House of Representatives
3 May 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 direct a question without notice to the Attorney-General. Can he inform the .House of the number of takeovers in commerce and industry in Australia during the past two years? If so, will the Minister make this information available to the Parliament, giving the names of the organizations concerned, the capital involved and other relevant details? Is it a fact that the practice of takeovers has resulted in the growth of monopoly control in Australia to the detriment of the community? Will the Minister also state whether it is his intention to recommend to the Government that restrictions be placed on .the practice of take-overs in the legislation which is said to be under consideration with regard to the control of monopolies?


– My department will certainly -have no information on the number of take-overs that have taken place, and I am not in a . position to inform the honorable member on that matter. Insofar as take-overs might tend to bring about monopoly control, no doubt this aspect of the whole .problem will be looked at in due course. As to what is to be done, that is very much a matter of policy.

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– I wish to ask a question of the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Can the Minister inform the House how successful the organization’s rain-making experiments have been? Is it possible to raise the average rainfall in different areas? If so, would this apply 1o all parts of Australia? Have the experiments shown “that rain making is both practical and economic?

Dr Donald Cameron:

– The C.S.I.R.O. has been conducting rain-making experiments now for about five years. They have met with varying success in different places. This is because they cannot be successful, of course, unless the right type of cloud present. Every one will understand that the presence of such clouds is a pre-requisite of any successful result from the experiments. If the right type of cloud is present under the right circumstances, and it can be seeded with silver iodide, which is the material used, in certain circumstances the fall of rain from the cloud can be improved. The honorable gentleman, I am sure, will appreciate the fact that the cloud has to be, as it were, caught at the right time. The fact that it is seeded in one area does not mean that rain will fall in that area. It might not fall until wind has driven the cloud elsewhere or it has encountered hills and been forced up into a cold atmosphere. This is not to be regarded as a method of readily producing rain whenever and wherever it is required. Experiments have been conducted in five different areas. While there may be a little discrepancy in the figures for the exact percentage increase, there seems to be no doubt that promising results have been obtained in the Snowy Mountains area. In South Australia, on “the other hand, north of Adelaide, the experiments were quite unsuccessful and have now been abandoned. Other experiments are being carried out over the Darling Downs in Queensland where the right type of cloud fairly often occurs, but -so far it is too early to :speaK of any definite results from those areas. In the Warragamba Dam area in New South Wales it is hoped that some addition to the water stored in the dam may be made, but no one could imagine, nor do T believe for ‘a moment that any officer of -the ‘Commonwealth ‘Scientific and Industrial Research Organization intended to suggest, that we have, here at hand, a ready method of producing rain whenever it is needed. In fact, that is not so. The honorable gentleman’s other question concerned the economics of the method. It should not be thought that this is a proceeding which can be carried out at small cost.

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Mr J R Fraser:

– Will the Minister for the Interior have an examination made of the conditions under which land leases are granted for business purposes in the Canberra city area in order to ascertain whether practices permissible under those conditions can negate the whole principle of leasehold tenure in the Australian Capital Territory? In particular, will the Minister ascertain whether the relevant regulations permit head lessors to take vast unearned profits from leaseholds by demanding and accepting very substantial payments as premiums or key money from prospective tenants of buildings on such leases?

Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– I will examine the situation. The department is aware that there is a shortage of business premises which has had a tendency to force up rents and make business premises difficult to obtain. In general, it is not desirable to have stringent rent control in these cases. I think that the solution probably lies in making more business premises available, but I will have the position examined.

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– Is the Attorney-General conferring with the Commonwealth Scientific and Industrial Research Organization on rain making with a view to overcoming the legal difficulties involved in changing rain from an act of God to an act of man and solving such problems as the rightful ownership of the clouds to be seeded?


– I can inform the honorable member that my department is not engaged in any such activity. Nor is it endeavouring to see whether it can make tears flow more easily.

Mr Allan Fraser:

– I wish to ask the Minister for Health a question which is supplementary to that asked by the member of the clan from Wannon. Is the Minister aware that the Snowy Mountains Hydro-electric Authority does not share the optimism which was shown in the announcement by the Commonwealth Scientific and Industrial Research Organization about the result of the rain-making experiment in the Snowy Mountains area? Is it a fact that the authority and the C.S.I.R.O. obtained the services of an independent expert from abroad to evaluate the result of the rainmaking experiments in that area, and that his report has come down on the side of the Snowy Mountains Authority by stating, in effect, that the experiments have not been as pronouncedly successful as the C.S.I.R.O. report would indicate?

