arrives, the indigenous peoples will be able to make their own choice. The Government wishes to ensure also that, having made their choice, their decision will be accepted and respected. The immediate project is to increase the standard of living in the Territory, particularly of the indigenous population. The Government has spent a great deal of time, and a great deal of administrative effort and money, on the development of the Territory. It has spent large sums of money for that purpose in the period during which it has had the responsibility for administration of the Territory.

I think it is important to look, not only at the money that has been spent, but also at other aspects of the programme followed by the Government in the Territory. I refer particularly to the constitutional development that has been going on - the establishment of a legislative council for the Territory and, in the lower echelons of government, the establishment of local councils. I refer also to taxation. A measure providing for the levying of income tax in the Territory was introduced recently. It was regarded as controversial at the time, but I believe it has been accepted now. I feel that that, too, is a part of the process of development and education in the Territory, designed to lead the people of the Territory along the path to selfdetermination.

What is happening in the Territory has parallels elsewhere in the world. It is not strange, in the present age, to see underdeveloped countries being brought along the path to development, and to a real sense of the need for self-determination. The extent to which that realization is manifesting itself at present in the Territory is, of course, slight. I feel that the Territory is not yet at the stage when the indigenous population is giving any serious thought to the subject. Therefore, I think it reflects great credit on this Government that, even though that feeling does not currently exist strongly in the Territory, it is being kept in mind. The policy of the Administration is to bring the indigenous people to a state of preparedness, so that when the time for selfdetermination is reached they will be, to a great extent, ready for it. I believe that our effort is to be applauded. I agree with the Leader of the Opposition that those who, on occasion, criticize us should look to their own administration of territories. They will find that their record is not nearly so good as ours. I feel that our record is second to none.

The purpose of this legislation is that the Commonwealth shall guarantee any loans raised under the authority of an ordinance of the Territory. It is a very remote possibility that the Territory Administration would default in redeeming a loan, but even if it did so, the investors would not lose, because this legislation will provide that the Commonwealth is deemed to guarantee the payment of all moneys, including interest, payable by the Administration in accordance with the terms and conditions under which the money is borrowed.

The Administration’s loans will be secured by the Commonwealth. Normally, Commonwealth bonds have an endorsement to the effect that the sums are secured on the consolidated funds of the Commonwealth, but in order to find the legal authority for securing them on the consolidated funds of the Commonwealth it is necessary to search through legislation and through the orders-in-council that arise out of the legislation. This bill has the great merit that it is very simply expressed. If you want to find the relevant authority in the future, you will merely have to turn to the Papua and New Guinea Act and look at the amended section 75a.

I understand that semi-governmental borrowings are covered by the Loan Council as a result of an agreement between the Commonwealth and the States. The Minister said, in his second-reading speech, that these proposed loans in the Territory are similar to semi-governmental loans and the Loan Council has ‘approved of the particular loan. I believe that the Parliament can assume from that that the Commonwealth has regarded the Territory as standing in a very similar way to semigovernmental authorities in Australia and has agreed that the Loan Council should have authority over the raising of loans in the Territory. Not all of the semigovernmental loans raised on the mainland are guaranteed either by the Commonwealth or by State governments. In order to find out whether, in fact, a loan is so guaranteed, it is necessary to make an examination of the circumstances. However, under the terms of this legislation it follows absolutely that all loans which will be raised on the authority of an ordinance of the Territory will be so guaranteed by the Commonwealth Government.

Mr Bury:

– Even if they are not approved by the Loan Council?


– There is no authority, as I understand, requiring these loans to be authorized by the Loan Council. I assume that the Commonwealth Government has elected to bring the Territory loans within the ambit of the Loan Council. This bill states -

Where any moneys are borrowed by the Administration by way of a public loan, the Commonwealth is deemed, by force of this Section, to guarantee the due payment-

I would think that loans raised in the Territory by authority of an ordinance of the Territory would in every case be guaranteed by the Commonwealth Consolidated Revenue, which is not, of course, the case with semi-governmental borrowings on the mainland.

This point having been made, the question may arise whether it is proper to have legislation achieving complete and absolute coverage of all Territory loans when loans raised by semi-governmental authorities on the mainland may, or may not be, so covered. I think, that after consideration of the matter the conclusion is inevitably reached that it is proper in this case, because the Territory administration is in a very different position from semi-governmental bodies on the mainland. Almost all the Territory revenues are provided by the Commonwealth. The Leader of the Opposition gave us figures indicating that the amount of Commonwealth grant was about £12,000,000, while about £5,000,000 was raised within the Territory. However, those raisings within the Territory are in the nature of excise and other such duties, and if these amounts were not raised in this way they would have to be provided from the Consolidated Revenue Fund. The

Territory, therefore, is in a very different position from the mainland areas, because its revenues are provided by the Commonwealth.

Then there is another aspect to which attention should be directed. This £100,000 loan - the Minister indicated in his secondreading speech that the amount contemplated is £100,000 - is a general purpose loan for the use of the Territory, as may be prescribed by the ordinance or some regulation or other means. If the semigovernmental instrumentalities on the mainland, which are specific undertakings, such as the State Electricity Commission in Victoria and the Southern Electricity Commission in Queensland, do not have a governmental guarantee, the investor is in a position to look at the instrumentality as an entity and make up his own mind whether it is sound even when there is no governmental backing. It would be interesting to ascertain whether this loan will be underwritten. This matter was raised by the honorable member for Mitchell (Mr. Wheeler) during the course of the Minister’s second-reading speech. My understanding is that public loans by semi-governmental authorities are invariably underwritten. If a loan cannot be underwritten, the semi-governmental authority endeavours to negotiate for a loan rather than float a public loan. But the prospectus for this loan is not yet available, and whether it will be underwritten will probably become apparent when the prospectus is available.

As this loan has been approved by the Australian Loan Council, one can assume that the Loan Council has fixed the terms, and I take it from what the Minister said that the terms will comply with the normal terms relating to semi-governmental raisings on the mainland.

This piece of legislation is, perhaps, not dissimilar to the financial agreement which was embodied in an act of 1927. My recollection is that the relevant part of that agreement was clause 4, sub-clause (2), whereby the Commonwealth guaranteed borrowings by the States when they borrowed in their own names from overseas sources. The extent to which this provision is used nowadays is, of course, doubtful. However, if any precedent was needed, the precedent exists in that provision.

There is another matter which arises, and to which the Minister may give some little attention. Although it is only a minor matter, it may be of importance to some people. I presume that the ordinance which will authorize the borrowing of this loan will also provide that the pieces of metal, in their plastic covers, will become trustee bonds, in the sense that that term is used on the mainland. On the mainland a bond which is authorized by State legislation to be a proper investment for a trustee is termed a trustee bond. The question arises whether or not these bonds, even though the ordinance makes them trustee bonds in the Territory, will be trustee bonds on the mainland. Some State legislation may be required to bring them into the field of trustee bonds. I understand that Queenslard, South Australia, Western Australia and Tasmania authorize trustee investment when the interest on the security is guaranteed by the Commonwealth. Tn this case, according to the terms of the bill, the interest will be guaranteed by the Commonwealth, and so these bonds could fall within such a category. But my understanding is that the legislation in New South Wales and Victoria refers to Commonwealth loans as a proper investment for trustees, and this, of course, is not a Commonwealth loan in the strict sense. It is a Territory of Papua and New Guinea loan, even though it is guaranteed by the Commonwealth.

Besides looking at the bill as a piece of legislation, it is necessary of course, to look behind the purpose of the bill and to look at the purpose of the loan. As the Minister so simply pointed out, there are three principal reasons for raising this loan. The first is to add to the money available for spending on capital works. The second is to provide money for educational purposes, and the third is the need to establish and/ or develop institutions within the Territory. I think that any one of those three reasons is of such importance as to justify the raising of the loan. When the three of them fall into such happy combination, it is, of course, a very pleasant circumstance for those responsible for the legislation, and that is, no doubt, the reason why the Opposition supports the bill.

The Minister said that this was the first attempt at loan-raising in the Territory.

As we all know from its history, the Territory has been wholly dependent on Commonwealth funds. Experience in the Territory shows, I think, that the pace of development makes more funds necessary. Indeed, the Leader of the Opposition pointed out that self-government may not be so far away, and the rate of development can sometimes be deceptive. This is true, I think, of the Territory; it is certainly true in other places. I can refer to the master plan of the Melbourne and Metropolitan Board of Works for town planning in Melbourne. Only a few years ago the board looked forward to 1980, and said that by that year the population could be expected to reach a certain level. It now seems quite apparent that this level of population will be reached by 1965, and that the level expected to be attained by the turn of the century will now be reached in about 1980. Even this latter estimation may later be found too conservative. The Territory may have a similar experience, and development which may now be expected to take a certain number of years may be concertinaed into a much shorter period. What we do at this stage, therefore, is very important.

The appropriate way to spend the loan money is, I believe, in projects that may earn revenue. The Minister referred particularly to electricity in the Territory. Inquiries I have made indicate that the Territory has a substantial hydro-electric potential, and indeed the demand for electric power is growing very rapidly. The growth of demand in Port Moresby is at a greater rate than anywhere in Australia. The growth of demand is not confined, of course, to Port Moresby, but is apparent throughout the Territory. Electric power is needed for the purposes of education, hospitals, and - most important, of course - communication. The provision of power for these purposes promotes a greatly improved standard of living. As the living standard improves, development will be accelerated, and the demand for power increased accordingly.

Most of this demand for power is found in the larger towns of the Territory, and apparently there is a great demand in the domestic field. Air-conditioning is being provided, to an increasing extent, in houses in the towns of the Territory. The assessed growth of this demand for power is difficult to reconcile with guesses, but on this occasion, of course, the Territory Administration has not guessed any more than it is always necessary to guess at some future demand. We may call it a very informed guess. There has been a curve of demand in Port Moresby for increased power, and that curve, I should think, has been exponentially projected and the known development has been added to it in order to estimate what will be the likely demand in the future.

Until three or four years ago, power for Port Moresby and the major towns was provided by diesel plants. Recently, the Rouna scheme, about ten miles behind Port Moresby, was instituted. This is a hydro-electric scheme, and the first stage has been completed at a cost of some £1,000,000. No doubt, further stages will be required. I understand that the Government has recently approved the construction of a dam which is designed to make the flow of river water firm, with two objects - to make the hydro power from the first stage of the Rouna scheme more reliable and less likely to fade out in dry periods, and also, of course, to feed future stages of development.

A curious thing emerges from this, Mr. Deputy Speaker. It is in sharp contrast to what we find on the Australian continent. In Australia, we have the giant Snowy Mountains Hydro-Electric Scheme, the power stations of which are peak-load stations. The power from the Snowy Mountains Scheme is thrown in at periods of peak demand in Victoria and New South Wales when the demand for power is so great that the base-load units cannot carry the load. So, in Australia, we have thermal plants which provide the base supply and which, in peak periods, are assisted by power from the hydro-electric scheme. In Australia, hydro-electric power is very scarce and is much more expensive than is thermal power, whereas the converse is true in the Territory of Papua and New Guinea, where hydro power is readily available and where, as a matter of economics, its use for meeting the base load is favoured. In the Territory, power provided by diesel stations is prohibitive in cost compared with hydro-electric power, because diesel fuel is so costly and it is so simple to use water from the fast-flowing rivers for the generation of hydro-electric power.

One of the curious things that emerges from this is that loans raised in the manner proposed in this bill may be used for the development of hydro power, whereas, in Australia, the Snowy Mountains Scheme, 1 understand, is exclusively financed out of revenue. What is the consequence of this apparent conflict, I do not know. I think that the answer, quite simply, is that the mainland presents a set of problems which are vastly different from the problems which confront the Administration of the Territory, where almost all the expenditure that has taken place over the years has been of a developmental kind. In this, I include expenditure on roads and communications generally, which could not, of course, repay the capital invested in them. Ports in the Territory have been developed out of revenue moneys. I think that the ports there are substantially adequate for existing needs, but port development may be another field for the expenditure of loan money in the future.

In Australia, Mr. Deputy Speaker, a great amount of loan money is raised by local government bodies such as shire councils, city councils, town councils and boroughs. As a general rule, these bodies raise all their loan funds by negotiations of a private kind. Of course, apart from raising very substantial sums of money in the aggregate over the financial year, they also spend more than they actually borrow, because they have their own revenue, and, when added up, the revenues of all local authorities are very great. The functions of these local government bodies embrace, among other things, roads, health facilities and infant welfare. Many of these bodies to-day are faced with sub-divisional problems. But, in any event, Australia’s local government bodies are doing a tremendous job of work, which contributes very greatly to the smooth functioning of the machinery of government in this country. I think that these bodies are to be greatly complimented on their work. But I think that, apart from complimenting them, we should look to the job that they do and realize that, in the Territory of Papua and New Guinea, we have to build up the body of local government, and that we can inculcate the spirit of it in the Territory by letting local authorities there participate in the spending of loan money, even though, as the Minister for Territories said, in his second-reading speech, they may not be able to participate in the raising of money, because there are not the opportunities in the Territory for the raising of loan funds by negotiation.

I think that the Territory of Papua and New Guinea has a population of something like 2,000,000 natives. A great number of them are in primary schools and, after some education, they will be looking to the local councils, which are growing in importance and are receiving a great measure of approbation from the community generally. I think that the Territory would be improved if the local councils had some share at least in the spending of the loan money which will be raised. I think that this would promote a very valuable educative process. I understand that there has already been some borrowing by local councils, and I refer particularly to the Gazelle Peninsula, in the Rabaul area, where, by ordinance, the Territory Administration guaranteed bank loans exceeding a total of £50,000 for the establishment of cocoa farms by natives. There has been no default. The money has been repaid either at the specified rate or even more rapidly. I emphasize that these enterprises were wholly conducted by natives.

So the situation at present, Mr. Deputy Speaker, is that the natives are participating in both public and private sectors of the economy, as has been indicated by the Minister, and that the natives invest at present only in the private sector. This bill is designed to facilitate public loan borrowings in the Territory and it will encourage the indigenous people to invest in the public sector as well as working in it. Perhaps, as a result, the silver coins which are now vanishing from circulation in the highlands will come back into circulation. The Minister referred to the educative effect of this measure. I wholeheartedly agree with him that it will be of great value to the Territory generally.

At this stage, I should like to pay tribute to the Administration and also to the generosity of the Australian people in accepting the responsibility which the administration of a Territory such as this necessarily implies. As a corollary of the public acceptance of this responsibility, there should be, as there is now to be, encouragement for the indigenous people of the Territory to use for themselves, in order to improve their standard of living, the capital which is now lying idle.

Finally, Mr. Deputy Speaker, I want to state my belief that it is most necessary for the Administration of the Territory to inculcate as thoroughly as possible a love for and devotion to the institutions which are part and parcel of our life in Australia and, indeed, of the life of people everywhere in the British Commonwealth of Nations. We have instituted a Legislative Council for the Territory and a system of local councils. All the paraphernalia of local government needs to be developed and a belief in it needs to be inculcated. We need to develop courts and the professions. I do not leave out the great public institutions of banking and insurance, and I think that the raising of loan money falls into the same concept as do these great public institutions.


.- The Australian Labour Party is pledged to build a prosperous Territory of Papua and New Guinea. Consequently, as the Leader of the Opposition (Mr. Calwell) has intimated, we are pleased to support the bm. Any proposal that will add to the wellbeing and the happiness of the indigenous people should receive the support not only of this House but also of the whole of the Australian community. I am sure that the measure we are now considering will have the support of most people. As our Leader intimated, the Opposition has taken a continuing interest in this important area. We believe that a tremendous job must be done if the Territory is to become self-governing in this period when it is necessary for it to do so for the security of both the Territory and Australia. The bill is designed to take to the Territory a degree of the financial orthodoxy that is practised in Australia. It provides -

Where any moneys are borrowed by the Administration by way of a public loan, the Commonwealth is deemed, by force of this section, to guarantee the due payment of all moneys (including interest) payable by the Administration under the terms and conditions In accordance with which the moneys are borrowed and the provisions relating to public loans contained in the laws of the Territory in force at the time of the borrowing.

Our consideration of the bill would have been helped if the Minister for Territories (Mr. Hasluck) had presented with the bill a White Paper indicating the extent to which loans will be raised for the development of the area, not in a broad way for general matters such as electricity development, which is the purpose of the £100,000 loan, but specifically for the well-being of the indigenous people. I have in mind the need for money for housing, for rural co-operative societies, for village councils and for the clearing of large tracts of country so that good land may be brought into productivity. In this way, the £16,000,000 referred to by the Minister as the value of exports from the Territory would be considerably supplemented by increased production in the Territory. These matters are referred to only in a general way in the bill.

In discussing private and public Joans, J believe that one must stress on this occasion, as I have tried to stress on other occasions, the amazing contradiction that arises with finance required by local governing bodies for developmental purposes. Apparently, in the Territory of Papua and New Guinea approval of loans for semi-governmental works must first be given by the Administration and then by the Australian Loan Council. In Australia, the loan programme of the State must cover this aspect, and then the Australian Loan Council is obliged to endorse the proposal. What annoys me is that public loans required for the development of this country and, in the future, for the development of Papua and New Guinea will be restricted in this way, but private enterprise will be able to seek money freely for its purposes, good, bad or indifferent, from the available financial resources such as the savings of the people. The activities of those dedicated to the development of the Territory should not be so restricted.

T should like to know to what extent the loans envisaged in the bill will be circumscribed. They should, of course, provide adequately for all matters that need attention. I remind the Minister that some months have now passed since the Opposition suggested that a committee of members from both sides of the House be appointed to consider fully all matters affecting the people of the Territory so that their problems would be more fully understood and we would have greater information. The offer was made by the Leader of the Opposition about September of last year, but the Minister has not yet replied to it. I think that sufficient time has now elapsed and that a statement should be made either accepting or rejecting the Opposition’s proposal. I know that some honorable members opposite have accepted the proposition that this is a fundamental question. It involves the security and wellbeing of the people of Australia as much as it involves the security and well-being of the people of the Territory of Papua and New Guinea. The war graves in the Territory are a reminder of the terrible cross that Australia has borne to preserve the security of the Territory and of Australia. Our interests are indissolubly linked and we must help the indigenous people to reach die state where they will be able to govern themselves and perhaps to understand the complexities of the financial system, if it is possible for any one ever to understand them. Our efforts to achieve this objective would be aided if there were a broader understanding of the issues in the Parliament, and the generous offer of the Leader of the Opposition to help in establishing a committee for this purpose should be accepted by the Government.