Dr Donald Cameron:

– I must point out to the honorable gentleman that the Commonwealth Scientific and Industrial Research Organization did not in fact issue a statement on this matter. When the chairman of the organization was leaving Australia he was asked by a reporter, almost as he ascended the gangway of the plane, for some statement about the matter; and as this was purely an oral statement I cannot be quite certain of what he did in fact say. So I think the first thing to realize is that there may be no conflict of authority at all. It is true, as the honorable gentleman said, that an independent authority was asked to assess the actual claims made; or perhaps it would be more accurate to say that he was asked to assess what claims could be made. So far as I know the final answer has not yet been given.

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– My question is directed to the Minister for the Interior. As the schools in the Australian Capital Territory are staffed by New South Wales teachers, would it be possible to arrange for the exchange of numerous male teachers from Victoria, South Australia and Western Australia so that children in this national capital could be instructed in the rudiments of the Australian national game of football instead of, as now, having their time devoted to playing imported types of football?


– I can understand the interest of the honorable member for Perth in this very vexed subject. However, there are two matters which I would like to point out to him. First of all, no restrictions whatever are placed by the Commonwealth Government on the type of football or any other game taught in Australian Capital Territory schools. Secondly, the teaching staffs of schools in the Territory are supplied by arrangement with the New South Wales Department of Education. It always amazes me that those who are so fanatically devoted to the Australian national game are not content to let it rely on its merits to succeed but try to use other methods and propaganda to have it adopted in places where it is not already played.

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– My question is directed to the Attorney-General in his capacity as

Acting Minister for External Affairs. As he may recall, I addressed a question to him last week concerning the future of the wreck of H.M.A.S. “Perth”, and at that time he was not able to say for certain whether it would be left undisturbed in Sunda Strait. The Minister was awaiting certain communications. Is he now in a position to give me the assurance that I sought on that occasion?


– It is true, as the honorable gentleman said, that on the occasion when I last answered him I had inquiries on foot, on a governmenttogovernment level, to ascertain what were the facts and what was contemplated with respect to H.M.A.S. “ Perth “. I am now very pleased to be in a position to inform the honorable gentleman and other members of the House that after consultation with the Government of Indonesia and the Government of Japan there is definitely no proposal to touch H.M.A.S. “Perth”. I may say that in the course of these inquiries we have ascertained that whilst there was a proposal to have a survey made of wrecks to a considerable number around the Indonesian coast - that survey to be carried out, I understand, by Japanese nationals - at no time was H.M.A.S. “ Perth “ included in that survey. I can also say that it has now been confirmed, after these inquiries and consultations, that H.M.A.S. “ Perth “ lies in very deep water. It is not a danger to navigation and is not likely in the future to cause any hazard. I am sure honorable members will be glad that I can say a f>ain what T said on the last occasion. We are very pleased that H.M.A.S. “ Perth “ anr) its gallant crew will remain undisturbed.

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– Can the Minister for Supply say whether, in view of the decision of the British Government to discontinue the development of the Blue Streak as a missile, the peculiar advantages of the Woomera rocket range for the testing of anti-missile missiles have been brought to the attention of the United States Government? Can he say also whether the United States is, or could be, interested in Woomera for testing the missile warning systems which, I understand, are being developed there?

Minister for Supply · PETRIE, QUEENSLAND · LP

– I should say that the United States of America is fully aware of the facilities and advantages which are available at Woomera for the testing of weapons and anti-missile missiles. Some time ago the United States Government did, in fact, install at Woomera certain tracking facilities, and quite frequently there are visits by American scientists to the Woomera rocket range. Conversely, quite a number of visits are made to the United States by scientists of my department. As to the latter part of the question, I shall be very pleased to consult with my colleague, the Minister for Defence, to see whether anything can be done along the lines suggested.

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– Does the Treasurer remember that a few years ago the Government had a private conference with representatives of the financial institutions and private banks interested in hire purchase, for the purpose of reducing the operations of those organizations and curbing their rapacity? Is he aware that since that date the operations of the organizations have expanded by over £100,000,000, that Associated Securities Limited has just declared a profit of over 37 per cent., and that in that organization are interested the Bank of Scotland and the associated banks? Will the Government take some action, other than by making pious suggestions at conferences, to curb the rapacity and the operations of these big financial interests?