I have referred to the use that should be made of the money raised by loans in the Territory. The outstanding need is housing. On reaching the first port of call in the Territory, Port Moresby, one has only to visit the native settlement of Hanuabada to see natives living in virtual squalor and in conditions that do no credit to this Government or to the people of Australia. This presents a challenge to us. The indigenous people on the fringes of the Territory have been in contact with the white man for 200 years or more, and something should be done for the sophisticated natives who are playing a part in the development of the area. One sees them as medical orderlies, radio technicians, tradesmen of various kinds and clerks, and the time has long since passed when we should permit these natives to be huddled up in these tenements. A broad, imaginative housing programme should be adopted to disperse the natives and to locate their cottages amidst the so-called Europeans, the Australians in the Territory, so that they may share as full partners and as brothers in the development of this grand area. I think we owe enough to them to assist them in that way.

I should like, Mr. Deputy Speaker, some indication that money might be found for co-operative building schemes which could help in this direction. There is no such indication at present, and I think that all these matters ought to be covered in a manner which will leave nobody in any doubt.

Now I turn to rural development. I noticed, in the highlands area at Goroka, great development in the production of coffee by the natives. That is to the credit of the natives and of the Administration also. I do not seek to reduce in any way the importance of what the Minister has tried to do in building up a vigorous and virile economy in the area, in which the natives themselves play a most important part. I know what is being done there in a co-operative way, but I also realize how much more could be done if we were certain that a scheme like this could be extended to cover the needs of the natives generally.

The Minister spoke of educating the natives, and helping them to understand how public undertakings are financed. He said -

Instead of putting their surplus money in a bottle and burying it underneath a house, we hope that they will be induced to make an investment in public loans . . .

Although I think it is laudable that the natives, “for their own advancement, should be encouraged to invest their spare money, T am also obliged to say that there are many people in the Territory who also ought to be making substantial loans for the development of the area. I saw in the press only yesterday a report that Bulolo Gold Dredging Limited made a net profit of 355,000 dollars from its operations in New Guinea in the nine months ended 29th February. Three hundred and fifty-five thousand dollars, Mr. Deputy Speaker! Surely that company should not require to be educated into investing money in the Territory. “ Surely it ought to appreciate the fact that the money of Australian taxpayers and the blood of Australian servicemen have made it possible for us to hold that land. It ought to be willing, therefore, to invest its money in major projects designed to develop the area and uplift its people.

Mr Hasluck:

– It has re-invested a substantial amount - £1, 000,000 or more, not in public loans, but in its own development.


– Are you quite happy with the amounts they have re-invested?

Mr Hasluck:

– They have put half a million pounds or more into CommonwealthNew Guinea Timbers.


– All right, they have put some money into Commonwealth-New Guinea Timbers Limited. But let me point out that Bulolo Gold Dredging Limited received dividends from CommonwealthNew Guinea Timbers Limited amounting to 354,000 dollars net, after tax. So I think that that re-investment of money has proved a most profitable one for the shareholders. If that company is re-investing money in the Territory it is doing no more than it ought to be doing, and it is all very well-

Mr Anderson:

– Are you not ashamed to talk like that?


– It is all very well to say that the natives ought to be investing their few spare shillings from the pittance that they receive, while honorable members like the honorable member for Hume (Mr. Anderson) feel that it is a shameful thing for me to advocate that Bulolo Gold Dredging Limited, with its massive profits, should be investing in the Territory.

Mr Anderson:

– That is not so.


– That was the statement I made to the House, and if the honorable gentleman disagrees with it I can understand his doing so. The fact that he disagrees with it is obviously the reason for his interjection. Had the honorable gentleman approved of what I said he would have remained silent, but he disapproves of it, so he interjected. I say that the Commonwealth Government has every reason to hold that companies making large profits in the Territory ought to be making a contribution to the loans required for the development of the Territory.

I turn now to another matter mentioned by the Minister in his speech. Invariably the Minister assists honorable members by providing a wealth of detail concerning the matters dealt with in his speeches. His statements are often most helpful. On this occasion he said that savings bank deposits in the Territory had risen to £5,000,000.

I should like to know to what extent this money is being used for the development of the Territory, Surely that is a most important matter, and some action ought to he taken so that a portion, at least, if not a substantial portion, of that money will find its way back into investment. Surely, as you have said yourself, Mr. Minister, investment in the Government’s loans is a patriotic action. It is something that people ought to be proud to do. The people who control Placer Development Limited, Bulolo Gold Dredging Limited, CommonwealthNew Guinea Timbers Limited, and other companies operating in the Territory ought to feel it their patriotic duty to invest in various loans raised to develop the Territory, and should be happy to do so.

I think that these matters require no stressing by me. I would be the last person in the world to make any suggestion that would weaken Australia’s case regarding the development which has occurred in the Territory of Papua and New Guinea. However, I think that there are people in the Territory to-day who require assistance. There is, for instance, a very great need to help people to become housed. If the proposals now being made can take us towards that end they will be welcomed, as the Leader of the Opposition has said, by this side of the House. But there must be no diminution in the amount of money made available by the Commonwealth Government for the development of the Territory. Rather, increasing sums of money should be made available for this purpose. I think it would be rather short-sighted on our part were we to continue helping Asian countries under the Colombo Plan - and some would also have us helping African countries - while we were neglecting our own Territories by not providing them with the money necessary for their advance towards their destiny and to enable their people to live their lives in the way that they believe best. I think that is the broad objective of most honorable members. I know that it is not the attitude of some of them, because it is on record that one member of the Australian Country Party said that we would take the land from the natives by force if necessary.

Mr Turnbull:

– - What member of the Australian Country Party said that?


– The Minister for Social Services (Mr. Roberton). I have the record of his statement, and it will be produced. Immediately after I made a tour of Papua and New Guinea, accompanied by the honorable member for Deakin (Mr. Davis), I refuted that statement. To-day, there is a need for a broad understanding in the community generally of the problems of the Territory. I think that that understanding is now shared on both sides of this House, but there are still ultra-conservatives in this place who do not believe in those things, and who want to keep the area a subject area. Naturally, they will be opposed by the mass of the people in this country. For my part, this bill generally is a good one. It can do no harm, and must do a tremendous lot of good. I only hope that the proposals with which the bill deals will be extended, and again I ask the Minister to have regard to the generous offer made by the Leader of the Opposition, and see to it that there is reasonable consideration of his proposal for a bi-partisan committee, appointed by the Government, so that there can be available full information about the Territory and, consequently, a better understanding of their problems. In this way, when Australia is called upon to give an account of her stewardship, she can speak with a united voice on the matter.


.- I ‘wish to deal with the question of Papua and New Guinea. [Quorum formed.] I should like to thank honorable members, Mr. Deputy Speaker, for coming into the chamber to hear me. Sir, the policy with respect to Papua and New Guinea should be bipartisan, although I agree that there must be differences between us about whether we are going too fast or too slow. There must be differences on detail, but the main aim should be understood by Parliament and should be pushed ahead by Parliament; otherwise, a change of policy or a change of government must inevitably lead to confusion and must be misunderstood among the nations of the world.

The Leader of the Opposition (Mr. Calwell), in his speech to-day, set the right note. He stated quite clearly, on behalf of himself and on behalf of his party, that the Government is doing a good job. He said he hoped it would quicken the progress of this work and do even better. But he agreed with the policy we are trying to pursue. There is a common interest on both sides of the House and the interest shown by members of Parliament must be reflected throughout Australia. The debate on the Territory of Papua and New Guinea should always be welcomed by all honorable members because the greater the interest and the greater the knowledge we have of these Territories, the more-effective our administration will be and the greater the support the Government can expect from Parliament. It is only through honorable members having an awareness of the problems that we can progress in this way.

It can be rightly asked how we - the Government, the Parliament and the Administration - are discharging these responsibilities. With your permission, Mr. Deputy Speaker, I should like to quote briefly a critical examination, based on first-hand knowledge, by Mr. Rasgotra, who is the Indian representative on the Council on Conditions in the Trust Territory in New Guinea, which is under Australian administration. This examination has had very little circulation and it should be read by all members of this House because it is made by an unbiased man who has considered this problem in a most critical fashion. Mr. Rasgotra said: -

May I begin by saying how well the Delegation of India realizes the uniqueness of the task and the responsibility of the Government of Australia in the Trust Territory of New Guinea. This task is no less than that of bringing into being a new society - a society with its own values, its own internal cohesion and its own inherent strength to withstand the pulls and pressures of modern life - and to infuse in that new society the capacity and the vision to gain, uphold and exercise independence. We realize, if I may borrow the words of the Hon. Paul Hasluck, Australian Minister of State for Territories, that “ a deep-seated social change, in the sense of a change which leads to the construction of a new society, is fundamental to the attainment of every other objective of the Trusteeship System “.

This task that faces the Administering Authority is onerous as it is noble; and we have confidence in the capacity of the Administering Authority to discharge it. The Visiting Mission discerned in the Territory some doubts on the part of certain sections of its inhabitants concerning the capacity of the Administering Authority to fulfil the mission entrusted to it. I am glad to say that we have no such misgivings. The following passage from a speech of Mr. Hasluck’s upon which I have drawn earlier is a tribute to the Administering Authority’s consciousness of the magnitude of its responsibility and its good faith in fulfilling its obligations under the international Trusteeship

System. Speaking before the Australian Institute of Political Science, Mr. Hasluck said:

We are under an obligation to promote the welfare of the indigenous people of the Territory. We have accepted a trust towards the people of the Territory and intend to discharge it. We recognize that for a period we will have to make most of the decisions on what will best promote their welfare, but we have also accepted as a fact of the situation that one day the people of the Territory will wish to decide for themselves their own future, and we have accepted the idea that it is their human right to do so.

The task before the Administering Authority is essentially one of development; and it is akin to what the Government and people of Australia have accomplished in recent years in their own land. For the Administering Authority, therefore, the magnitude and complexity of the problem of New Guinea are not an unknown or an unfamiliar challenge. May I add that we have faith in the destiny of New Guinea, and we look forward to fruitful co-operation between the Administering Authority and the people of New Guinea in the making of that destiny.

That is a document which I think is worth placing on record, because it comes from a man who has examined this situation very critically and who is not reporting to the Australian Government and to the Australian people. He is reporting to the Trusteeship Council on the manner in which Australia has discharged her duties.

Let me turn to the bill before the House. It is, as we know, purely an amendment to the Papua and New Guinea Act, and its subject-matter has been covered very fully by the Minister for Territories (Mr. Hasluck) and other speakers. Admittedly, there have been investment opportunities in Papua and New Guinea for local people, but they are mainly in primary industry - cocoa, coffee, copra and so on. So far, the local people have not had opportunity to invest in public development within the Territory itself by way of a loan, and this bill will enable such an opportunity to be given to them. They will be given opportunity to invest in a public loan, guaranteed by the Commonwealth, and the money will be spent in the Territory on further progress and development.

This loan has a particular significance for the native people. Firstly, it should help to teach them to know the meaning of thrift, and thrift is so easily forgotten in the world to-day, when so many things and so many attractive articles are so easily obtained on attractive terms and easy payments. So perhaps one of our biggest tasks towards the native people is to teach them the meaning of thrift, to teach them that money does not grow on trees, and this is what literally happens in many cases, because the native can pick his crop from the trees. He receives a high price for it and he must be carried away with the idea, at times, that money does grow on trees. This loan should encourage them to invest their savings. It will further demonstrate to them that money can grow by careful investment. It will help them to gain confidence in the Administration, because they will be able to identify their money with projects developing in their own country.

Another important aspect which was mentioned by the Minister in his secondreading speech, and which has been touched on by other honorable members, is that the native primary producer need no longer put his money in a jam tin or bury it. He can put it in a loan which is guaranteed by the Government. We know that in the year 1958-59 over 25 per cent, of the major export crops in the Territory were produced by native peoples, and it is probable that there is anything up to £3,000,000 now in their hands as a result of their own efforts. This amount, or a great deal of it, is lying idle. This loan seeks to channel it to a useful purpose. The loan will do nothing but good.

I refer now to the native local government councils which have been set up throughout Papua and New Guinea. These councils engage in finance raising, because they are empowered to raise their own revenue for first-aid posts, schools, water supplies and general village improvements. These councils are important agencies in the political education and development of the native people. The growth of the councils has been steady, and they have been built on sound foundations. The United Nations Trusteeship Council’s report deals with the local government councils at some length. Summing the matter up in a few words, the Trusteeship Council stated -

The growth of local government councils since the visit of the 1956 Mission has been spectacular.

The report then goes on to deal at some length with this growth and its advantages.

I have attended quite a number of these council meetings. Some of the councils were in the early stages of their formation and others had been established for a number of years. Of my own knowledge I can say quite definitely that the natives appreciate the activities of councils. The natives are quick to learn. They have shown a capacity and a willingness to apply the principles of local government in their own areas. Because the local government councils have the power to raise revenue, they play an important part in the political advancement of the indigenous people. But they have another important role in that they enable the members to get together with the members of the Legislative Council and exchange ideas, thus keeping each other informed.

I wish to refer now to another aspect of loan raising. Honorable members may not be aware that loans are available for natives who wish to develop land or provide housing. The Native Loans Fund has prepared the natives for the idea of subscribing to loans, so the use and handling of money is no novelty to them. They are taking advantage of the loans which have been made available by the Administration to purchase machinery for furthering their own projects and for the development of their fishing and other commercial interests. The Native Loans Fund is administered by the Natives’ Loans Board and, as a new development, the board will now receive applications for loans from native people who have been allotted a block of land under the Natives’ Land Ordinance, under which they can mortgage a security to the board. In addition, while a native is settling on his land and before his cash crop commences to bear, he can receive an income and certain sustenance payments from the board. He also is able to purchase agricultural tools with money which the board provides.

It will be seen that the Government is striving continually, by loan raising, by making money available to the natives, and through the native local government councils, to educate the native and to give him a knowledge of what he can do with money - how he can raise it and how he can put it to good and practical use for the development of his own land. This bill marks an important step in leading the natives towards development and progress by encouraging them to lend their money to the Government. The other steps which the

Government has already taken are, first, the native loans to which I have referred, which are made available to the natives who wish to develop their enterprises, and secondly, the authority which has been given to the local government councils to raise finance for their own purposes.

Mr Duthie:

– Is there any limit to those loans?

Mr Hasluck:

– Some of the native local government councils have borrowed as much as £90,000.


– As the Minister has said, the local councils have already borrowed quite substantial sums. The natives, therefore, are being taught in a most practical manner how to raise and to spend money to meet the needs of their own people.

I think that the honorable member for Macquarie (Mr. Luchetti) will agree with me that any one who has visited the Territories has come away with the feeling that their advancement has been quite spectacular. This has not been an accident. It has not just happened. The Territories have not been allowed to drift. The amount of money which has been channelled into them by this Parliament - and, therefore, by the people of Australia - has been substantial, and it is increasing every year. There is no question of the flow of money being cut off now because the people have lost interest and are prepared to allow the Territories to languish. The Government, the Minister and the department which the Minister administers deserve a tribute for their successful discharge of a national task. Their work has earned the acclaim of such a critical authority as the United Nations Trusteeship Council, which has seen the Territory for itself and has reported to the United Nations in the highest terms. I support the bill.


.- The Leader of the Opposition (Mr. Calwell) has already signified the Opposition’s support of the proposal to raise a loan among the native people of New Guinea, to be used for the development of the Territory. Looking back over the progress which has been made over many years, it is interesting to learn that in the days when the honorable member for East Sydney (Mr. Ward) was the Minister for Territories and during the war in the north-east sector, the natives depended entirely on their trading of cowrie shells. When the supply of cowrie shells gave out, the natives gave up being of assistance to the Army and the war had to be temporarily suspended in that sector while we sent divers to recover cowrie shell for currency purposes. That was in the far north-west only about fifteen years ago. The way in which, slowly, the whole of New Guinea and Papua have been brought under the civilized restraint, let us call it, or development, has been terrific. As members from this side of the House have pointed out, it has peaked up to a stage where now the people have to assume not the white man’s burden but the black man’s burden. They have to find a use for their money other than putting it in the old bullamoocow tin and sinking it in the kunai grass.

That is a well accepted practice among the peasantry all over the world. If a native mistrusts the government, as he has every right to do, or the Administration, as possibly he may have some desire to do, the best thing for him to do is to put his money in the bullamoocow tin and hide it in the kunai grass and trust that the waves and the sea and circumstances will preserve it for when he wants ready money. With the development of his country, as in this, the native knows there are two kinds of money, real money and visionary money. The native calls it house money gammon and house money true. House money gammon is paper money and deeds and what-have-you issued by the institutions of government in New Guinea; house money true is the good solid stuff that the native puts in the side of his lap-lap. Out of this knowledge has grown an awareness of what has to be done in the future. The natives know there are certain things they must do and the Government now comes forward with the suggestion that they should become investors in their own loans for their own development.

You have to give history a kick along; you have to give the whole of the story of New Guinea a new slant to envisage what is being done at that moment. Imagine some village where formerly a young buck wanted to marry Mary. He pointed out that he had so many pigs, which were, and still are, valuable currency, a lugger and a banana plantation. But all these things melt into nothing when he now says, “I have £200 in Commonwealth electricity bonds.” That brings civilization right up to date instantly. But it also brings problems and anxieties because after all the money in the bullamoocow tin down in the kunai is always there unless, of course, your enemy creeps up and steals it in the night.

But what happens to your electricity bonds at 3i per cent, if the government of the day in far off Canberra raises the interest rate? You are left with it and everybody else is getting 5 per cent. ! You might have the lulu wai marching on the Minister or his officers in New Guinea wanting to know why the house money gammon has come in in place of house money true. Nevertheless, as civilization progresses there is hope of doing something with regard to the future of the natives. In his speech, the Minister for Territories (Mr. Hasluck) said that the increase in savings had been dramatic. Savings bank deposits in the Territory had increased from approximately £2,000,000 to approximately £5,000,000. He said that this was without parallel, on a percentage basis, of course, to any other part of the Australian community. That is true. The Minister pointed out that it is the factor which probably has occasioned the Administration to do something about the surplus spending in the Territory. He went on -

In addition, the indigenous people are participating in the increased economic activity in the Territory. Over 25 per cent, of several of the major export crops are being produced by them.

Naturally they are earning money. Translated into practical terms this means that in the course of the year over £3,000,000 in cash found its way directly and immediately into the hands of the native agriculturists. So there is indeed a reservoir of money which could be exploited in various ways. It should be the function of the Government to see that the natives are protected by getting them to become little capitalists in the white man’s economy, or to buy electricity bonds or bonds for various developments such as water reticulation, road making or some other branch of the community. That is one thing.

It occurs to me, since we, on this side of the House, hope that the eventual destination of the natives to the north of us is a white republic in which they will be sovereigns of all they survey, and will be the masters of their own destiny without let or hindrance of the interfering hand of the white man, that we might not have rushed in so hurriedly to give them a capitalistic infusion and use this money in the development of their co-operatives. Cooperatives in the Territory have had a most damaging and terrible history because of the exploitation of them in various ways. First of all - the Minister knows this and although he need not say that he does, it is true - when the natives began their few fumbling attempts at a co-operative they were laughed at by the administrators of those days, they were jeered at by the planters and they were left for dead by the shipping companies. These last named waited until the little co-operative was able to build itself a jetty and load it with copra and wait for the lugger to come. But of course, the lugger did not come - Burns Philp saw to that! The lugger was turned the other way. It is true, of course.

Mr Hasluck:

– What is your authority for saying that?


– The authority of many christian missionaries and my reading on the matter. The Minister ought to have caught up to that long since because it is true. The Reverend Alf Clint, a missionary at present in this country will vindicate what I have said. On one occasion belonging to a co-operative, he saw that the copra was loaded on the wharf and the people waited day after day but Burns Philp diverted the lugger and the copra rotted on the wharf. Now that is true, and we want to issue a warning to the Government about these things. The Government comes along with the idea that it will be lovely to get money for the natives.

Mr Hasluck:

– Since Mr. Clint left the Territory co-operatives have nourished. There is no cause and effect; but that is so.


– Docs the Minister mean to say that the co-operatives do not exist any more? That is a most damning indictment.

Mr Anderson:

– He did not say that.


– The old Boer over there would not understand. He thinks that everybody who is not the same colour as he is should be eternally damned. If this Government has crushed the co-operatives - and I do not know that it has - it is a shocking thing to have done. Anyway, if there are no co-operatives left, as the Minister has just declared, the only place for the natives’ savings is where the chief, the Luluai at the table - the Minister himself - says they must go. I understand that the co-operatives in New Guinea were all thriving, but now the Minister tells us that they are not. He has been there since I have.

Mr Hasluck:

– You are misinterpreting what I said. I said that since Mr. Clint left the Territory the co-operatives have flourished. There were scarcely any when he left. There are now co-operative societies besides the missions.


Mr. Clint left the Territory and established another cooperative in the Gulf of Carpentaria which is flourishing. That is a completely unworthy statement regarding the pioneer of the co-operatives. But it makes my question valid once more. If the co-operatives are flourishing after the tyranny which was exercised in their first concept has been removed, they appear to be a much more useful place in which to invest the £2,000,000 of the natives. Have not administrations under the control of the Minister and his predecessor in New Guinea been trying for years to grow money crops and to get the natives of Papua and New Guinea to be self-supporting? Have we not been making researches all over the world to see that the native villages “will flourish and not decay, that the native himself does not have to come down to the seashore and work for the big boss and that the native economy will not disintegrate? For that reason, has not money been spent on research for the development of livestock and applying techniques in health? This has been done to keep the native village integrated so that the population will stay there growing things and selling things; so that the natives may be kept in a condition of reasonable health, without yaws, tropical ulcers and sickness of various kinds. These diseases have been conquered by our own services. We have taught the natives the energies and techniques of agriculture. Is not the next logical step to give them co-operatives and have them stay there, proud of their work and spending millions of pounds which they have earned, collectively? Is not that money best spent in their own cooperatives rather than in some nebulous electricity company’s loans or something that some one in Canberra has dreamed up? Is not that so? We believe that should be done.

When the Minister is speaking in reply he may answer these questions. In principle we are not opposed to this measure at all. I am sorry to have misunderstood the Minister’s interjection. I thought he said that co-operatives no longer existed but now he assures me to the contrary. Having heard the Minister’s admission, I think there is nothing more for me to say but to recapitulate. If the money which the natives have earned is still in the Territory and is associated with their work and if more money is needed to develop the native co-operatives that is where all this money should be invested.

At some stage the Opposition ought to move an amendment to this proposal to see that the money goes into the native co-operatives rather than into government loans, local municipal council loans, electricity or road clearance loans or some such enterprise. That would be a very poor way of using it.

What would be the effect on morale if the money went into native co-operatives? Would not the native, emerging from the darkness, of stone-age man, realize instinctively that there was a benefit for him in his own village when the money that he earned became a sort of roller that went on developing more money and built up his village, his gardens and his community?

Mr Hasluck:

– That is true.


– Of course it is true. They would prefer that to some nebulous, faraway scheme. They have a mistrust of paper money. They have a mistrust of “ house money gammon “, as it is called. It would be better to do something more directly for them under a system of cooperatives.

The rest of the bill is nebulous and, in the opinion of the Labour Party, without any serious content. I noticed that many questions were levelled at the Minister during his speech and that he answered them merely by saying, “ Let me finish my speech”. I now ask him: Will he do something in regard to loans for cooperatives? Will he make a general statement on the question of loans for co-operatives? Will he give a report on the strength and development of co-operatives in the trust Territories? There cannot be any stronger way of developing an agricultural economy than by turning its own money back into it to make it self-supporting and progressive. If the Minister is not interested in the co-operative as a means of developing an agricultural economy and if he is determined that the Territory shall use the standard type of borrowing, with the approval of the Loan Council, will he see that there is no debacle in that respect such as there was when 3i per cent, bonds were foisted on the natives of Australia, followed by an issue bearing a higher interest rate?

When you ask the native, our blackbrother, to become integrated into the economies of civilization, you load him with a lot of things that he does not fully understand. As a progressive step, you have to say to the native, “ You have earned a great deal of money which is in danger if it is left lying about in holes in the ground. We think you should set it to work to improve the health of yourself and your family, for the education of your children, and for the betterment of your gardens and crops. Invest it in an allNew Guinea co-operative economy. We will support you by the creation of bonds “. This would absorb the money and develop the country. Those trust authorities who watch with a jealous eye what we are doing in New Guinea could not but be pleased if such an arrangement were undertaken for the natives.


.- The one thing that stands out in any debate on the Territories is, I think, the magnificent work done by the Minister for Territories (Mr. Hasluck) during his occupation of his office. I think that both sides of the House will agree that the country owes a great deal to the energy, initiative and administrative ability of the Minister. It must be very disheartening to him to hear speeches such as that which has just been made. If the honorable member for Parkes (Mr. Haylen) had only read further into the second-reading speech of the Minister, from which he quoted, he would have found that the Minister said -

Native co-operatives have, of course, expanded very considerably and now have an annual turnover of more than £1,000,000 a year. Some of the co-operatives are producers’ co-operatives, some are consumers’ co-operatives and some are a mixture of both. The growth has been quite remarkable.

That statement does not indicate any stultifying of the growth of the co-operatives, but the honorable member for Parkes did not read as far as that.

Great changes have taken place in Papua and New Guinea. Last year, the new Legislative Council was endorsed, but it is now under challenge. There is a right of challenge in the High Court. However, this council is typical of the form of government that has been adopted in British colonies of the same kind. A true understanding of how colonialism has worked out will not be achieved until history has moved on for 50 or 100 years. As I have said, important changes are taking place, but they are being brought about by the white people who have colonized backward territories. In Algeria, the white people, the French Algerians, have become a part of the country, and the same sort of thing is happening elsewhere in Africa, although in South Africa probably conditions are different. Where the proportion of whites to the indigenous race is small, you have great problems of government.

I am very pleased to see that more responsibility is being given to the local people in Papua and New Guinea. We know the story of the American colonies, and what happened because responsibility was retained in the old country. The new Legislative Council for the Territory places more responsibilty on the local people. It should be axiomatic that the people of our own race who are engaged in developing that colony have our confidence and respect, but too often we are inclined to criticize the settlers.

I was interested in that part of the speech of the Leader of the Opposition (Mr. Calwell) in which he talked about the white man’s burden. He spoke in a friendly way. He has a very great interest in this Territory. He mentioned that the white people who are engaged in helping the primitive races have, on the whole, done a good job and that they have the interests of the natives at heart. He said that because he is, as we all know, an intensely patriotic Australian. But I can assure him that exactly the same procedure is taking place in other British colonies. People who spend their lives in them have a vital interest in the welfare of the native population amongst which they live.

Despite the events in Africa in contemporary times, in 100 years it will be possible to see the results of white people having lived among primitive races. It will be seen that despotism and tyranny have been removed and a more liberal life introduced to the black people. The Australians are a colonial power, and we will have to go through the same processes as other people who have taken on the responsibilities of governing and helping a primitive race to the goal of self-determination. Great progress has been made in Papua and New Guinea, but development must come through trade. In these countries, trade must be mainly in primary products and the state of world markets has a considerable effect on a young colony. The Minister for Trade (Mr. McEwen) has played an important part in trying to stabilize the prices of the primary products.

There is a danger that the people who have control of Papua and New Guinea will interfere with local customs. The honorable member for Macquarie (Mr. Luchetti) - a very estimable member - talked about taking coloured people out of their habitations and transplanting them into houses between European houses. These people have their own customs which are centuries old. You cannot change those customs quickly without grave danger. One of the grave dangers of teaching Christianity to the primitive races was that the missionaries removed the safety-valve of the old native customs and gave nothing in exchange. That should not be taken as a criticism of missionaries. If you change the local custom and put nothing in its place, you have great trouble for years and do harm to the people whom you think you are helping. For instance, polygamy is a custom among many tribes of New Guinea. An annual report on New Guinea states -

Polygamy is widely practised but its incidence is decreasing. It forms an integral part of certain indigenous social systems to which sudden prohibition would cause destruction. The only satisfactory method of reducing its incidence is by a gradual and fully integrated system of social change.

In other words, it is suggested that these customs should not be changed too quickly. If one took the advice of the honorable member for Macquarie one would start uprooting the whole sections of the population. After all, many of the natives may not wish to live near white men. Why should they? These changes have to be made gradually and carefully, and we must rely to a great extent on the advice of people of our own race, both those in government positions and those engaged in private enterprise.

There is another great problem associated with communal and tribal lands. The honorable member for Macquarie made the extraordinary statement that the Australian Country Party wants to remove the native people forcibly from their lands. It is incredible what honorable members can say in this National Parliament. Communal and tribal lands can cause a certain amount of trouble. Plantation crops, such as coffee and cocoa, are being grown in New Guinea. If such a crop is planted by an individual native, he must have some sort of title deeds or something else, showing his right to the property, which he can pass on. I have had some experience of the problems associated with tribal and communal lands, both agricultural lands and those used for the grazing of native stock. I have seen the rich man, with plenty of goats and sheep, devastate the grazing country at the expense of the poor. Goats and sheep, of course, represented a form of currency. The natives worked on what might be called the goat standard. Goats and sheep were used to purchase brides. The native increased his capital by acquiring more goats and sheep, and those who had many goats and sheep had many wives.

Mr Thompson:

– Pigs were more common in New Guinea.


– Yes. Pigs have very large litters, and if you were successful in raising pigs you acquired many wives. But there is a danger associated with plantation crops, such as coffee or cocoa, which give a big return on a get-rich-quick basis, when they are grown by the natives who have not a background of stability. Education must go hand in hand with progress. I would like to see more attention focussed on the teaching of artisan trades to natives. To my mind a good journeyman can be as valuable as a good doctor or lawyer. If one starts at the bottom and provides a solid foundation by educating the primitive people, one can go a long way towards the ultimate goal.

As to the terms of the loan, I notice from the Minister’s speech that the Administration has appreciated the local problems. It is realized that many natives secrete their money in hiding places because they do not trust banks. This attitude is not peculiar to the natives. We all know of people who have lost their life’s savings through being unwilling to deposit them in banks. Because of this tendency on the part of the natives, it has been decided to issue bonds in the form of some durable material which can stand up to tropical conditions without damage. I would like to suggest that when loans are raised among primitive people there should be some method by which the individuals can be repaid on short notice. They have not the facilities that we have. We can take advantage of the stock market and buy or sell bonds. The natives have no experience of these financial matters, and, like a person new to the banking system, they may subscribe to the loan to-day and wish to get their money back to-morrow. It is quite likely that the Government has considered this aspect of the matter and will make suitable provisions in the terms of the loan.

I would like to know whether it is proposed to confine the loan to residents of New Guinea and not float it on the ordinary loan market. If it is confined to residents of New Guinea, it might be advisable to restrict any sales of bonds or other transactions connected with the loan to that Territory.

The honorable member for Macquarie stirred me to anger several times. He could not understand why the Government had not forced investment in public works.

Mr Luchetti:

– I did not use the word “ force “.


– Well, the honorable member said he could not understand why investment in public works was not encouraged, while private enterprise had easy access to money. The honorable member cannot realize that public works are designed for the use of the people. If electricity is provided it is meant to be used.

It is used not merely for the lighting of houses. If you build houses, as a public works project, with loan investments, you certainly have housing for the people, but you have not found them employment. While money is being spent on public works, you must also have investment in private industry, which will make use of the public utilities that are provided.

The honorable member for Macquarie, with his socialist desire for control and direction, has no understanding of these matters. This was evident from the venomous way in which the honorable member attacked the Bulolo dredging project. He commenced by speaking in a slighting manner about the extent of the profits acquired by the Bulolo golddredging company, but he was not sure whether the amount was £350,000 or 350,000 dollars. But, whatever the amount was, he obviously intended to refer to the enterprise in a slighting and damaging way, because, as a socialist, he cannot stand profits. He did not know whether the profit earned by the company was a fair return on its capital investment, because he did not know what the capital investment was.

He will not acknowledge the fact that shareholders of the company took a risk in investing their capital in New Guinea for the benefit of the nation. After all, the winning of gold in Bulolo benefits not only the people of Australia but also those who live in New Guinea. But this undertaking had to be the subject of attack because it was a private enterprise and because it was successful. When the Minister who was sitting at the table interjected and reminded’ the honorable member for Macquarie that the company was investing its capital for the benefit of the country, the honorable member immediately shifted his ground and went on to another topic.

It is an extraordinary fact that Australians in this Parliament will constantly attack fellow Australians. Any kind of investment for profit is considered poisonous. In the same way as the democratic system is being attacked by the Communists, we find that the Australian way of life is constantly under attack. I amsurprised that the Leader of the Opposition does not take the members of his party totask. After all, he has some responsibility for them. Signs of wear are already showing on the face of the honorable gentleman. We all respect him highly, but unfortunately he has to lead this rag-tag and bobtail party.

Either the Australian system is bad, evil and wicked, or it is not. Which is it to be? Remember that this is the National Parliament. If you believe that the Australian system is bad, then come right out and say so, because, after all, we are trying to foist our system on a young and primitive country.

We have a long row to hoe. During the next ten or fifteen years our administration of the Territory will be under the fire of those who do not wish us well. I am quite sure that every member of this House, whatever his political affiliations, is pleased with the administration of New Guinea, and is satisfied that it has been carried out in a humane and an enlightened manner, and in a way designed to assist the primitive peoples as much as possible, and to lead them to the ultimate goal of selfgovernment. One need not be a prophet to foresee that during the next ten years or so we will have all sorts of committees from the United Nations investigating our administration. They will be composed of people who have not had the slightest experience of colonialism or of raising the standards of primitive people, and most of them will be forming erroneous opinions and criticizing the Australian Government. We must be prepared for this. It is a burden that has to be carried by all countries altruistic enough to try to improve the lot of primitive people.

In addition, a time will come, and in the not too distant future, when the young men of New Guinea, having had the advantages of education, will be demanding selfgovernment. These are developments that we must accept as inevitable. But there is one thing that we have a responsibility to ensure. We have a responsibility to the great masses of the people of the Territory of Papua and New Guinea to see that when the time comes for us to hand over the reins of government the few will not exercise control over the great masses of a very fine peasantry. The broad masses of the peasantry must be well able, as a result of education and the development of the ordinary democratic means of government, to protect themselves under the form of government which we shall give them. But man in evitably seeks power. Whatever may be a man’s colour, whatever may be his creed, he will seek power, and if the younger generation, not yet properly trained for government, see the opportunity to get rid of what they imagine to be the burden of Australian administration, they will do so long before the people of Papua and New Guinea are prepared to govern themselves. These are the things that we have to look at in the future.

The Minister for Territories told us - there was some suggestion by the Opposition that the situation should not be as he stated it - that, regardless of what may be raised by local loans and by revenue in Papua and New Guinea, the Territory will still require large grants in aid from the Commonwealth. I am quite certain that this Parliament will always grant reasonable amounts which will be sufficient to meet the needs of this developing Territory. I was interested in the observations of the honorable member for Macquarie, who said that the Commonwealth should undertake more expenditure in the Territory. That is the normal kind of cry from all Opposition members. In a debate on housing, they say that more money must be given for housing; in a debate on social services, they say that more money must be given for social services; and so on.

Mr Luchetti:

– Does the honorable member deny the need for more and better homes?


– I deny nothing. I am aware of the need. The honorable member could not see why applications for the raising of loans in the Territory for public works should go through the Australian Loan Council. Can you imagine what would happen if they did not, Mr. Speaker? There must be some authority which is responsible for the even sharing of funds among the very many projects for which finance is needed. We are not so rich as to be able to pour out millions of pounds on this and millions of pounds on that. We must have a central authority which controls the total amount of loan raisings by all the interests which constantly demand more money. There must be some authority which prescribes interest on terms and at rates which the finance market will stand. That is what is done every year by the

Loan Council, on which all six States and the Commonwealth are represented. This seems to me to be the most sensible method to adopt in a federation such as Australia.

I conclude by again complimenting the Minister who is now in charge of our Territories. I think that history will show that the great progress in Papua and New Guinea for which we have laid the foundations in the last ten years owes a great deal to the present Minister’s energy, initiative and courage.

Sitting suspended from 5.53 to 8 p.m.


.- On the surface, this appears to be a simple, ordinary, pedestrian, almost pettifogging measure. It provides that the Commonwealth will guarantee public loans in the Territory of Papua and New Guinea. The first loan, we are told, involves a sum of £100,000. We must first consider what this will mean to the people of the Territory. The ordinary Australian citizen, and many members of the Parliament, are probably not quite aware of how far we could become involved in this area in the discharge of our duties and responsibilities. The population of Papua and New Guinea is almost 2,000,000, but the people are in an almost completely primitive state. I must say that their state is not quite as primitive as it was when the Minister for Territories (Mr. Hasluck) took over his portfolio. I disagree with quite a few things about the Minister, but inside the structure of this Government, it is a miracle that he has been able to do what he has done.