– I was not present at that conference, nor was I holding my present portfolio at the time when the discussions to which the honorable member has made reference occurred. Therefore, I cannot draw on any recollection to inform his mind. I know that quite frequently there come from honorable members opposite criticisms of the way in which hire-purchase undertakings conduct themselves in this country. As to the scale of hire-purchase operations, I can only say that they have not reached proportions which cause concern to the Government. On the contrary, I believe that hire purchase has enabled many Australian families to secure the use of durable consumer goods which otherwise it would have been beyond their ability to obtain.. I have never found’ it easy to understand those, who, argue- that the best type of citizen is he who, over a period of years, pays for his own home, but thatit is rather a wicked thing for. a person who purchases a refrigerator, a washing machine, or a television set to pay for it. over a period of years.

I believe this to be a quite competitive area of economic, activity. If the profits are of the inordinate dimensions to which the honorable member refers, it is rather surprising that some of the industrial organizations with which he is closely associated - by affinity, if not by actual link - and which have considerable financial resources at their disposal, do not enter this field themselves in order to provide a cheaper and better service for their members. That opportunity exists, and- it would be very interesting to see whether they could provide funds at interest rates which, would be. not only lower- than those which exist but as low as that which Mr. Chifley, when Prime Minister, by his endorsement of a report, regarded as reasonable in the circumstances.

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– My question to the Minister for Trade relates to. the recent Osaka trade fair, and I ask it because we realize that Japan is one of. Australia’s major customers. Can the Minister say whether the Australian pavilion at this fair was a success?

Minister for Trade · MURRAY, VICTORIA · CP

– The Australian pavilion at the Osaka trade fair embraced the biggest trade display that Australia has ever turned on in any Asiatic country. At this big but congested trade fair, the pavilion covered an area of some 5,000 square feet, and it received very good publicity throughout Japan in newspapers and. on television and radio. We feel that the objective whichwas aimed at by the Department of Trade, and those who worked with it, was substantially achieved. We had a very colourful exhibit which told the story of the production and availability of wool, sugar, wheat, barley, meat, butter, cheese, dried fruits, coal, metals, timber, leather and hides - a whole array of those Australian products for which there is or may be a market in Japan. Naturally, the largest display featured wool. We think that the pavilion was very successful.

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– My question is directed to the Minister for Health. About a. month ago, the Minister informed me that a gentleman’s agreement had been arrived at between the Commonwealth and State governments to the effect that if the Commonwealth paid. 12s. a day to hospitals for the treatment of pensioners, particularly those with entitlement cards, no charge would be made by the hospitals. Is the Minister aware that in South Australia that gentleman’s agreement has been broken by the State Government since 1st February because it is- levying a charge” of £3 a day on patients in the public- wards of hospitals, including pensioners who have entitlement cards, and has- even refused to reduce the charge below 10s. a day to pensioners who have no income apart from the pension? If the Minister is -not aware of this, will he now take up the matter with the Government of ‘ South Australia to see whether the gentleman’s agreement could not be honoured in respect of the pensioners to whom I have referred?

Dr Donald Cameron:

– I do not know that it is correct to talk about a breach of an agreement’ because, as I hoped I had’ indicated previously to the honorable member, there was no formal agreement which can now be spoken of as being broken. What a State government does in relation to charges in its public hospitals is entirely its own business. Perhaps I may have misled the honorable gentleman in my reply to his previous question. If I did so, I am sorry. I think he. asked me whether any discrimination was made between pensioners with entitlement cards and social service pensioners in general. In fact, there is, because the State governments find it impossible always to distinguish between those pensioners who have cards and those who have not. But what means test a State government applies to the patients in its own hospitals, and what charge it makes as a consequence, are its own business, and the Commonwealth Government has no standing in those matters.

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– Has the Acting Prime Minister been acquainted of the interpretation placed by the Premier of Tasmania- on1 the Commonwealth’s termsfor the granting of flood 1 assistance to that State, particularly in relation to the replacement of structures? If so, is the Premier’s interpretation- in line -with that of the Commonwealth? Is it a fact that subscribers who lost their telephones in the recent flood may be required to bear the cost of replacement? If so, will the Acting Prime Minister consult with his colleague, the PostmasterGeneral, with a view to covering this cost as part of the Commonwealth’s contribution to flood relief?