We must face our responsibilities, if we want to raise the standards of living in Papua and New Guinea to our standard here. First, we have the problem of creating an education system which would be equivalent in size to that of Victoria. I understand that the number of children of school age in Papua and New Guinea exceeds the number in any Australian State, except New South Wales. The provision of a satisfactory education system will involve tremendous capital expenditure and enormous public effort. If we want to give these people housing of a standard equivalent to that on the mainland, we will have to provide almost the same number of houses as Victoria provides and at least the number of houses provided by Queensland. If we want to give them these standards of living, we must give them industrial resources greater than those of Queensland. This is a terrific undertaking. These things will not be done easily, and they will require the utmost Australian public support. Of course, Australia will provide a lot of money in addition to money raised by these Commonwealth-guaranteed loans.

The loan we are considering to-night involves only £100,000. We on this side of the House, of course, support the action of the Government in giving a guarantee, but I do not think that we support in principle the decision of the Government not rouse all the resources at its disposal to raise this £100,000. Let us examine for a moment what we are doing. In my view, we are introducing into the life of theprimitive community of Papua and New Guinea one of the millstones of our life. I refer to interest or, in other words, usury.

Mr Mackinnon:

– Don’t be silly!


– The honorable member for Corangamite, having been associated’ with the banking structure, is a bit fond of usury.

Mr Mackinnon:

– At least it is practical.


– It may be practical, but let us examine what we are attempting todo.

Mr Mackinnon:

– You have a hopeless idea of it.


– I suppose in a community governed by such a government as this, any idealist must feel pretty hopeless, but we soldier on. Eventually we will remove the millstones placed around the neck of the community by the Liberal Party.

Electricity supply projects are mentioned as being the beneficiaries, or should I say the victims, of this loan. What is the interest burden doing to the Australian community generally? In the past ten years, the Australian railway system, which has a capital investment of some £770,000,000 - a little more than one-third of the total amount expended on defence in the last ten years- has paid £137,000,000- in interest. Imagine what that has done!’

Mr Hulme:

– They have been charged interest, but I do not know that they have paid it.


– The interesting point raised by the remark made by the Minister for Supply is that the railway system which is not called upon to pay interest on its capital makes a profit - I refer to the Commonwealth railways system. All the other systems, carrying a millstone of interest, cannot make a go of it. Their debts strangle the whole system of State finance. In every State, Mr. Speaker - in your own as well as in mine - that is a feature of public life. The policy of putting borrowed money into capital works . and charging interest on it is placing a millstone around the community’s neck. One of the features of loans is that they are inflexible. They go on and on like a babbling brook and are not repaid as production increases. Therefore, the acceptance by the Opposition of the idea behind the loan mentioned in this bill is a qualified acceptance. I hope that the Government will realize that it is a pedestrian approach to the problem of the development of Papua and New Guinea.

The Minister gave some interesting figures in his second-reading speech. He said that some £5,000,000 was held in the banking system of Papua and New Guinea. I wonder what use is made of that £5,000,000. Is it merely held in the banking system of Papua and New Guinea, or is it used as part of the basis for the liquidity of the Australian banking system? It is really time that the Territory had its own indigenous banking system, if I may use the term. Several members of the Parliament have been to New Guinea, and I have had the privilege of a visit there. I am not satisfied that enough facilities are available to the local citizens for the banking of their money. The Minister said that these people had a bad habit, perhaps, of burying their savings. Why can we not develop a savings bank system such as that obtaining in Australia. I refer to the school banking system.

Mr Hasluck:

– Every patrol post has a savings bank.


– That may be so, but how many patrol posts are there?

Mr Crean:

– There are not enough patrol posts.


– I am afraid that is so. Even the Minister does not realize the tremendous numbers involved in this problem. We have a population of 2,000,000 in thousands upon thousands of villages. But is there any reason why all these villages should not have the same type of little banking system integrated into their own communities as I saw when I visited one of the villages outside Wewak, I think it was. The village had a little co-operative society; the people brought their bags of peanuts to it, were paid by a native in money and they put back their dividend into the cooperative society. Can the Minister say that all these thousands of villages have banks?

Mr Hasluck:

– No; some villages have not any money yet.


– That is right, and even if they had, you would take it from them, lend it back to them and charge them interest on it. This, of course, is the system which the Government is importing into the community life of Papua and New Guinea, and it is useless for the Government to deny it. If a project is built with money on which interest is paid, then the services of the project become more expensive than they should be. If loan money is used in this way to provide electricity, then every kilowatt of electricity carries some charge for interest. People who use electricity will have to meet extra charges because of the interest burden. I understand that the interest burden carried by the Snowy Mountains scheme will almost double the cost of electricity provided by the scheme. If that happens here in Australia, it will happen also in Papua and New Guinea. Therefore, our acceptance of public loans employed in this way is a qualified acceptance.

But other factors become of importance in Papua and New Guinea. This is an expanding economy. Unfortunately, the economy is not necessarily in the hands of the people who own the Territory - the indigenous inhabitants. Another feature is the failure of the Government to keep up to date with the progress of the financial system of Papua and New Guinea. According to the report for 1956-57, no information is available relating to current accounts maintained by indigenous people. I wonder why that is? In the past twelve months, I have put questions on the noticepaper asking the Treasurer (Mr. Harold

Holt) about the wealth of Papua and New Guinea, calculated in the same way as we calculate our own national wealth or gross national income, but we have no such information. I agree that this is a particularly difficult problem. But if we are attempting to import into Papua and New Guinea the ordinary systems of finance, then we must apply ourselves as industriously and scientifically to the study of the economy of the Territory as we do to the study of the economy of Australia. My investigation of the reports indicates >hat there is a great deal of vagueness in our understanding of the Papua-New Guinea financial system and of the actual wealth of the country. I doubt whether it is possible to find from these reports just how much of the profits made in PapuaNew Guinea are exported to the mainland. There are, of course, investments in PapuaNew Guinea by people outside the Territory, which are not recorded in the reports. Some of the companies concerned are registered in the Territory, and some are not, but undoubtedly a great deal of the profits made come back to the mainland. There is not enough wealth in Papua and New Guinea now, so there is not much justification for a single penny being brought back to the mainland. If profits are made there, the people on this side of the House say that those profits are rightfully the property of the people of New Guinea in that they should be used for the development of the natural resources there. We know that there are people who make exceptionally large incomes in Papua and New Guinea. In respect of Papua and New Guinea we have no report from the Commissioner of Taxation as we have for Australia.

Mr Cleaver:

– We will have.


– We will have, but we have been there for a long time. I admit that taxation of incomes of the people up there was one of the projects on which the Minister embarked of which we approved. He did not get wholehearted approval from his own side of the House, but he had the support of myself and others for that.

What about the huge incomes gained in Papua and New Guinea by people who are technically resident there, but who are just as likely to reside for most of the year in Australia? What about the companies mentioned this afternoon by the honorable member for Macquarie (Mr. Luchetti), which are making large profits there? Why are not those profits ploughed back for the development of Papua and New Guinea? Why are not the people who are making profits out of copra plantations - and there is a big return from that field at the moment - using them for development? Why is this not demanded of them?

There are other points of interest in this matter. The investor in public loans in Australia has had an unhappy ten years of it. We are prepared to guarantee a public loan, but are we prepared to guarantee that when people cash their securities at maturity the money they get will have retained its value? Of course, this is a government of high interest rates, and no matter what interest rate this loan carries it may well be struck down in its value because of the Government’s own high interest policy. In the report for 1957-58 from which 1 read previously, at page 165 the money market rates are set out as follows: -

So all the millstones of capitalistic society are being superimposed on the primitive natives of Papua and New Guinea. I expect the Minister, as I know full well that he is a man of great goodwill towards the people under his dominion, to bring a more adventurous spirit to the financing of public works in Papua-New Guinea. The people of Australia are investing about £17,000,000 of public money in this Territory, and are demanding no return. That is our contribution, and the people can be proud of it. The country supports the making of this contribution towards the development of the Territory, but we also have to do something original and adventurous about gathering the individual wealth of the people of Papua and New Guinea and using it to their advantage. An internal banking system would be one method of doing that.

The Minister said by interjection that there are large numbers of banks in the Territory, and also that many of the people there have not got around to a cash economy. If this measure will bring some amelioration to the lot of the people up there, and will in some ways ease the pressure so that they will get their projects going, we give it rather grudging consent. But for heaven’s sake do not commit the financial sins of the past hundred years which have led to the imposition of layer upon layer of interest burden on every section of the economy, so that schools cannot be built, railway services are strangled, and the costs of water supply and electricity schemes have doubled. If we have not learned from our own past it is time that we started to apply ourselves to doing so. We give this measure grudging acceptance in the hope, and with the fervent prayer, that not too much of the spirit of usury will be imported into the affairs of the primitive people of Papua-New Guinea.


.- If the ancestors of the honorable member for Wills (Mr. Bryant) had not been a bit more practical than he is in matters financial and economic he would still be running around in a lap-lap. In passing, the honorable member mentioned banks and apparently, although he has been to the Territory of Papua-New Guinea, he did not seem to notice any there. That is rather extraordinary, because even in June, 1958, which is eighteen months ago, there were sixteen branches and agencies of banks engaged in trading business up there, and there were 46 bank branches engaged in savings bank business. I am sure that there will have been some increase in those numbers in the meantime. However, Sir, dismissing this lack of practicality about such matters, one might well gain from such speeches as that of the honorable member the extraordinary notion that somehow we should be providing in Papua and New Guinea standards equivalent to those existing in Victoria. That is one of the fantastic notions the mere utterance of which leads to expectations, and then to a feeling in the world that because Papua and New Guinea or some other place which does not possess resources to support such standards, is not provided with these standards, there is some failure on the part of the white man. It is the kind of suggestion which sounds silly when uttered by an honorable member here, but which is in fact a serious matter, and it should be discouraged. Undoubtedly, in the course of years, we shall do all we can for the people of Papua and New Guinea, but long before their standards of living are brought to those that we now enjoy they will certainly take the matter out of our hands.

The immediate purpose of this measure is to make possible a loan of £100,000. In fact, as the Minister pointed out at the time, the measure is much more significant than that because it will give a carte blanche Commonwealth Government guarantee to all public loans raised by the Administration of the Territory. This, over a long period, could be a very serious step to undertake. One cannot judge what changes there will be in administration, and presumably if there are changes, this act will be changed. If the act is changed this particular provision will be very difficult to amend without arousing considerable feeling. So do not let us dismiss this as just an odd loan of £100,000. This is the start of what could be a very long trail of heavy contingent liabilities for the Australian taxpayer. This is a burden which I have no doubt the House will willingly undertake, but do not let us dismiss it as a light and unimportant matter.

The Minister gave excellent reasons for this measure, looking beyond the immediate £100,000 loan with which it deals. First of all, the loan will add to the amount of money and resources available for the development of Papua and New Guinea. The fact is that there is in the Territory a good deal of cash owned by the natives and there is even more owned by European interests; and this money could be well and fruitfully invested in public loans, thus adding to the supply of the kind of equipment so badly needed in the Territory. In the long run the educational side seems to me to be the most important, and in this connexion I do hope, Sir, that in its future loan policy the Administration will tie loans as closely as possible to individual projects, and make the people engaged in the particular project understand the financial implications of what they are doing, because, in fact, the use of capital is one of the things which most clearly needs discipline in any system, and if capital is- provided free, it is invariably wasted. The main point of interest in government undertakings is really how they serve as a measurement of the cost, so one cost may be compared with another. So I hope that as and when wherever possible, loans raised there will not be of a general character, but will be tied to specific projects; and that is even more important, too, in the matter of educating the people in the ways of finance.

No doubt the honorable member for Wills will regard it as a very wicked thing to teach them our ways, but if they are to have our standard of living or anything like it, unfortunately they have to learn a lot of our wicked ways. The development of institutions, which the Minister gave as his third reason, does go closely with the education process and by gradually building up a body of knowledge and expertise in this matter, this will be a useful contribution to the development. And the potential is there. As the Minister has pointed out, the natives’ cash crops in 1958-59 were valued at over £3,000,000, so they are already in this wicked monetary system and, since they are in it anyway with this amount of cash, the more we can direct these moneys into fruitful avenues which will promote their further progress, the better for the people of the Territory. It is remarkable to see the growth of the savings bank deposits. They have grown from £2,000,000 to £5,000,000 in five years, which is an extraordinary rate of growth and certainly provides a very useful background to the floating of loans in the Territory.

I should like to express the hope, too, that if these loans are to be approved by the Australian Loan Council and follow the semi-governmental pattern, they will not be stultified by conditions imposed by the Loan Council to the same extent as the semi-governments are within Australia. One thing is not quite clear to me. If, in fact, these loans are mopping-up the financial resources in the Territory, why eventually must they all go through the Loan Council? I suppose that is because of the Commonwealth guarantee. The Leader of the Opposition (Mr. Calwell) made some very good points about what we were doing for

Papua, and New Guinea. The giving of this guarantee is a further instance of the heavy underwriting of the development of these Territories, and the pace at which our annual subvention is growing is indeed quite remarkable. In 1953-54 we contributed £5,400,000 and in 1959-60 our contribution will be £13,140,000.

Mr Curtin:

– It is not enough.


– It is not enough, but the Minister certainly promised more. In the course of his second-reading speech the Minister said these words - and we should note them carefully -

Indeed, it is quite plain that for many years to come the amount of that assistance will have to increase very greatly if the job we are doing is to be well done.

That is a true statement and it is one of which we could do well to take cognizance when we are thinking of the aid we extend to countries with a lower standard of living than Australia. The Leader of the Opposition was quite right in pointing out that we should, when we are in international arenas, point out that our contribution to Papua and New Guinea is a very heavy reinforcement of what we are already doing in other international fields. In fact, we are contributing to Papua and New Guinea about £2 for every £1 we give to others. Even in the field of international development and relief our expenditure is growing quite fast, and this year it has leapt from £4,100,000 to £6,300,000, largely due to the heavy increase - the doubling almost - of the allocation for the Colombo Plan over and above the actual expenditure last year.

Our danger in the international relief field is that what can easily become quite a considerable effort to us is, to other countries, but a drop of water in the bucket. But to New Guinea and Papua, which are our first and primary responsibility, the same amount of money will make a very great difference and I suggest that in the international field we will be judged far more, in the long run, by what we are doing in our own territories where we have absolute responsibility and where the people are, at least at this stage, very much in our hands. That is the place in which we should make our major effort, and we should, before engaging in any other international contributory exercise, think first of our responsibility to New Guinea and Papua.

There is one respect in which we might, I think, call in the international comity where year by year we are to be examined, for our work in Papua and New Guinea is subject to critical examination by the United Nations Trusteeship Council. There is another international institution which could be of considerable help in this field and that is the International Bank for Reconstruction and Development and some of its immediate offshoots. There is, for instance, as part of the International Bank, a development institute, and in that development institute folk from the less-developed countries of the world are brought together for courses in varying degrees of six months or sometimes more or sometimes less. There they meet the people responsible for administration in other countries of the world .and also the international officials who by now have a very wide and varied experience in the problems of fostering international development.

I should like to see members of the Administration in the Territories go sometimes to this international development institute, because I believe that they will have a great deal to learn and, in fact, that probably they will have something also to contribute. This raising of the standard of living in Papua and New Guinea is a long-term exercise for us which will involve us in a heavy burden. The international comity also has some duties in this connexion and it should not be beyond our plans to get the advice that the people in the International Bank can bring to bear on our problems - advising how the development should proceed - and we might even get some finance from that section, not only in the government channels but also through another inter-governmental organization, the International Finance Corporation which has been set up specifically to make loans for the development of private enterprise mainly in undeveloped countries. These seem to .me to be two fields which we could do well to explore in relation to our Territories.

The fact that here in this bill we are starting off to establish a new public loansmechanism will, in effect, be a very valuable step towards educating the present personnel, and also any natives who can be edu cated and placed in that kind of position rapidly, in the ways of raising the resources to carry the development of New Guinea and Papua further, ‘which is something the whole House has at heart.


.- The selection of a general alternative for the people of Papua .and New Guinea for the whole of their future is a subject that is hardly relevant to this bill. The proposition is much narrower than that. The bill concerns itself only with a proposal that the Commonwealth shall guarantee loans raised for public purposes in New Guinea. In the sense that it introduces this principle for the first time, it calls into question the general future of the people of New Guinea and, I suppose, makes relevant the alternatives which were described by the honorable member for Wills (Mr. Bryant) and the honorable member for Wentworth (Mr. Bury). I think that we are entitled to see which of those alternatives is the more primitive.

We have listened to the honorable member for Wills, whose presentation of his case was bright and optimistic. By interjection, it was called idealistic. We have listened to the honorable member for Wentworth who, in his customary bright and happy manner, described the future for the people of New Guinea as one of learning the ways of finance. I do not suggest that the honorable member had ancestors who were in lap-laps some little time ago, but I hardly think he shows himself to be more progressive and up to date than the honorable member for Wills. I think that the future of the indigenous people of Papua and New Guinea is probably pretty much tied up with the kind of financial system for which the honorable member for Wentworth stands, and it is very unfortunate that they are so much tied up with it. It would be preferable to have a little more of the alternative which was proposed by the honorable member for Wills, and to proceed a little less rapidly along the road on which this legislation is only a small step. Clearly enough, this legislation is experimental and exploratory. It proposes an addition to the ways and means of raising money for expenditure upon public purposes in Papua and New Guinea. Apart from the mechanism of the measure, the first question that arises is: Where is the money to come from which will be put into the public loans that the Commonwealth will guarantee? It would appear that the Minister for Territories (Mr. Hasluck) does not suggest that this money will come from the well-to-do people in New Guinea, or from the large companies such as those which were mentioned by the honorable member for Macquarie (Mr. Luchetti). Presumably it will not come from them, for the very good reason that they will probably invest their money at 10 per cent, or 15 per cent, interest, as they are doing now. I should think that it would be very unlikely that they would invest their money in a public loan paying perhaps 5 per cent., or something of that order, to finance an undertaking in New Guinea. So, the indications are pretty clear that the money is expected to come from the indigenous people of New Guinea. We know, as the Minister indicated in his second-reading speech, that there has been quite considerable development among some of the indigenous people. The Minister stated -

In addition, the indigenous people are participating in the increased economic activity in the Territory. Over 25 per cent, of several of the major export crops are being produced by them and an estimate made by our agricultural department shows that the cash crops produced by native growers in 1958-59 were valued at over £3,000,000. Translated into practical terms, this means that in the course of the vear over £3,000,000 in cash found its way directly and immediately into the hands of native agriculturists. Many of them are not banking their money but are hoarding it in their own private hiding places.

The first question which occurs to my mind is: How much of that £3,000,000 will the native producers have to spare after meeting their normal costs of living and the cost of development of their own economic activities? Just how sound is the Minister’s assumption that they are putting their money in bottles and hiding it under their houses? If their experience is similar to that of their Australian counterparts, they have not much money over and above that required to meet the cost of living and the cost of their own economic activities. I question the suggestion that the indigenous people will have a great deal to spare to put into public loans, which will pay probably not more than 5 per cent, interest.

The honorable member for Wentworth indicated that savings bank deposits in the Territory had risen by from £2,000,000 to £5,000,000 in recent years. This indicates that somebody in the Territory is saving money, but who makes the savings bank deposits? Quite a number of people in New Guinea are not indigenous. No doubt they have money in savings banks. Do we know the composition of the savings bank balances? It may be admirable, if you agree with the process, to try to introduce a system of public loans backed by the Commonwealth, but how much is the department in touch with the amount of money which will be available for such investment?

The legislation is also related to this topic in another way. As an argument in favour of it, the Minister, at a later stage in his speech, said -

Having said that, I return to this other phase of the education of the native people in economic activity, which is represented by this loan proposal. We want to encourage them in thrift.

I think that the days have gone - certainly in Australia, at any rate - when the existence of a government or a public loan can be said to encourage thrift. Over the last ten years in Australia it has done the very opposite. We know that those who have subscribed to public loans have seen the value of their subscription fall during the duration of the loan, so that if they wanted to withdraw their money before the expiration of the period they have had to do so at considerably less than the face value of the subscription, and if they have allowed the loan to run its full term, the Prime Minister has seen to it that the money subscribed has bought a great deal less at the end of the period than it did when the loan was taken up. Government loans in Australia no longer have any validity as a means of encouraging thrift. For how much longer will they have any validity in New Guinea? This system must take into account the average economic conditions in New Guinea which may well be the same as they are in Australia.

This raises another alternative with which the Minister, no doubt, had no intention of dealing in his speech, but which he did deal with when replying to an interjection by the Leader of the Opposition (Mr. Calwell), who asked -

Does the Minister mind if I ask him to say a few words, before he concludes, on native cooperatives and their growth? I think that is relevant.

The Minister had been discussing the activities of the natives and their capacity to save, and as a result of that capacity to save he had been arguing that they should invest money in public loans. The Leader of the Opposition said, “ Yes, but what about their co-operative activities? “ I think that we all agree with the Minister, who replied to the effect that the growth in co-operatives in New Guinea had been quite remarkable. There is an annual turnover of £1,000,000.

I think the Minister understands that, generally speaking, we on this side of the House have approved the broad lines on which his administration has worked in the Territory, but we have said from time to time that more can be done in certain directions. If this procedure of attracting money succeeds - I doubt if it will - it may well take money from the native people which would be better invested in their cooperative activities. The possibility of this being a conflicting alternative became only too apparent during the course of the Minister’s speech. I think that when we are engaged in an overall examination of the alternatives at present before the people of New Guinea, whether we think of them in terms of the up-to-date, financial, profit-making, acquisitive, keen, business-like activities of the honorable member for Wentworth or the more idealistic co-operative ones of the honorable member for Wills, it is certainly beyond question that everything that can possibly be done to encourage the development of co-operatives by the indigenous people in New Guinea should be put completely beyond doubt.

These are the overall considerations and no doubt a great deal of time could be given to examining them. There are a number of specific matters which I want to mention. The first is the purpose and limits of this legislation. Here I go some of the way with the honorable member for Wentworth. The Minister’s speech is a little vague, I think, on a number of aspects. First, with regard to the purpose of the measure, the Minister said -

This bill is a simple measure serving one purpose only. It proposes to amend the Papua and New Guinea Act so as to give a Commonwealth guarantee to any loans borrowed under the laws of the Territory of Papua and New Guinea.

That is a very wide blanket provision. It causes us to ask: What are the specific cir cumstances? In answer to this the Minister’s speech tells us that -

Loan Council approval having been received, the Administration of the Territory introduced a bill in the Legislative Council for the Territory last February to provide the machinery for the raising of loans by the Territory Administration by such means as inscribed stock and treasury bonds

So it appears that in respect of any public loan which has to be guaranteed a bill must be passed through the Legislative Council of the Territory. The Minister, in answer to an interjection by the honorable member for Mitchell (Mr. Wheeler), went into some detail. He said -

Each year the Territory will make its application, through the Commonwealth Treasury, to the Australian Loan Council and, on receiving the approval of the council it will proceed to borrow in the amount . . .

The point I should like to have cleared up is whether the Legislative Council of the Territory passes the bill and as a result its application goes to the Commonwealth Treasury, for submission to the Loan Council, or whether it has done that before.

Mr Hasluck:

– The Legislative Council passes a bill after the amount has been approved.


– Then it goes to the Australian Loan Council?

Mr Hasluck:

– No, it goes to the Loan Council first. When it has received the Commonwealth Government’s approval for the raising of a certain amount by loan, a bill is then introduced in the Legislative Council.


– It goes to the Commonwealth Government first and the Commonwealth Government goes to the Australian Loan Council?

Mr Hasluck:

– And then the bill is introduced.


– That makes the matter clear to me now. The other point which I think the honorable member for Mitchell raised, and with which I do not think the Minister dealt directly, was whether there would be some underwriting of this loan. Would it come into the financial houses of Australia?

Mr Hasluck:

– No. The money has to be raised in the Territory. It can be raised either by public subscription or by negotiation.


– Well, the Minister’s replies certainly clear up the points which I thought were in doubt. The only other point I wish to raise in this debate is the choice of the Government in turning to borrowing as an alternative method of raising public revenue. I think this matter is relevant to this bill because it is a clear choice. Something else could have been done and perhaps the Minister will answer that point. Something else has been done. Taxation measures have been introduced into the Territory laws in recent years. But this is quite clearly and distinctly a choice of borrowing as against taxation. The honorable member for Wills pointed out a number of disadvantages associated with .this.

First of all, borrowing is costly. As an example, the Victorian Railways to-day have to pay £3,000,000 or £4,000,000 in interest on loans, many of which were raised many years ago. Clearly the introduction of legislation of this sort envisages that the public utilities in New Guinea and Papua will be loaded with an interest cost for years to come. Several things are raised here. First of all, I hope the public utilities will have a system of accounting which ensures that the capital invested in them will be written off properly in accordance with effective accounting techniques and will not be left on the books to remain a charge on operations for years and years. As has occurred with quite a large number of Australian public utilities the capital sums remain a charge on operations long after they should have been written off and long after they would have been written off if that capital had been invested according to ordinary methods of private enterprise. Quite a significant portion of the interest burden on a number of public utilities in this country should have been cleared long since had a proper system of charging and writing off been followed.

But the point is whether we choose this method which imposes interest costs upon the community. It is merely a transfer payment between those who have not got it and those who have a bit more. This is a deliberate choice which the Government has made for a great many years. In respect of the loan for Papua and New Guinea, a mere £100,000 is involved. But the Government has done the same kind of thing in many other directions. In almost every conceivable direction it has turned to borrowing rather than the use of taxation.

In a bill of this sort where we are concerned with a deliberate choice of this kind, we are entitled to ask: What has been the revenue from taxation? What has been the burden of taxation imposed upon the Australian community as a whole? In summary, the burden has been that, throughout this great inflationary period, throughout the time when we have had more demands for public utilities here in the Commonwealth as well as in the Territory of Papua and New Guinea, the amount raised by direct income tax - which I think, by any standard is the fairest tax of all - has increased merely from £386,000,000 in 1951 to £388,000,000 to-day. Although personal incomes from which that tax has been taken have risen by 100 per cent., the proportion of tax has fallen from 42 per cent, to 34.4 per cent.

I think this must be realized when the House is considering legislation of this kind to raise money by loan which will impose an interest burden upon these utilities it is helping. Would it not have been more economical to raise money which would be less costly to the public utility or service involved? The answer clearly is, “ Yes “. If it was economically possible, because the burden of taxation which existed in 1951 was a reasonable one, to raise £386,000,000, surely £388,000,000 could be raised to-day.

But the Government has chosen not to adopt that course. It has chosen to adopt the course of turning to sources from which it can borrow. It has done this in almost every conceivable direction. It has refused to use the fairest means that exists of raising money for public purposes. When it has failed to get what it wanted by means of loans, it has turned not to the fair direct tax, but to the indirect tax. Excise collections have risen from £100,000,000 to £237,000,000 in the period I have mentioned. They have more than doubled. As a proportion of net tax collections, they have risen from 10.7 per cent, to 21.2 per cent. The excise duty is an example of a tax which is borne by people in proportion to their spending on consumption goods. Those who spend a great deal of their income upon consumption goods, as most of those in the lower income groups do, pay a very high proportion of this tax. When the House is considering legislation of this kind, it should be aware of the fact that the Government is again making a positive decision to turn to loans, carrying the cost of interest, when it should and could turn much more to direct income tax as a source of funds for public development.

Mr. Speaker, the honorable member for Wentworth concluded by saying that he thought that the development of Papua and New Guinea was a special responsibility of Australia, that we should regard that Territory as our first responsibility when considering the countries that needed assistance of this kind, and that we should turn to the international money market for the purpose. I want to say something on the question of turning to international borrowing for this or any other purpose. We must realize that borrowing from overseas is much less valuable than those who regard it as a part of the traditional financial mechanism believe it to be. Borrowing from overseas by the Commonwealth can add to receipts in our balance of payments. It can give us an additional margin for expenditure. Over the last two years, we have lived on this margin. The difference between our receipts from all other sources and our expenditure upon imports and the other payments made overseas equals the amount of capital introduced from overseas - the amount of borrowing. I feel sure that the main attraction that borrowing has for the Government is that it gives more play in balancing receipts and payments. It is that which has influenced the Government most, I think.

The only other reason why we can benefit from international loans is that sometimes, but not always, they bring to this country techniques which otherwise we might not have, but there are alternative ways of obtaining the advantage of these techniques. We can obtain them by various forms of management contracts. In relation to the Bell Bay project in Tasmania, the Government could accept a management contract from the Swiss Aluminium Company or accept the ordinary form of international investment by an American concern. It seems to me that preference should be given to the management con tract, but I assume that the Government will follow the precedent it has set in almost every case. It takes the course which will increase the receipts side of the balance of payments account, so that it can import more. It does not ensure that the extra goods imported are capital goods. We may get an addition to capital as a result of overseas loans, but there is no tying of the money borrowed from overseas to any kind of capital development. If we examined the figures - they would not be relevant in a debate of this nature - we would find that there was no rise in the aggregate or in the proportion of capital imported into this country which could be correlated with the rise in the amount of money borrowed from overseas. Our borrowing has not been asociated with a rise in the amount of capital that has come to Australia. The amount of that capital has remained a fairly constant proportion of the developing gross national product.

Capital borrowed is simply money added into our balance of payments, and it gives the Government scope to lift more controls of imports, and to import more consumption goods which may not contribute very much to the economic development of this country. When we talk about establishing an electricity plant in New Guinea or about building a railway to Mount Isa and about borrowing from the International Bank or anywhere else overseas for the purpose, we cannot be certain that, as a result of the loan, any machinery, railway lines or rollingstock will be delivered. It is simply purchasing power of an international type which is made available to us. I say to the honorable member for Wentworth that it is not necessary to borrow overseas in order to obtain capital resources. That would add only to the Australian balance of payments on the receipts side and probably would lead us to import a larger volume of consumption goods. It would be very unlikely to lead to the introduction of any more capital equipment for electrical establishments in Papua and New Guinea.

So I think that the most that can be said about this legislation at present is that it is an interesting experiment. It is an attempt to see what can be done in getting cash from the indigenous people of New Guinea, who are believed to have a certain surplus of cash. This would represent a contribution to receipts for the Administration in New Guinea and, if it succeeded, would make it less necessary for the Government to raise money by taxation. In other words, this loan would make the Government a little more popular than it otherwise would have been, because of the resistance to taxation in the Territory and the presumed resistance here. The Government, in this measure, as in practically every other measure in the last ten years, has chosen popularity rather than what is economically sound.


.- It is obvious that the honorable member for Yarra (Mr. Cairns) has not been in New Guinea over the last six months when he says that the Government has chosen the course that is popular rather than that which is economically sound. During the last six months the Government has introduced a measure into this House imposing income tax in New Guinea for the first time. Whether the Government was right or wrong, that was certainly, in the first stages, an unpopular measure. I tried very hard to follow the honorable member’s line of reasoning. I gathered that he said it was wrong in principle to raise loans in New Guinea for public works, and that the money should come entirely from taxation. He did not explain where the people were who were to be taxed. If the taxation were to be imposed entirely in New Guinea, we should probably find that that would be a much more unpopular move than the raising of a loan of £100,000 or any other amount in New Guinea. If he says that the taxation should be imposed in Australia, we should look at the figures to see what the Australian taxpayer now supplies for New Guinea and what he has supplied in the past. During the course of his secondreading speech, the Minister for Territories (Mr. Hasluck) said -

With self-government as the goal for the Territory, we have to work along every line towards a greater maturity in the structure of governmental enterprises and a fuller participation by the community in those enterprises.

This working towards self-government, of course, must be allied with certain things which the people will be expected to do when they finally attain self-government. I suppose that the newly-independent terri tories of Africa have great problems in raising loans from their own people and that they often find that it is not all milk and honey when you gain the independence for which you have fought for so long.

I was amazed that the honorable member for Wills (Mr. Bryant) showed resentment of the expectation that the indigenous people will contribute to these loans. There is no doubt that some of the indigenous natives of New Guinea and Papua are attaining a fair amount of wealth. I can remember an occasion in Wau when a native came into the post and asked that his money be counted. He had it in bags, and there was in all about £1,800, in shillings, sixpences and two-shilling pieces. He had been saving up to buy a truck. If you go up to the Gazelle Peninsula you will find that some of the Tolais have amassed amounts that could almost be described as fortunes. We must decide whether it is proper to encourage them to put their money into loans which will be used for the development of the country, or whether it would be better for them to leave it in the ground. It has been suggested by honorable members opposite that when they put the money into loans it decreases in value. Obviously they will get more value out of it if they put it into loans than if they leave it lying in the ground or hidden in jam tins, because in whatever way the money is used it will help in the development of their country.

Some of the natives in New Guinea are growing their own crops and have a fairly high standard of living, as compared with others who live in remote areas and who wonder why they cannot obtain similar benefits. The only way in which they can be given these benefits is by allowing the country to be opened up, thus bringing them closer to markets. The kind of project envisaged in this bill will help towards this end. The time will come when a far greater number of the native people will be able to take part in the ordinary commercial life of the Territory.

It appears to me that some of the speakers in this debate have not studied very closely the report of the United Nations Trusteeship Council on the trust Territory of New Guinea. I refer to the last report, which was printed on 8th June, 1959. It has nothing but praise, in most of its sections, for the administration of the Territory by the Australian Government. There is no harsh criticism. There are plain statements of fact about matters that are not exactly as the council would have liked them to be, but time alone will solve some of those problems. It is a great pity that this report, which speaks so highly of the administration of the Territory, is not read and fully understood by every representative at the United Nations, because I fear the day when the question of the trusteeship of New Guinea can be decided, not on what has been done in the country, but purely on a political level.

I was rather surprised to hear doubts expressed about whether natives used banks. In every native market in New Guinea, in every centre, there is a branch of the Commonwealth Bank, at which the natives can deposit their money - and some of them have done so to considerable effect. Certain natives now have credit balances probably far greater than those of many honorable members sitting in this House.

Mr Curtin:

– The speaker included!


– You are not wrong. You are exactly right for the first time in your political career. As I said before, the honorable member for Wills expressed some doubts about natives investing in these loans. The extent of the loan is £100,000, and the Minister said it was hoped that the indigenous people will be encouraged to invest in it. I think they should be brought to realize that investment in a loan such as this, which will be used by the Administration for certain developmental works, will, in effect, improve the value of whatever assets they possess, and will provide further assets for the other indigenous people of the Territory.

Over the last few years there has been a remarkable increase in trade in New Guinea. In ten years the value of trade has increased from £7,800,000 to £36,600,000. Exports have gone up from £2,800,000 to £16,300,000, and imports from £5,000,000 to £20,300,000. The value of production has increased - and this is not due wholly to a decrease in the value of money, as has been contended by honorable members on the other side. Cocoa tonnage has increased by 64 per cent., and coffee by 151 per cent. The value of copra production has increased by £2,500,000. This has been due, in actual fact, to the higher price that has reigned for copra. Plywood production has increased to die extent of £1,300,000. It is interesting to note that in New Guinea, where a highly efficient plywood industry is operating, one of the matters causing most worry is the resentment shown by Australian plywood manufacturers at the importation of New Guinea plywood into Australia. Although plywood is produced in my own State I think we must take a reasoned view of the matter. Having in mind the employment provided by that industry, the highly efficient way in which it is conducted, and the way in which the native people are being educated in that sphere of industry, no one in Australia should complain at the fact that the product is finally marketed here at the slight expense, sometimes, of our own product.

The native people of the Territory produce 25 per cent, of the coffee and cocoa, and it is only a matter of simple arithmetic to determine how much money is received by the native people for their industry in these activities. It is easy to see that a small loan of £100,000 could well be filled by the native people alone. If this were so, the Government might be induced to float other loans for further public works in the Territory, which would be of great advantage to the 2,000,000 indigenous people, and probably of even greater advantage to them than to the 2,000 Europeans.

Honorable members may be interested to know that the value of cash crops of the natives increased in one year from £1,600,000 to £2,400,000. The natives not in a position to market their crops, by reason of the fact that they live in remote areas under the old village system, harbour resentment against those who live close to the centres of distribution. The bill before us, and perhaps future bills along the same lines, will result in the opening up of much of the country in which these natives now live.

I agree with the honorable member for East Sydney (Mr. Ward), who interjected, when the first speaker in this debate was on his feet this afternoon, that there is absolutely no opposition to this bill, and suggested that we should vote on it and get it out of the way. I give the measure my wholehearted support.


-The bill before us is a financial measure, but many honorable members have taken the opportunity to discuss relations between Australia and the Territory of Papua and New Guinea. Let me say at the outset that whether we have conflict with the native people of Papua and New Guinea in the future depends entirely on two questions; first, whether there is discrimination, and, secondly, whether there is alienation of land. I do not think this bill has very much to do with discrimination. I think it would be a good thing if we accepted the warning of a poet about providing facilities in a country while not really accepting the people of that country. The poet said: -

The cold hard proud Oxonian manner

That to Nyasaland and Ghana

Brings bridges, roads and schools, too late

Finds we have sired a nation’s hate.