Mi-. McEWEN. - On the latter point, that is, the Post Office issue, which- I recognize- as a matter of considerable urgency to the people concerned; I will takean early occasion to consult with my colleague, the- Postmaster-General, who will be in Canberra,-. I think, a little later this afternoon’- or this- evening.

In regard to the broader matter, my attention has been drawn to a statement attributed to the Premier of Tasmania. It appears to be, in a measure, critical of the Commonwealth’s proffered aid in respect of the re-establishment of public structures - roads, bridges- and the like. From what I read, the Premier would make it appear that if the Commonwealth is not willing to contribute £1 for £1 in re-establishing a new and much better1 structure,- then theCommonwealth must be regarded as being mean in its approach to- this matter. The approach of the Commonwealth is one that has evolved over many years of experience of the Commonwealth being called upon to aid States and municipal interests when they have suffered in this particular field from disasters. As I have indicated, the Commonwealth is prepared to contribute £1 for £1 to the re-establishment, to a comparative value, of the public utility which has been lost or damaged, and I can say that the Commonwealth will not be parsimonious in its approach to that offer.

But it would not be unnatural - indeed it would perhaps be prudent - for the States or the municipalities to approach the Commonwealth for help when - in a hypothetical case; which- 1’ used: to illustrate the point - an old bridge had been washed away which might, conceivably, in the not-distant future be due for replacement by something quite modern and. much more adequate. For the Commonwealth to contribute £1 for £1 - fifty-fifty - to the cost of its replacement would surely be. to put it in a position out of which the. State government or a municipality would profit from -the disaster. The public of Australia would not expect the Commonwealth to place itself in that position. But I repeat that the Commonwealth will genuinely and not parsimoniously make a contribution on the basis of £l,for,£J towards the value of reestablishing an asset which was destroyed or damaged..

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– In view of the Prime Minister’s announcement of his interest in the welfare.- and: the. employment of crippled citizens; will the Treasurer, in the forthcoming Budget, give special consideration to the abolition of sales tax on motor cars purchased by crippled’ citizens who require and actually use their vehicles as their means of transport to and from their employment? Where such a citizen is obliged, by the nature of his injuiries, to attend a hospital for the purpose of receiving physiotherapy treatment and is unable to use public transport- and is not compensated by any form of compulsory insurance, will the. Minister consider making such travel costs an allowable income tax deduction in the same manner as medical expenses?


– T have been examining with a good deal of interest and, I hope, sympathetic attention, the matter which the honorable gentleman has raised. Some time ago, in Sydney, I received a deputation at which the arguments in favour of the removal of sales tax as it affects incapacitated people of the kind mentioned were presented to me by that very remarkable couple, Mr. and Mrs. Bedwin, both of whom have been afflicted in this way, and both of whom have demonstrated a courage and a cheerfulness of spirit that should be an inspiration to all of us. I repeat the assurance that this matter will be carefully examined prior to the preparation of the next Commonwealth Budget. I go on to- say, however, that the matter is by no means free from complexity or difficulty. Indeed, since publicity has been accorded the efforts to secure some relief in this direction, 1 have had requests from spokesmen for groups representing other afflicted people who have physical difficulties in connexion with transport, and the fact has brought home to me that the problem is by no means simple. I can say that every consideration will be given to the case which has been put forward.

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Mv. HAMILTON. - I address a question to the Attorney-General supplementary to that asked by the honorable member for Kalgoorlie. Can Minister say what would be the Commonwealth’s liability in the event of the rain-making experts of the Commonwealth Scientific and Industrial Research Organization causing a deluge to fall in the area of the Lachlan and the Darling rivers and in consequence causing the Murray River to flood, with resultant material damage to the State of South Australia? I ask this question in view of the constitutional legal doubt about the establishment of the C.S.I.R.O. If there is any legal doubt about this matter, would it not be a good subject for an early approach to the people so that this wonderful organization could be placed in a very secure position constitutionally?



Speaker, as a rule the law exercises itself with respect to practicalities. I think that the honorable member’s question would be a very good question for a moot for students, who might find the answer. I can inform the honorable member, however, that on one occasion, in one of the Low Countries of Europe, a farmer brought an action against a clergyman because the clergyman had undertaken to pray for rain and, unfortunately, the Lord had answered the prayer somewhat copiously, the resultant floods causing damage to the farmer. I am afraid that my studies did not take me to the point of finding out what was the result of the case.

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– My question is directed to the Minister for Shipping and Transport. I ask the Minister whether he has any infor mation on the circumstances whereby the vessel “Wanaka” left 2,000 sacks of potatoes on the Burnie wharfs last Saturday week, 23rd April, resulting in a substantial loss to Tasmanian farmers because of the ruling high price for potatoes on the Sydney market at that time. If the Minister has not the information will he ask his departmental officers to ascertain all the facts relating to this matter? Further, in the interests of the potato industry will he urgently consider the requests I made to him earlier this year for the provision of “ E “ class vessels from the Australian National Line to guarantee regular and efficient lifting of produce and a fair allocation of space to all merchants?

Minister for Shipping and Transport · CORIO, VICTORIA · LP

– 1 have no knowledge of the incident to which the honorable member refers. Nothing about it has come under my notice to this date, but I shall certainly make some inquiries into it. The honorable member interviewed me on several occasions concerning the provision of “ E “ class vessels. That is under consideration, and all details are being attended to. When the necessary information is available I shall let the honorable gentleman have it.

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– If the

Attorney-General will descend for a moment from the metaphysical to the earthly, may I ask him whether he is aware of a case which was brought in America by a farmer in one State against the authorities of another State on the grounds that they had seeded the clouds on the border of the two States, and that rain had fallen in the State where his farm was and had caused considerable flood damage? If I remember rightly, this was in 1956. If the Attorney-General is aware of that case, can he tell the House what the judgment was or what damages were settled out of court as a result of it?


– I have always endeavoured to confine my reading to English and Australian cases and to avoid reference to too many American cases. My American colleagues in the law are entitled to take a percentage of the verdict, and it seemed to me that there was no need for me to tease myself by a reading of the verdicts that they obtained. I have not looked into the case that the honorable member mentions, but as he no doubt knows where it can be found, he can send it to me and then I will be much wiser.

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– I, too, would like to try to bring the Attorney-General back to earth. I ask the honorable gentleman: Has the Government yet considered the recommendations of the Joint Committee on Constitutional Review? If so, when does it propose to announce its decision in regard to a referendum or referendums - or in the legal term, referenda?


– As we are in a somewhat facetious mood-

Mr Calwell:

– I am deadly serious.


– Yes, I know you are. It is quite appropriate that a question should be asked by the honorable gentleman about the report of the Constitutional Review Committee after we have been speaking about the seeding of clouds and about floods. There is a good deal of material in the report and in due course, when it is fully absorbed, it will be dealt with.

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– I should like to take the Attorney-General out to sea. Is the honorable gentleman in a position to report on the results of the recent Law of the Sea Conference and in particular on the narrow defeat of the proposal to set territorial sea limits at 6 miles? How will this decision affect Australia’s claim regarding the pearlin? fields on the continental shelf?


– As honorable members know, a conference has been proceeding in Geneva under the auspices of the United Nations with a view to arriving at a convention on the width of the territorial sea around maritime countries. Australia, I may say in passing, was represented at that conference - and represented in a most distinguished manner - by the head of my department, Sir Kenneth Bailey. Many proposals were made and amended, and a good deal of negotiation took place. In the long run, a proposal was sponsored by the United States of

America and Canada that there should be a territorial sea of 6 miles width - that is to say, a sea in which the maritime nation had exclusive rights - and that there should be a further area of 6 miles therefrom in which the littoral country, the maritime country in question, should have exclusive fishing rights, subject to the qualification that any country whose nationals had fished to a substantial degree in that outer area during the period from 1953 to 1957 should be allowed to continue to fish, but only until, I think, 1970. That is to say, those operations were to be phased out.

This proposal, which was supported by all the Commonwealth countries except India, was defeated by the very narrow margin of one vote. This, I may say, does not affect the question of pearling on the continental shelf. At the earlier conference on the law of the sea, agreement had been reached for a convention that the littoral nation - the maritime nation - in question should be entitled to all the produce of the continental shelf around its shores irrespective of the area that shelf occupied, and pearls would come within the produce so conceived, because they remain, on the bottom of the ocean and do not float about. Lobsters, I regret to say, do not come within that definition.