I am not sure that it is quite fair to blame Oxford alone; the poet probably had to phrase his verse in that way for the sake of rhyme or metre. The establishment of loan programmes in New Guinea will increase the value of the land in that country, and 1 think one of the most profound and wisest characteristics of the Minister’s administration has been his determination to set his face against the alienation of native land to Europeans. He has withstood a considerable amount of pressure from quite powerful interests and has insisted that the basic philosophy of this Government with regard to New Guinea is that the land is for the native people, and there is not to be an indefinite future of expanding European settlement. The difference between Kenya, with its Mau Mau, and Ghana and Nigeria with their recently obtained independence, is that in the latter two countries, either for climatic reasons in the case of the former Gold Coast, or because of the wisdom of Lord Lugard who was for some time the paramount influence in West African territories, there has been no alienation of land to Europeans, at least to any significant extent. Consequently, there has been no local European vested interest exerting powerful pressure against the granting of independence by the Home Government.

But, in East Africa, which was a desirable field of European settlement and where there has been considerable alienation of land, there have been the Mau Mau disturbances and the struggles for independence. The struggle to get rid of the Europeanlet us face it - has been going on over the last decade, with every prospect that it will continue to intensify. Those honorable members who have been to Hyde Park may have noticed, as I did, at any rate, at the time of the Coronation, that East African speakers, on whichever day one listened to them, had always the same slogan - “ In 1901, when the Europeans came to our country, they had the Bible and we had the land. Now, we have the Bible and they have the land “. That was the standard saying.

I am glad that the Minister for Territories put the matter in perspective when he said that he expects a considerable part of the first loan raised in the Territory of Papua and New Guinea, which will be for an amount of £100,000 at a time when the Budget in the Territory is £17,000,000, to be raised by the Australian taxpayer. But the development of land and the development of facilities mean that land will become more desirable and there is likely to be a pressure to reverse the wisdom of the Government’s policy in setting its face against regarding New Guinea and Papua as areas for European settlement for an indefinite future.

If we envisage our policy as being one which will lead to the ultimate independence of these countries, we need to be realistic. I think that the expression “standard of living” is one of the most abominable ever used. Most of the time when we talk about a standard of living, we are talking about a standard of possession. Those natives of New Guinea who have really developed some very strong concept about standard of possession attribute the white man’s power to his cargoes, and they have imagined that, in the future, some great liberator with a great cargo will release them. That has been the basis of the Cargo cult. But talking of standards of living in a realistic sense does not necessarily mean, I think, that the people of New Guinea who have evolved their own method of housing over the years all must live, if my colleague, the honorable member for

Wills ,(Mx. Bryant), will pardon me, in Victorian brick and tile villas.

The natives may not always have thenwages expressed in the same way as ours are expressed, ‘but, ultimately, -one’s standard of nutrition and so on is expressed in one’s physique, and the :physique of the New Guinea -natives, at least in many areas, compares more than ‘favorably with that of members of this Parliament. So, although the New Guinea natives do not necessarily live in the -same way, although they may wish, very sensibly in their climate, to wear only the lap-lap which the honorable member for “Wentworth (Mr. Bury) despises, and although they may not want to be decked out in a suit which, as the Menzies £1 declines in value moves steadily from about £10 to about £30 as a capital investment they -can, -within their own standards and their own customs, ‘have a high standard of nutrition and a high standard of living. But, if they are to be given independence - and we are speaking of education - we ought definitely to think of technical education. Indonesia is an example of a country which, having attained independence, finds itself in great difficulty in making its selfgovernment viable, because it has not the technicians needed to provide the services of the country.

I congratulate the Minister on the bill. He is to be congratulated on a great deal of his fundamental thinking about Papua and New Guinea. I should like to be able to say that there is no discrimination, in the same way that I can say that there is a policy which sets its face against the alienation of land, but, if there is, I at least think that we need not hold the Minister responsible for that, because his attitude has always been against it.

Minister for Territories · Curtin · LP

– in reply - Mr. Deputy Speaker, this is a bill which seeks the approval of this Parliament for the giving of a guarantee for the raising of loans by the territorial Administration of Papua and New Guinea, and it applies not only to one particular loan but indefinitely in the future to the raising of successive loans. I should like at the outset to express the Government’s appreciation of the remarks made by the Leader of the Opposition (Mr. Calwell) and by other speakers on both sides of the House in commendation of this bill, and of the way in which they have discussed the very difficult and complex problems of the Territory of Papua and New Guinea. In the .course of the discussion occasional speakers have said one or two things which suggest that there may not be on all sides a completely clear understanding of the nature .of the economy of the Territory. At the risk of seeming trite to those honorable members who have a close personal knowledge .of the Territory, I should like to spend a few minutes on that point.

The economy of the Territory cannot be thought about in the same way as we think about “the economy of Australia. It is a mixed and rather complex -economic structure. At one end of the scale, you have a pure subsistence economy in which families live in a village, tend their gardens, eat the produce of their gardens and live on nothing else but that produce, and only occasionally, perhaps, barter some of the produce for some prized possession like a steel axe, a gold-lip shell or something which they cannot produce in their own area. Quite a large part of the country is still in that -primitive economic condition. At the other end of the scale, you have people, both European and indigenous, living in a typical cash economy. That is to say, they either grow something which they sell .for money, or they work and are paid money for their services, and then use that money in order to rent a house and buy their clothes and their food.

In between those two ends of the scale, you have a great number of variations of the pattern. In some villages, the people Am live -mainly in a subsistence economy. They may still build their houses completely out of materials gathered in the jungle and they may still feed themselves very largely out of the produce of their gardens. But, occasionally, they may sell something for a little money which is then applied to the acquiring of some prized possession from a trade store, or which is set aside for a particular purpose. As you go down the sale, you have villages which lean more to the cash economy than to the subsistence economy, and you have others that are about half and half.

Mr Clyde Cameron:

– What percentage would they represent?


– The percentage cannot be estimated. One of our difficulties - and it is a difficulty which must be appreciated by any one who seeks to comment on the Territory - is that, up to date, for understandable reasons, there is no clear, accurate and total description of the economy of the Territory. This year the Government is putting in an expert team which it has managed to assemble to make a basic survey of native agriculture. We hope that out of that survey - which will not be completed hurriedly but will take a few years to complete in all its aspects - we shall get a great deal of basic information which, at present, we do not have. At the present time in the Territory, we do not have anything like the statistical services which are common in Australia. Within the last two years, we have undertaken certain re-organizations to produce the sort of statistical publications which are customary here and which provide the foundation of any intelligent discussion of economic affairs. As we have not had these basic statistics in the past, we have not had a starting point from which to make comparisons and to trace tendencies in the way that comparisons are made and tendencies are traced in a country such as Australia.

In addition to the broad description of the economy I have given, one or two other unusual features are present in the Territory. We have the injection from outside the Territory of a quite substantial governmental expenditure. In the current year, governmental expenditure of this kind exceeds £13,000,000 in the grant administered by my department, and a few millions more come from other departments and semi-governmental authorities. Then we have some adventitious circumstances such as the search for oil which, for quite a number of years now, has been introducing £3,000,000 of outside money into the Territory each year. Another unusual feature is the operation of Christian missions, which one way or another introduce a great deal more money from outside the Territory. Tn those three items, we have an addition to the actual cash available in the Territory that has no direct relationship to production or other efforts inside the Territory. This gives the economy some very unusual features, and it is very difficult to discuss it in the way in which we would discuss our own situation.

Another point I want to bring to the notice of the House is that the native people, in one way or another, are playing an increasingly important part in the economic life of the Territory. Of course, in the subsistence economy, they are playing the whole part, and that unmeasured production is a very considerable production. It covers what they grow in their own gardens and what they barter or consume themselves. Then, as producers of crops which they sell for cash, they earn an income of at least £3,000,000 a year, or possibly a little more. As the employees of Europeans engaged in plantation industries, they receive another £3,000,000 a year in wages. Then there is an amount which, as far as I know, has not been measured of the wages they receive as the result of employment of a domestic or an industrial kind. So, we have the native participation in the economic life of the Territory as producers using their product and not selling it for cash, as producers selling their product for cash, and as wage and salary earners receiving a quite substantial amount, perhaps as much as £5,000,000 a year.

Several Opposition members raised the question that perhaps we are not giving the native people a sufficient opportunity to join in the economic activity of the country. The Leader of the Opposition and other honorable members referred to cooperatives. The statistical fact regarding co-operatives is that at the time this Government took office, attempts had been made to form co-operatives but those attempts had not been very successful. I will not explore the reasons why they had not been successful, but the fact is that at the time when I came to this portfolio, the annual turnover of co-operative societies then operating in Papua and New Guinea was £62,000.

Mr Ward:

– They had only just commenced to function.


– They had only just commenced to function but they had not been functioning very successfully. The annual turnover was £62,000. To-day, solely as a result of development that has taken place during the past ten years, the annual turnover is more than £800,000. So, that is the complete answer to the suggestion of the honorable member for Parkes (Mr. Haylen) that we are not using the cooperatives. Under the government that he supported, co-operatives had an annual turnover of £62,000. Under this Government, they have an annual turnover of more than £800,000.

Mr Whitlam:

– We initiated them.


– I think “we” is a broad statement. If one takes some care of historical accuracy, one must say it was more a voluntary effort by individuals than a government-sponsored project.

Mr Ward:

– That is rubbish. We took members of co-operatives from New South Wales to help organize these co-operatives. You want to bring your facts up to date.


– The up-to-date fact is that this turnover of £800,000 a year compares with a turnover of £62,000 a year, which was the best that the honorable member for East Sydney could achieve after a period of three peace-time years as Minister. I think it is a very strong case. The contrast between those figures seems to me to be very pointed and one on which the honorable member for East Sydney should not hark for too long.

Having given those figures - they cannot be challenged - in order to show that the Government has expanded the use of cooperatives and has also expanded the training of co-operative clerks, co-operative storekeepers and officers to look after cooperatives, I want to stress the point that co-operatives do not seem to be the full and final answer to the question of the participation of native people in the economic development of the Territory. As development proceeds in most areas of the Territory, we find a very strong inclination on the part of the native people themselves for individual and personal enterprise. Some of the most remarkable economic achievements by the indigenous people have been achievements by individual natives, either working alone as an employer or, in some instances, working with the assistance of his family. Many remarkable instances exist throughout the Territory of very great achievement by the exceptional man who, seeing what the European can do, has decided that he can do it too, and, with various forms of assistance, both as technical instruction from the Department of

Agriculture and guidance from extension officers, and with some credit assistance, has been able to enter into production in quite a substantial way. In all parts of the Territory to-day, except those which are not under control, these exceptional individual native people have become people of substance and have established industries which are a credit to them and which provide a very great addition to local production.

Having said that, I want to turn to another point that was mentioned. I was asked whether, if we were using this loan to draw away from the natives some of their savings, we were not likely to deny them the money with which they could carry out development and engage in further production. Now, our purpose is to get what might be called the surplus money which the native does not want to put back into his property. Most of these people who are already farming or engaged in various other activities are quite capable of making pretty shrewd judgments. They are not foolish people when it comes to considering what is to their best advantage. When it comes to making up their minds on whether they will use whatever spare money they have to buy another truck, or plant a few more acres of cocoa, or add to their coffee-processing plant, they can make that decision as shrewdly, I think, as most other farming men anywhere could do. From our experience in Australia, I know there is none shrewder than the farming man.

For the assistance of the indigenous people there are three series of advances available. There is a native loan fund from which a loan up to a total of £5,000 can be made to an organization like a co-operative society, a local council, or something of that kind, in order to enable it to engage in some developmental work. Quite a number of such loans have been taken up. Most of them have been repaid very rapidly, and on present figures I am informed that the total of outstanding advances is now £24,805, and a further £37,000 is idle in the fund awaiting further applications for loans. Then there is an ex-servicemen’s credit scheme, in which indigenous ex-servicemen can participate as well as European ex-servicemen. That scheme makes available to eligible persons, on individual application, advances sufficient to establish the applicant on a holding of 15 acres. Quite a number of ex-servicemen have taken advantage of this scheme, and have applied for advances which they will use immediately on the land that they already have. There is a third system under which the Administrator may guarantee loans made by banking institutions. The total that has been advanced with Administration guarantee for various projects now stands at approximately £220,000.

Continuous attention will be given to this problem of credit assistance in one form or another to the progressive native farmer, or to groups of native farmers, in order that they may share in the advancement of the Territory. Similarly, some assistance and encouragement will be available through the co-operatives.

Now I come to the question of the loan which it is proposed to raise under this measure. As I said at the outset, the purpose of the bill is to establish a Commonwealth guarantee for all loans, either now or in the future, which may be raised by the Administration. The procedure, as we see it at present, will be something like this: In each financial year the Territorial Administration will make its own estimate of what it needs in the way of loan money related to some particular project, and will make a submission to the Government. The Government will then take that as part of the total of the Commonwealth claim to the Loan Council. Some honorable members have asked why the Loan Council’s approval should be necessary. Technically and constitutionally, I suppose, its approval is not necessary. The Loan Council is an association of borrowers of public money who have joined in this council in order to bring a certain orderliness into the borrowing of money for public purposes, and in order also to avoid a situation where several contending and rival authorities are bidding against one another for such loan money as is available. Of course, the operations of the Loan Council are necessary not only to make a determination each year about the total amount of the borrowings to be made in that year, but also, in reaching that decision, to pay some regard to the economic consequences of borrowing either too much or too little. The Loan Council also- has to give attention to the question of the terms on which loans should be raised. The participation of the Territory of Papua and New Guinea in that system will be on the same basis as that of each of the States. The Territory’s bid will be included with the Commonwealth’s bid for a share in the annual loan programme. The approval of the Loan Council having been received, the next step will be the passage through the Legislative Council for the Territory of a bill authorizing the raising of the approved amount. It will be our endeavour to link each approval with a designated work.

I may comment, in passing, that it is intended to cover all forms of loan. A Territory bill has already been passed that is wide enough to cover not only loans raised by public subscription, but also loans which may be raised by negotiation. For example, there may be loans from- trust funds. One example could be the Territory Superannuation Fund, which has money available to put into trusteeship investment. It would be quite proper for that fund to invest money in the Territory rather than to invest it in Australia.

At this point I shall answer a question raised, I think, by the honorable member for Bruce (Mr. Snedden) about the status of these Territory bonds as trustee investments. The Territory ordinance which will be passed for the raising of the first loan will contain a clause providing that for Territory purposes these are recognized as trustee investments. Of course, whether they are recognized as such in any of the States will be a matter for the State legislatures, I understood from what the honorable member for Bruce said that in a number of the, States they will be so recognized.

Mr Ward:

– You had better wind up now.


– The honorable member for East Sydney was interested only in one matter concerning his own reputation, and when that had been proved to his disadvantage he lost interest in the bill. Some honorable members have asked about the terms for the loan of £100,000 which is to be launched shortly. Assuming that the bill now before the House passes through this place and another place, the Administrator is planning to launch a loan for £100,000 on 12th April. In broad terms the interest rate will be 54 per cent, for a term of five years but, for reasons which 1 have explained to the House, we are adopting one or two novel methods in order to suit loan raising to the needs and circumstances and the present understanding of the native people. We have produced certificates rather similar in type to the war savings certificates that were so familiar in war-time. They will be in denominations of £1, £10, £50 and £100. It will be possible for an applicant to apply for certificates in any of the denominations. There is printed on the back of each certificate a table of repayment values so that if, for any reason, a native who does not clearly understand that he has put in for five years wishes to withdraw, it will be be possible for him to cash his certificate. On the back of the certificate is stated the value at which he can cash that certificate at successive periods up to the limit of five years. On maturity, at five years, he gets a return which gives him 5i per cent, on his investment.

Mr Whitlam:

– Why is the interest rate higher than that prevailing for Commonwealth bonds in Australia?


– We are taking the analogy of semi-governmental loans in Australia. It will be possible for any holder of a certificate, by giving three months’ notice, to turn in his certificate and get the repayment value which is printed on the back of it. We hope that will give the native subscribers a better appreciation of the monetary value of these pieces of paper and an understanding of the fact that any time they can, on three months’ notice, cash their certificates for the amount shown on the back. There is a limit on the amount of the certificates which may be held by any one person, and that limit is £2,000.

I think I have answered most of the questions which were raised during the course of this debate. I hope that I have been able to explain to the House the procedure by which these loans will be raised and give honorable members an indication of the particular features applying to this first loan of £100,000. There was one question which was asked, I think, by the honorable member for Yarra (Mr. Cairns). Perhaps I can summarize his discussion by stating the question as “ why borrow at all? Why not finance the requirements from taxation? “ Of course we shall continue, for quite a number of years, to finance the major governmental activities in the Territory through taxation. The honorable member for Fremantle (Mr. Beazley) was good enough to quote a figure I had previously quoted contrasting in this year a loan of £100,000 with a total in the Territory budget of £17,000,000; and the whole of that £17,000,000 is raised from taxation, either in Australia or in the Territory, if we mean the term taxation to cover things like customs duty, excise and fees and charges. We believe - and I am sure we believe rightly - that there is a surplus of money in any community, which is available for lending and which is not available for any other purpose. It is money which, if not lent, would not be used for re-investment for developmental purposes. It is money which is perhaps surplus to requirements, which would otherwise lie idle and which can be applied to loans without depleting any of the capacity of the community to carry on its private investment or to carry on developmental works in a cheaper way.

There was one other point I shall try to cover in the last remaining minute of my time. It was the suggestion that these loans were being raised only from the indigenous people and that we were not expecting the European people to contribute to them. We do expect the European to contribute substantially to this and to future loans. With that criticism was coupled the suggestion that the Europeans were taking it out of the country but were not putting it back, and the honorable member for Macquarie (Mr. Luchetti) made particular reference to the Bulolo Gold Dredging Company. The Bulolo Gold Dredging Company has made profits in the country, but it made a single investment of £750,000 in a timber company in the country and it made another substantial investment, of an amount which has not been publicly disclosed, in a second timber company. That is the sort of pattern one can see all over the Territory. I have visited rubber estates - the honorable member for East Sydney (Mr. Ward) interjects without ever having been to the Territory except on one occasion - recently in the Territory where one can see hundreds of acres of rubber trees being planted at not inconsiderable cost by people there from the profits they have received from rubber, and coffee plantations where people are also putting the profits back into further development.


– Order! The Minister’s time has expired.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 692


Second Reading

Debate resumed from 17th March (vide page 334), on motion by Mr. Freeth -

That the bill be now read a second time.