The failure of the conference, which is much to be regretted, means that at the moment we can reach no general agreement. But the continental shelf arrangement, if that is adopted by nations successively, will apply notwithstanding this failure.

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– I ask the Minister for Labour and National Service: Is there any chance that he will see the immediate and general walk-off by 3,500 waterside workers yesterday not as evidence of a Communist plot but as evidence of very general dissatisfaction with the dictatorial and one-sided way in which the arbitration system has developed?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I think there can be no doubt that there is now strong evidence that the seamen’s strike has been engineered by their Communist leaders. The action of the seamen in recent days has amounted to pure hooliganism and is something that has. to -be regretted by all Australians. I have very grave doubts whether the seamen themselves will for very long :accept the recommendations of their Communist leaders, and I have very high hopes that it will not be too long before a true settlement is reached. I think that the Communist leaders have reached the heights of misrepresentation so far as this current dispute is concerned. In only one respect, I should like to bring that misrepresentation to the notice of the House. They have issued a pamphlet showing that the wages paid to a typical group of seamen were of the order of £17 7s. 6d. a week.

Mr Thompson:

– The question was about waterside workers.


– The honorable member for Yarra asked me a question about the seamen and 1 have answered that question about the seamen.

Mr Bryant:

– On a point of order, Mr. Speaker: If the Minister is to make a statement, could he not make it later? The question was about waterside workers and not about seamen.


-Order! The Minister heard the question and he has the right to give the answer.


– I want to make it perfectly clear that I think- there has been a degree of misrepresentation in these affairs that is unpardonable. Referring to the one facet to which I directed attention, namely, to the pay of seamen - they all are clearly interlocked in these relationships - I should point out that ‘in a typical case shown in: a pamphlet recently issued the pay they are receiving is £17 7s. 6d. a week, plus £7 17s. -6d. a week for the two days for working over the weekend, and £15 in respect of normal overtime. The total pay is more - than £40 a week, made up of £17 7s. 6d. .plus £7 17s. 6d. which is given to them for the two days they are given as leave-

Mr Ward:

– They still lose two days’ pay as compared to what they would have got under the old award.


– Order! I ask the Minister to resume his seat for a moment, and I ask the honorable member for East Sydney to remain silent. I think that-where a question demands a long answer it would be wiser for the Minister to ask, at the end of question time, for leave to make a statement.


– With very great respect to you, Mr. Speaker, I think that if a question is asked on a matter of great national importance - ‘and this is a matter of very great national importance - it is appropriate for me to answer that question in full at question time.


– Order! I ask the Minister not to argue with the Chair.

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Mr SPEAKER (Hon John McLeay:

I have received a letter from the honorable member for Barton (Mr. Reynolds) proposing that a definite matter of urgent public importance be submitted to the House for discussion, namely -

The failure -of the Government (a) to institute a national inquiry to ascertain to what extent Commonwealth assistance is required to provide adequately for primary, secondary and technical education in Australia, (b) to increase the number of Commonwealth scholarships and (c) to provide scholarships for students in secondary and technical education.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places) -


.- The urgency of this matter, Mr. Speaker, is emphasized by the fact that on 21st May, a conference will be held in Sydney under the auspices of the -Australian Teachers Federation. That conference will be attended by representatives of professional teachers’ organizations, parents and citizens associations, mothers’ clubs and others who might well be expected to be there; but the conference will be attended also by representatives of all sorts of industrial and commercial undertakings and of primary industry. The fact is that resolutions are being carried by all sorts of organizations from one end of Australia to the other appealing urgently to the Commonwealth

Government’ to* make financial aid’ available for primary, secondary, and technical education. In fact, the Commonwealth. Go.vernment appears to be the only body in Australia which is opposed to this proposition. Only recently, in reply to a question asked by a member of the Opposition, the Prime Minister (Mr. Menzies) said -

One hundred speeches on this matter will not change my mind.

The Prime Minister held very different views in 1945, as is shown by the report published in “ Hansard “, volume 1 84, at page 4612. The right honorable gentleman was then Leader of the Opposition, and in that capacity he submitted a motion on the subject of education. I shall not read the whole of the motion, but I shall refer, to relevant portions of it, and I ask supporters -of the Government to take particular note of paragraphs (c) and (d). The right honorable gentleman moved, on -26th July, 1945, in this House - (1) That in the opinion of this House -

  1. A revised and extended educational system is of prime importance in post-war reconstruction;
  2. In particular, attention needs to be directed to increased facilities for secondary, rural, technical and university training, special adult education, and the problem of the qualifications, status and remuneration of teachers;
  3. Effective reform may involve substantial

Commonwealth financial aid and if this should prove necessary such aid should be granted;

  1. In order to provide a basis for - such re form the Commonwealth should set up in co-operation with the States a qualified commission, including some expert or experts from overseas; to report upon the existing educational facilities in Australia . . .