.- When the Public Works Committee Act has been amended by this bill, Parliament’s supervision of the Executive will have been promoted in several respects. The first amendment concerns the manner in which public works are to be referred to the committee and reported on by it. When the committee was set up in 1913 the act provided that no public work which was estimated to cost more than £25,000 could be commenced unless the committee had considered it and reported on it. This remained the position until 1932, when private works had come to a halt and, in accordance with Liberal theories at that time, public works were brought to a halt also and, accordingly, the committee was disbanded.

In 1936 the act was amended to provide that the committee should consider and report on a work only if the Minister or a member of this House moved, and this House resolved, that it be referred to the committee. This amendment was introduced at 1.30 o’clock in the morning, after no preliminary consultation with any member of the Parliament who had been a member of the committee, and was passed by the House in a few minutes.

Members of the committee, over the years, have wished to restore the original position and, on 10th September, 1957, the Prime Minister (Mr. Menzies) at last accepted their submissions for the restoration of the mandatory clause. Now, two and a half years later, but again without reference to the members of the committee, a bill has been brought before us incorporating most of the committee’s submissions, including this one on the mandatory clause, and henceforth public works which are estimated to cost £250,000 or more will automatically be considered by the committee unless Parliament itself excludes them from the committee’s consideration.

The second amendment will permit a public work which is estimated to cost less than £25,000 to be referred to the committee if Parliament so resolves. There are certain pilot or preliminary projects which would cost less than £25,000, but which, in fact, would set a standard for much later work. This amendment also was sought by the committee, and we believe that it should be approved by the House.

Further, the bill provides that the committee may review a report which it has made and submit a further report. There is, however, a limitation imposed on such reviews where a tender for the carrying out of the whole or a part of a proposed work has been accepted. Since a tender need be accepted for only a portion of a work, whatever its value, it seems to us that this very greatly diminishes the value of the review which the bill otherwise permits the committee to make of a report which it has already submitted. The committee itself requested a general power to review reports which it had made. Certainly, on more than one occasion the Public Accounts Committee has made such a suggestion. In its fifth annual report of 25th August, 1953, the following statement was made -

This Committee ventures the opinion that the Parliamentary Standing Committee on Public Works should be able to take the initiative where it considers that the circumstances warrant a review of its recommendations. This review should be possible even though the construction of the particular project has commenced.

In the summary of its recommendations this passage occurs -

Consideration should be given to an amendment of the Commonwealth Public Works Committee Act 1913-1951 to permit that Committee to review its reports under special circumstances and to ensure that all major works are examined by the Public Works Committee.

There is no suggestion by the Public Works Committee, nor by the Public Accounts Committee, that this review should be limited by any acceptance of tenders for the whole or portion of a public work. We believe that there is real value in having an unfettered power of review. We believe that not only would such ineptitudes, inefficiencies or dishonesties as occurred in the laying of the foundations of the Administrative Building in Canberra have been avoided if the Public Works Committee had been able to supervise the Executive’s carrying out of the Parliament’s wishes, but also that the very fact that the committee was known to possess such a power would keep on their toes the Department of Works, the contractors, the architects and others, who were carrying out or supervising such a project.

We do not propose to move an amendment in this House, but we ask the Minister to reconsider this matter so that when the bill comes up in another place he will, we hope, be able himself to promote an amendment along the lines which we have suggested. It would still be possible for the Parliament to exclude such a review if it so decided, but we believe that it is Ian important principle that Parliament should be able not only to report on what public works should be carried out and on the manner in which they should be carried out, but also that it should be able to supervise and report upon the manner in which they are being carried out.

The committee’s value is not always adequately understood by the general public, nor, in fact, by members of the Parliament. The Public Works Committee, consisting, I think, of nine members of both Houses, has been in operation for nearly SO years, and the calculation has been made that the total cost of conducting the committee’s operations, including the payment of fares, expenses and fees, has averaged not more than £3,000 a year. In its early days the committee achieved quite a success in relation to the project for the Flinders Naval Base, when it suggested a source of water supply which had not been previously considered, and thus saved some £60,000 - quite an amount in those pre-World War I. days. There are some useful’ examples since the last war which can be mentioned. There was the proposal for the development of a £4,000,000 shale oil project at Baerami in New South Wales. If the project had gone ahead as originally proposed, a private company would have been permitted to make very large profits, and a very valuable source of shale oil would have been exhausted. The committee decided that, in the public interest, the supply of shale which could be quite vital in war-time, should be preserved for such an occasion.

Then there were the large Commonwealth offices which have been erected, or projected, in Brisbane and Perth. The original projects would have entailed Commonwealth expenditure on buildings which would have catered for only some Commonwealth departments and would have made no provision for the housing of other departments which were already in those cities and for still others which it was known would shortly be there. The committee considered these projects. As a result of its recommendations, no additional money was spent on the immediate projects, but also there was a prospective saving of a very great amount in the development of sites and the housing of other and new departments in those cities.

If I may make a more personal reference to the work of the committee, I recall that John Curtin enjoyed his first elected office in this Parliament as a member of the committee, and that not fewer than seven of the members of the Menzies Governments during the 1950’s cut their teeth on this committee. The tendency was reversed recently, when a former Minister for Works became the present chairman of the committee. I have no doubt that his talents are making the committee’s deliberations even more valuable. I do not think that any man in the Parliament, or in the committee, is so quick a speaker or so quick a thinker. Before I pass from the members of the committee, I feel that we should acknowledge that the members undertake quite an onerous job and that, as a result of this legislation, we shall see that they carry out a still more onerous job. I am sure that we shall all benefit from their deliberations.

There are two other matters which I feel I should mention in considering this bill. The first is: When is a public work not a public work? Apparently from time to time there have been proposals that public works carried out by the Commonwealth in its territories or overseas, or by its instrumentalities, should be reviewed by a committee, but, as far as I know, that has never been done. The question arises, therefore: Will Commonwealth public works in the territories or overseas, or being carried out for Commonwealth instrumentalities, hereafter automatically be considered by the committee if they are estimated to cost more than £250,000? Will they fail to be considered by the committee only if the Parliament excludes them from the committee’s consideration? I should like the Minister’s explanation.

I have mentioned public works overseas. One such undertaking, about which the Public Accounts Committee has made two references, is the projected Australian High Commissioner’s building in New Delhi. The committee’s sixth annual report of 7th September, 1953, recommended that the New Delhi project should be examined by the Parliamentary Standing Committee on Public Works. The committee’s sixteenth report, dated 20th October, 1954, stated-

The Department-

That is the Department of Works - reaffirmed its agreement to the reference of the project to the Parliamentary Standing Committee on Public Works for consideration, but pointed out that the decision to do so did not lie in its hands.

I think that is something which the Minister should explain. The department agreed, five and a half years ago, that the High Commission project for New Delhi should be referred to the Public Works Committee. My recollection is that it has always been the Minister for Works who has moved, in this House, that projects be referred to the committee, but the Minister has never so moved. It is true that the act permits any member of the House to move that a project be referred to the committee, but I am certain that no private member during the intervening period has moved in that way.

Why was not the High Commission project at New Delhi referred to the Public Works Committee for report? There are many other high commissions, embassies and humble legations which Australia is building overseas, some of which will cost more than £250,000. Some of them will have certain idiosyncrasies which will at least make it desirable for the committee, in the committee’s view, to consider them and report upon them.

There are other types of projects where a similar expenditure could be incurred. The estimated cost of many projects in the Territories will exceed £250,000. Are such projects automatically to go before the committee from now on, unless Parliament excludes them, first, if they are in the Northern Territory or the Australian Capital Territory and secondly, if they are in Papua or New Guinea? Thirdly, there are a great number of public works in the normal sense which are carried out by instrumentalities. As a result of recent banking legislation, which divides the Commonwealth Bank still further, there will be in all capital cities expenditure on new Reserve Bank premises amounting in all, it is estimated, to £14,000,000. I believe that the project in Sydney will account for at least £4,000,00. Is that a public work within the meaning of the act? Will it automatically go before the committee unless the Parliament excludes it from doing so?

There are a great number of other instrumentalities which carry out works involving an expenditure of more than £250,000. The Snowy Mountains Hydroelectric authority expends about £17,000,000 a year, but that is a type of authority whose operations the Parliament might well exclude from consideration by the committee. Parliament itself is regularly reviewing the operations of that authority. But suppose Qantas Empire Airways Limited builds a hotel. It will certainly cost more than £250,000. Will that be a public work within the meaning of the act? Will Parliament automatically have the power to review it through its committee or will Parliament have to exclude it from review by the committee?

I believe that the department hitherto has refrained from referring many works to the committee because of section 21 of the Acts Interpretation Act which states -

  1. references to localities jurisdictions and other matters and things shall be construed as references to such localities jurisdictions and other matters and things in and of the Commonwealth.

I apprehend that an embassy or a high commission may be a matter of the Commonwealth but not in it; that a public work in the Northern Territory may be a thing in and of the Commonwealth; but that a public work in Papua-New Guinea might be a public work of the Commonwealth but not in the Commonwealth.

The next point that arises is whether a work being carried out in Australia by an instrumentality is a thing of the Commonwealth. It certainly would be a thing in the Commonwealth. I am certain that the Minister for Immigration (Mr. Downer)) who is representing the honorable and learned Minister for Works will secure an explanation for us of this matter. It might have to come up every time the Commonwealth spends more than £250,000 in the Territories, through its instrumentalities, or in a foreign country.

The remaining point I want to make is that I should hope that some method will be devised by which the Commonwealth and its instrumentalities, the States and their instrumentalities, including local and regional governments, will devise a method by which their public works can be dovetailed and considered in co-operation. If one goes to any decent-sized country town one finds Commonwealth functions - the Commonwealth Employment Service, the Department of Social Services, the Post Office, the Commonwealth Electoral Office and the Commonwealth Bank. One also finds State functions - the Main Roads Department, in some cases the port authorities, the irrigation commission or river and water supply authorities, aboriginal welfare, forestry, agriculture, lands, police, justice, housing and the Rural Bank. One finds also in any decent-sized country town the council chambers of the municipality and the surrounding shires, the various county councils dealing with electricity and abattoirs and other indirect functions. And there are usually municipal and shire libraries.

My experience has been that all these functions - Commonwealth, State and local - are carried on in different premises, except police and justice, and I am not sure that that is the happiest grouping. It should be possible, in the interests of town planning, economy and public convenience to have these various public authorities housed in a civic or governmental centre in country towns and regional centres. By that method we would, I believe, enhance the status of country towns. We would also be promoting decentralization and bringing about a greater respect and understanding of the various functions which diverse governmental authorities in Australia carry on.

The Opposition supports the bill and hopes that the Minister will give some explanation of the points I have raised. It hopes also that in another place the committee’s powers to review reports will be further extended, as we believe the committee itself desires, and as the Public Accounts Committee has on more than one occasion recommended.


.- The Deputy Leader of the Opposition (Mr. Whitlam) has done a very good job selling this bill to the House with some suggestions of amendments to come. I shall comment on them in due course. As the House has been already informed, the Public Works Committee was appointed originally in 1913. In the words of Sir Joseph Cook, the committee was - set up because the method of conducting public works policy at that time was inadequate for securing the taxpayers against loss and waste.

At that time, expenditure was at the rate of £3,000,000 or £4,000,000 a year; nevertheless it was found necessary to put in the act a mandatory provision requiring the reference of all works to the Public Works Committee. In 1930, the slump was on and the committee was disbanded. When the bill to re-appoint the committee was re-introduced in 1936, an honorable member, who was speaking to it in the very early hours of the morning, said that the act was being amended by the omission of the mandatory provision. Nevertheless, the functions of the committee have remained those of ensuring that public works shall be adequate for the needs of the Government, that there shall be no overprovision, and that due care shall be taken of economy and the protection of the taxpayer against loss and waste - the idea which was the original inspiration of the committee. Twenty years have passed and committees of one kind or another have sought to have the act amended, particularly to have the mandatory clause reinstated.

I believe, and the present committee believes, that the responsibility of this Parliament in connexion with public works should be preserved inviolate. As the chairman of the last of a long line of Public Works

Committees which have sought to have the act amended, I do not want to be heard to complain, but I should like to mention that in this case the Government capitulated and made up its mind to amend the legislation rather too hastily for the good of such a measure. I had some sort of an appreciation that the Minister for Works (Mr. Freeth) proposed to discuss the amendments suggested, either with myself, as chairman of the committee, or with the committee. However, for some reason best known to the Minister, that discussion did not eventuate, and the result was that the committee was denied an opportunity to raise one or two rather important matters on which we see eye to eye with the Deputy Leader of the Opposition.

One of the questions left out was the question whether or not the committee should have a right to review works in the Territory of Papua and New Guinea. After all, the vote which supports works in that Territory is a vote of this Parliament, even though it is made as one item, and the detailed allocation and supervision of the expenditure of that amount is looked at by the Legislative Council of the Territory itself. The Deputy Leader of the Opposition has quoted section 21 of the Acts Interpretation Act. As the Public Works Committee Act stands, the committee is not entitled to look at such works unless they are in and of the Commonwealth. Certainly, works in the Territory of Papua and New Guinea will not be works in the Commonwealth, and, under the Papua and New Guinea Act 1949-1957, they are expressly excluded. Therefore, they are not even of the Commonwealth. Therefore, on those two counts, the Public Works Committee cannot at this stage engage in a review of public works of considerable magnitude, paid for by the taxpayers of this country but carried out in the Territory of Papua and New Guinea.

The committee does not seek to offend the Legislative Council of the Territory. We rather seek to assist that council and to protect the taxpayers. To the best of my knowledge, the Legislative Council has not appointed any public works committee of its own. Therefore, it might well be to the advantage of the Legislative Council if such public works were referred to the Public Works Committee, under suitable amendments of the act. The Legislative Council would then have the protection of an experienced committee.

If it is a good thing to provide under this amended act, as we propose to provide, that works in excess of £250,000 must necessarily be referred for the attention and report of the Public Works Committee, surely it would be equally good if expenditures of a like amount in the territories, expenditures made from a like source - from funds provided by the Australian taxpayer - were looked at by the committee. I have in mind at the moment a hospital in New Guinea which, I think, cost about £640,000. I believe that we would all have been a lot happier if this project had had to meet the requirements of the Public Works Committee - that is, that there was an established and proven need for a hospital of those dimensions, that what was proposed did not represent an overprovision, and that it was being provided in a way that protected the public against waste and loss, or, in other words, that the standard of work was adequate for the job in hand, but did not reflect, as it possibly could, the imagination of departmental officers who thought that nothing but the best was good enough for their administration.

The question of the committee having the oversight of public works in the field of external affairs comes under much the same category. It may be that the Department of External Affairs, as well as the taxpayers, would be glad to know that proposed works on embassies and legations, not in the Commonwealth, should be referred to the Public Works Committee. I rather hope that the Government will give this matter some consideration on policy grounds and be prepared to consider it, as the Deputy Leader of the Opposition has suggested, when the bill reaches another place and there is an opportunity to consider some further amendments.

I turn to another most important aspect of the Commonwealth works programme. In recent years, as I have some cause to know, about 40 per cent, of the Commonwealth’s public works programme is being absorbed here in Canberra, and at the present moment much of it, if not all, falls under the control of the National Capital

Development Commission. The White Paper for 1959-60, for instance, lists eight projects, ranging from £257,000 to £1,200,000- an average of £500,000 and a total of £4,000,000. In the past it has been customary to refer to the committee a considerable number of the projects being carried on in Canberra, but with the establishment of the National Capital Development Commission, there has been, perhaps reasonably, a tendency to plead urgency so as not to refer the projects to the Public Works Committee for consideration.

I would be the last one in the world to put brakes on the National Capital Development Commission in the conduct of the function which has been allocated to it, and which, in my view, it is doing very well. Nevertheless, when a commission of this kind is set up and given a rather unlimited charter, when it is endowed with about 40 per cent, of the whole Commonwealth works programme, there is just a possibility that it will develop what I shall call, for want of a better phrase, delusions of grandeur. There is a possibility that the commission will feel that, having been specifically set up to do a job of development in this important national capital and having been clothed with power under its own act, it does not operate in a political atmosphere and does not have the responsibility to the Parliament or to the people which this Parliament, I am certain, believes that it has. I hope there will be no tendency on the part of the commission to feel that it is completely free of an obligation to have its projects in Canberra referred to the Public Works Committee, and that there will be no attempt to remove public works in Canberra under the control of the National Capital Development Commission from the oversight of the Public Works Committee.

The main point about this bill is that the principles involved in it are completely sound. They provide that the need for public expenditure on public works shall be established beyond doubt, that the client department shall establish its requirements, that the Department of Works, as the Commonwealth’s constructing authority, shall bring forward its proposals to meet that need, and that they shall pass the test of adequacy and yet shall not overprovide. More particularly, they provide that all these projects shall be brought to the attention of this Parliament.

Because of the number of papers that have to be read by members of the Parliament in both Houses, and because of the attention that they have to give to other matters, it is very easy for even a major public work to slip by in a White Paper, and not attract attention at the time. It is not until the foundations are in or the building is half-completed that it is brought to the attention of the House and questions are asked, but much too late. It is a very good thing, therefore, that the new procedure will make it perfectly certain that no major project will escape the attention of the House. Projects will be referred to the committee and will be reported on in due course. The House will be required to exclude, by resolution, any major project from reference to the Public Works Committee. If the project is a defence work it will be excluded from reference by order of the GovernorGeneral in Council. Either way, however, the members of this Parliament will receive the signal that considerable expenditure of public moneys on public works is to be undertaken.

I turn now to the bill itself. It is generally a satisfactory measure. It has met the suggestions of the committee in nearly all major respects. I cannot go along with the suggestion of the Deputy Leader of the Opposition (Mr. Whitlam) that the committee should be endowed with the power to review projects, on its own initiative, once those works have been commenced. The bill provides that the Committee shall be entitled to review its own decisions up to the point of acceptance of a tender. That is a very good thing. History shows that quite a number of projects have been referred to the committee and reported upon, and that the reports have then been put on the shelf for a number of years. When the plans and specifications of a project are brought out and dusted off it is found that conditions have changed, there have been changes in cost structure, and it is felt desirable that the committee should have a second look at the project and make a supplementary recommendation to the Parliament. It is believed that if this is not done the committee’s function of guarding the public purse against waste cannot be fulfilled.

Once a contract has been entered into, however, it must be assumed that this has been done after the project has been reported on by the committee and approved by the Parliament, and if the committee is going to be empowered to become a watchdog on the progress of a project, an entirely new function is to be given to it. I feel, too, that the placing of a watchdog over the Department of Works would constitute a tacit vote of no confidence in that department. Having had one term of office as Minister for Works, and having delved pretty deeply into the functioning of that department, I for one would give it a pretty clean bill of health. I certainly would not ask that the Public Works Committee should be empowered to look into projects once contracts have been entered into and the works have been commenced.

What I have said in this connexion has not touched upon the difficulties into which I believe that committee might well be led - and, in turn, the Government - if the committee were to look into projects after contracts had been arranged. Obvious difficulties would arise in that kind of situation, which I am sure the Government would want to avoid.

The House has complete discretionary power to refer any work, even one estimated to cost less than the statutory amount of £250,000. This involves a new method of bringing such works to the public attention, and I hope the Minister will not be backward in referring projects of this kind.

I say again that the importance of this measure is that works about to be commenced will be brought to the notice of the House. Of greater importance, I think, is the fact that the provisions are mandatory, and they extend the protection given to the public purse in this matter. I mentioned a moment ago that quite a number of projects had been started on a motion of urgency. The plea is made, “The job is urgent and we cannot stand the delay entailed in referring it to the Public Works Committee “. In this connexion let me say that if consideration is given to the record of the Public Works Committee, it will be found that there has seldom been any delay. The committee has always handled references expeditiously. One of the main reasons for not referring works to the Public Works Committee is that client departments plead urgency when in fact they themselves are responsible for the delay in bringing the projects to the point of tender. I have some rather tender memories of this kind of situation, and I do not blame the Minister for Works at all when he finds that works have to go to tender and construction without having been looked at by the Public Works Committee. There is a great tendency - and I suppose it is understandable - for -client departments to delay decisions on their particular requirements. It is difficult for them to get down on paper precisely what facilities they want in a specific public work, and long periods elapse before they make up their minds and pass the matter to the Department of Works for the preparation of sketch plans and drawings. The client department having wasted a good deal of time, the urgency is then felt in the Department of Works, which tries to speed up the project. If the Minister for Works has to listen to an urgency plea, he will have little option but to put the work in hand without reference to the Public Works Committee. I make no bones about saying that it will be a good thing if the client departments have to smarten themselves up a little in regard to the submission of their orders to the Department of Works.

The Leader of the Opposition went on to suggest that it would be a good thing if the Department of Public Works exerted some influence towards the amalgamation of government functions in what might be called government administrative centres. In essence this is not a bad thing, but there are considerations which sometimes prevent its being done. The committee will shortly have before it a proposal to build a new Customs House in Melbourne. Every one will recall this matter, because it has been one of some considerable interest in the Parliament. The Commonwealth has a very extensive site in Spring-street, Melbourne, and I would have thought - and I still do - that the cheapest and quickest way to provide a new building for the Department of Customs and Excise would have been to add a new block on the Springstreet site. However, one cannot go beyond the evidence tendered to the Public Works Committee in Melbourne, which showed very clearly that public interest and public convenience would be best served if a new

Customs House were built very close to the present site. Accordingly, I understand, the Commonwealth has purchased a site, and although I do not want to anticipate the committee’s findings, I am sure that the committee, being a responsible body, will have regard to the decision of an earlier committee, to the effect that the new building should be constructed on the other side of Melbourne. Therefore, while the suggestions put forward by the Deputy Leader of the Opposition are sound in principle, they cannot, in fact, always be carried out.

Nevertheless, the Deputy Leader of the Opposition can be assured that such matters will always be exhaustively studied by the committee, which will be out to serve the public interest in every way, having regard both to the convenience of those who must deal with Government departments in the buildings that are to be constructed, and also to the tenderness of the hip pocket nerves of the taxpayers.

The Deputy Leader of the Opposition has been good enough to refer to the fact that over the many years of its operation the committee has worked on a most economical basis. It has cost, on the average, something under £3,000 a year, and when one has regard to the undoubted savings which have resulted from its inquiries and recommendations, to say nothing of the better service and improved facilities which I believe it has been responsible for - although not in all cases, because these buildings are usually competently planned - it will be seen that the public’s investment in its Public Works Committee has been very sound and has paid extraordinarily high dividends.

When this bill is .passed -by the Parliament, as I am sure it will be, there will be an increasing burden of responsibility on the Public Works Committee, and a considerably greater number of references will be made. It may well be that, in the course of a year, fifteen or twenty references will be made to the committee. They will call for a concentration on hearing suitable and adequate evidence and a determination not to let these inquiries .get .beyond reasonable bounds. That, of course, will be a responsibility imposed upon the committee. But it is composed :of men who have had long years of experience on the committee or in related activities, and I believe that the committee is quite capable of giving a good deal of satisfaction to this House.

Apart from the matters which I have mentioned, and the possibility that when the bill is debated in another place the Government will consider the policy matters that I have raised and acquiesce in the suggestion that the bill be amended in order further to widen the powers of the committee, I commend this measure to the House as a very workable piece of legislation.

Debate (on motion by Mr. Bird) adjourned.

page 699


Japanese Child Migration

Motion (by Mr. Downer) proposed -

That the House do now adjourn.


.- Mr. Speaker, earlier to-day, the Minister for Immigration (Mr. Downer), who, I am glad to see, is now at the table, made some reference to a problem which is giving great concern to the Australian people. It concerns the remnants - or the descendants, let us say - of Australian servicemen in Japan. I was rather disappointed to hear the remarks made by the Minister, who is himself a very fine humanitarian. One may say that of one’s political enemies, I hope. I think that the Minister entirely missed the beat of humanity in this regard. This matter has nothing to do with forays of servicemen in World War II, in World War I., in the Crimean War or in any other war. To-day, we are faced with a problem which has to be dealt with. It has been dealt with by other communities including the one whose example I really want to cite and explain to the House. There is a body of opinion in the Australian community which thinks that we are besmirched throughout the world by our inability to grasp the essential nature of this problem and do something about it, and to see that justice is done to young children, without being so racial about it.

As was indicated by the Minister’s answer to a question to-day, the problem is: What is to be done with these descendants of -servicemen who served in Kure and the southern parts of Japan - these children who are alleged to be the sons and daughters of men who served in the British

Commonwealth Occupation Forces, commonly known as B.C.O.F., and in the Japanese theatre of war. To the satisfaction of churchmen, of the gentleman who went to Japan on behalf of the New South Wales Benevolent Society and of others, it is fairly well established that there are certain young boys and girls of about twelve or thirteen years of age who are living in dire and abject poverty against which the Australian half of the body and soul of each child surely rebels, and that they are left there in that sort of suspended limbo because we have neither the wit, the imagination nor the elemental charity to do something for them. It is not a question of being sentimental. It is a matter of just being tidy. I suggest, Sir, that we take another look at this matter, because the Minister said, in effect, that he was not going to do anything about it, as it had necessary implications of another nature.

The example of which I wish to tell the House does not relate to an isolated case in World War II. It came to my notice particularly when I made an immigration survey for the present Leader of the Opposion (Mr. Calwell), who was at the time Minister for Immigration. The committee of which I was a member went to Norway and encountered there a situation that had developed as a result of the invasion of the inhospitable icy tundra wasteland of northern Norway, where Hitler’s forces had been billeted at every little farm house. The outcome was a big problem in relation to illegitimate children. We went to investigate this aspect of immigration and of human suffering. In a big home on the outskirts of Oslo was an establishment by the name of “ Gardemorn “, or the House of Good Hope. In that home were not only the children but also the Norwegian mothers who were grappling with this problem of German fathers, illegitimacy, the smear of war and the stain left by the Nazis on their innocent victims.

After some consideration of the matter, the Norwegian Government, with great courage, decided that it would not have the sympathy of the world bestowed willynilly on these unfortunate children and that it would not allow a sort of half-developed conscience to grow up in the Norwegian community. The government faced the situation squarely and, by act of Parliament, legitimized the children in this home.

Norway’s problem was easier of solution than ours is, but only because our problem has been allowed to wait for so long unsolved.

The Norwegian Government gave these children, not German nationality, but Norwegian nationality. So far as it could, by act of parliament it ensured a better fate for these young kiddies. When an appeal was made later that they be taken to America, where they would perhaps be better off, and where they could be adopted in order that their birth stain could be eliminated, the then Prime Minister of Norway said, “ What utter nonsense! They are Norwegians. They will remain in this country, and if the Norwegians have not enough imagination and humanity to absorb them into the community, my action in making them legitimate and attending to the welfare of their mothers has been of no avail.” But it was not unavailing. These children have long since disappeared into the community and are probably treasured adopted children of Norwegians who are bringing them up. They are now growing up to be young men and women, and their problem has been solved by humanity allied with common sense and imagination.

It is foolish for us to think that there is nothing except a sort of side issue in relation to these children in Japan. There is considerable anxiety because they are in part of the Australian breed. We have a wide immigration scheme which will permit us to bring in almost anybody provided that he is 51 per cent, white, and we can stretch our immigration laws and our humanity in order to provide for these unfortunate people. I appreciate the Minister’s problem of finding out who is who, but we must not be extremely fussy about that. This is a situation which faces the Australian people. It is an insult to our integrity and our forthrightness, and we feel sadness because there are groups of youngsters who are short of food when this country abounds with food and good living. These are the victims of war as assuredly as are those who have been killed in action or who, in other ways, have fallen victims of war.

So what do we do about the problem? Do we come out at once on this matter as the honorable member for Wilmot (Mr.

Duthie) has done so often in this House, and as do the clergymen, humanitarians, welfare workers and others? They do not see this as a racial or immigration problem. They see its solution as a piece of tidying up after the war. I should be most grateful to the Minister if he would look at the matter sympathetically in view of what other countries have done. The example of Norway is so clear. It is so outstandingly decent. It is so adult. What Norway has done is so completely the decent thing to do that I recommend to the Minister that he take on his shoulders the repatriation of the sons and daughters of Australian servicemen who are caught in these peculiarly horrible circumstances, and who are always the subject of pictures in this sensational press, of long and painful articles in the reviews, and, sometimes, of painful discussion in this House.

Believe me, I, with all the other members of this House, feel sincerely about this matter. Somebody else may quite sincerely hold a completely contrary view. But I press my case with the Minister in this matter. This little, ugly incident can be tidied up. It may have been only an incident of war if it were not for the circumstances of these children living in Japan - in an Asian country where all the circumstances surrounding food, training, religion and everything else have such a different slant. Somewhere in their cosmic make-up, in their genes, in their Australianism which has been transmitted to them through their fathers, they must feel a tug towards their homeland. We at least ought to be able to bridge the gap by the exercise of a little imagination in this place.

Minister for Immigration · Angas · LP

– in reply - I did not know that the honorable member for Parkes (Mr. Haylen) intended to raise this subject to-night, but before the House adjourns 1 should like to make one or two observations in reply to what he has said. I think all of us will agree that this is a sad social problem. One always deplores the aftermath of a great war in whatever form it takes. But, having said that, I must say that I think the House would be very foolish to run away with the idea that there is anything new in the particular circumstances of these illegitimate children in Japan. In fact, Mr. Speaker, what the honorable member has brought forth is one of the oldest problems in the world. This legacy from war has been known in every part of the world where wars have been fought and where occupation forces have remained in conquered countries. As I said this afternoon, if the Government decided to let in a not inconsiderable number of illegitimate Japanese children, it would enunciate a new principle altogether, not merely in international relations, but certainly in the immigration policies that have hitherto been accepted by all sides of politics since the federation of this country.

Mr Duthie:

– You said that only 51 were involved.


– I said also that there was a not inconsiderable number, and I think the honorable gentleman would agree with me that that description covers the total 51.

Furthermore, the children such as they are cannot be looked at in isolation. It is very short-sighted indeed to think that the problem can be resolved simply in those terms. Let us remember, Sir, that these children are now growing up; they were not born yesterday. The great majority of them would be described in popular parlance as teenagers. They have known no other country but Japan; they have been brought up entirely in the Japanese life and in the Japanese idiom. So I put two questions to honorable members. First, should we separate them from what, to all intents and purposes, as far as they know, is their own country in which they speak their own national language, which is Japanese? Secondly, if honorable members give an affirmative answer to that question - I give a very firm negative to it - they should also ask themselves whether it would not be cruel to separate these teenagers from their Japanese mothers and bring them here, for the reasons that my friend from Parkes has tried to give to the House to-night. In effect, a bid for the children is a bid for the mothers, and by the time the whole operation were carried out, quite a small colony of Japanese migrants would be coming into this country. I say without hesitation and without qualification that, as long as I am Minister, that will not happen.

During the course of his arguments, the honorable member for Parkes referred, by attempted analogy, to what the Norwegian Government did with the problem of illegitimate children from Norwegians and

Germans. I- suggest that that argument cannot Be pressed very far because, although on the- one hand, the Norwegian Government adopted a- humanitarian outlook; surely all of? us must agree that* it is infinitely simpler to- give nationality and hospitality, if you like; to illegitimate children of parents who are separated by the narrow waters of’ the Baltic and who are not of dissimilar stock but are both northern Europeans, than to ask a country such as this, with its historic immigration- policy, to adopt the same principles with people who are substantially of Asian origin. My friend uses exciting, words and refers to the emotions that these children are supposed to have in their genes, and to other fascinating sociological theories. But those theories do not hold water- and will not take us very far.

I conclude by saying that in 1956, the Immigration Advisory Council, which is, as honorable members for Parkes knows, drawn from people from all walks of the community and on which both sides of the Parliament are represented, went into this matter very carefully and put forward a recommendation which has been the Government’s policy since that time. The furthest the council would go was to recommend the adoption of these illegitimate, children, and their entry into Australia,, only by Australian foster parents who had. been resident in Japan and in whose care these children had been for a considerable time. I think the House would agree that those cases are. very few and far between. If we have instances which fit the recommendation of the. council, the Government will consider them sympathetically. But I will not deceive the House, I will not. equivocate; the. answer I gave this afternoon and what I” have said to-night represent the Government’s policy, and we intend to stick by it.

Question resolved in the affirmative.

page 702



The following answers to questions- were circulated: -


What- commission do the private- banks receive for- acting- as agents for- the new Commonwealth

Development Bank: constituted under: the: recent Menzies banking legislation?

The- Managing Director of the Commonwealth Banking Corporation has furnished the following information in reply to the honorable member’s question: - “ The major private banks’ have been appointed agents of the Commonwealth Development Bank of Australia for the receipt and transmission of applications for the provision, of finance by the Development Bank in terms of section 83 of the Commonwealth Banks Act 1959. The Development Bank pays no commission to agent banks for the receipt and transmission of applications: on the general ground that banks carrying out this work are in the main acting in the interest of their own customers. However, if agent banks are requested by the Development Bank to perform other work, such as the inspection and valuation of properties offered as security, an appropriate reimbursement’ to the agent bank is made.

Rail Transport

  1. What is the capital indebtedness of each of the State railway systems?
  2. What is the annual amount of interest payable on loan money in respect of these systems?
  3. What percentage of total railway earnings does this interest represent?
  1. Figures of the capital indebtedness of the State railway systems are- not- available on a uniform basis for all States. The aggregate net loan expenditure on railways by each State to 30th June, 1959,. was-
  1. ,. (c) The answers to (b) and (c) are given in- the following- table: -
  1. Excludes Government Grants.
  2. Includes exchange borne by Railway Departments. Excludes interest paid by State Treasuries which is not charged against Railways revenue.
  3. Includes particulars for the New South Wales portion of the uniform gauge railway from Grafton to South Brisbane.
  4. Includes particulars for the Queensland portion of the uniform gauge railway.


  1. Is the cost of commercial advertising an allowable deduction for taxation purposes?
  2. Is there any limit to the amount allowable; if so, what are the details?
  1. Expenditure on commercial advertising is deductible for income tax purposes to the extent that it is incurred in gaining or producing assessable income or is necessarily incurred in carrying on a business for the purpose of producing that income and is not of a capital, private or domestic nature.
  2. The deductions are limited to amounts satisfying the tests mentioned in (1).
  1. Are legal costs incurred by newspaper companies or proprietors in defending libel actions an allowable deduction for taxation purposes?
  2. Is there any limit to the amount allowable; if so, what are the details?
  1. Legal costs incurred by publishers of newspapers in defending legal actions for libel arising out of the publication of their newspapers are deductible to the extent that they are not expenditures of a capital, private or domestic nature. The allowance of deductions on the basis outlined has been confirmed by the High Court of Australia.
  2. The deductions are limited to amounts satisfying the tests mentioned in (1).
  1. Are entertainment expenses associated with the conduct of a business, such as the cost of dinners, drinks, theatre tickets, &c, an allowable deduction for taxation purposes?
  2. If so, is there any limit to the amount which may be claimed under this heading?
  1. Entertainment expenses are allowable deductions for income tax purposes to the extent to which they are incurred in gaining or producing assessable income or are necessarily incurred in carrying on a business for that purpose. A deduction would not, however, be allowed in relation to expenses of a capital, private or domestic nature.
  2. The deductions are limited to amounts satisfying the tests set out in (1).

Canberra Mental Patients

  1. Is there a mental institution in Canberra or within the Australian Capital Territory?
  2. If not, where are mental patients from the Territory hospitalized?
  3. Do patients meet their own costs while they are inmates of a mental institution or are they met by their dependants or their estates?
  4. What is the weekly charge for the maintenance of a patient?
  5. Does the Government contribute towards the cost of maintaining a patient confined to a mental hospital?
  6. How many residents of the Australian Capital Territory are inmates of a mental institution?
  7. What are the age groups of these persons?
  8. What process of law can be applied to recover unpaid fees for the maintenance of mental patients?
  1. No.
  2. In institutions in New South Wales.
  3. Each case is considered on its merits. If no hardship to the patient or his dependants is entailed, all or part of the cost of maintenance may be recovered from the patient or, in the event of his death, from his estate. No claim is made against dependants.
  4. The actual cost of maintenance in the particular institution in which the patient is being treated. (In general about £8 per week.)
  5. Yes.
  6. Approximately 50.
  7. Patients are in varying age groups.
  8. The cost of maintenance may be recovered from the property of a patient, and if this is insufficient, an order may be obtained requiring the close relatives who could normally be expected to be responsible for the patient to contribute to his or her maintenance. These remedies are not pursued to the full.

Patent Rights

  1. Is a patents agent or patents adviser entitled to claim payment from an inventor for whom he acts unsuccessfully in an endeavour to sell certain patent rights?
  2. Have any cases of claims of this nature being made been referred to him?
  1. Insofar as the question seeks a legal opinion, I refer the honorable member to Standing Order 144. Insofar as it refers to a provision of a Commonwealth Statute, the Patents Act 1952-1955, I would inform the honorable member that that act does not deal with the matter he mentions, leaving it to the bargain of the parties.
  2. No.

House adjourned at 10.47 p.m.

Cite as: Australia, House of Representatives, Debates, 29 March 1960, viewed 22 October 2017, <>.