That was the attitude of the present Prime Minister in 1945 to the very things which the present Opposition, as well as parents and other interested persons are seeking. Yet the Prime Minister is prepared to say now that he will not do anything about those matters, and a hundred speeches will not change his mind. The democracies have an old-fashioned habit: When a government denies the democratically expressed wishes of the people, the people have a habit of changing their Prime Minister.

Mr Howson:

– What did the Labour Government do about education?

Mk REYNOED&- The present Prime Minister was well aware, in. 1945 that hewas speaking to a. sympathetic Government, Members who supported the Labour Government at that time agreed that the right honorable gentleman’s time be extended for half an hour. The Labour Government praised the right honorable gentleman, who was then Leader of the Opposition, for his great contribution to the discussions of the House. That is what the Labour Government thought about it. The same Labour Government went on to bring in farreaching educational reforms involving substantial Commonwealth assistance to ex-servicemen in the form of scholarships. That system was subsequently taken up by this Government. In 1948, the Chifley Labour Government asked the Commonwealth Office of Education to investigate the possibility of extending those scholarships downwards to cover, secondary education and it is a pity, for the. sake, of many young persons, that the Labour Government went out of office before that plan was brought to fruition. This Government has not done anything about it.

It is useless to blame the States. The present Prime Minister himself said in 1945 that we should resist that temptation when he said -

I have said that the Commonwealth must, in my opinion, give aid to the States. Ever since the passage of uniform taxation laws, the States have not been masters in their own financial house. Whatever State Ministers of Education may say about what they would like to do, there is a sharp limit to their available resources. Yet in more States than one there is a burning desire to do something about this matter . . . Unless the Commonwealth, no matter which political party is in power, can aid the States financially, only limited objectives will be sought.

That was the opinion of the present Prime Minister in 1945. To-day it is impossible for the States to make any more money available for education. New- South Wales, for example, devotes 5’5 per cent, of the money it receives by way of tax reimbursement from this Commonwealth Government’ to education. I admire any Minister of Education, whether Liberal or Labour who is able to withstand the pressure of other demands for public money to maintain the vote for education. The demand for money for transport, hospitals, municipalities and the rest is very strong, but se far the State Ministers for Education have: been able to place education in a position of prime importance. Still, the amount available is totally inadequate.

In the brief time at my disposal, I can touch on only a few details. First, it must be admitted that there is inequality of opportunity, lt exists in education because we rely more and more on parents and citizens to help privately to maintain our education facilities. Parents have to buy more and more school requisites and uniforms and also various kinds of equipment. Very often, the cost to the parent for each child at the beginning of the school year amounts to £40 or £50. That is no exaggeration, particularly when a child is transferring from a primary to a secondary school. Fees have to be paid also. The result is that only the children of parents who can afford the expense get the necessary requisites. The State cannot provide them, and many children whose parents cannot afford the cost have to go without school requisites that they need. One can only guess at the feelings of the young children whose parents are unable to give them the things that other children have. At that sensitive age, they are aware of the difference although in some instances concessions are made to help the parents.

Large families have a particular disability in this regard especially because child endowment has not been increased for other than the first child since 1948 under the Chifley Government.

There is an inequality that derives from the very fact that some school organizations such as parents’ and citizens’ associations are not only better able to provide for the school than others, but are more enthusiastic about it. It is largely schools with parent and citizen bodies which are not enthusiastic that have to put up with the disabilities to which I have referred. There are many schools in my own area, as there are all over the Commonwealth, where parents’ organizations are even providing assembly halls or making a substantial contribution towards the capital structure of the school, and where they are helping to pay for telephones and telephone bills - charges which, I suggest, the Commonwealth Government could well meet. One telephone is generally provided, but any additional telephones have to be paid for. Labour asks for, and believes in, equal opportunity for all children to develop such talents as they have to the fullest possible extent.

Over-loaded classes are another symptom of the inadequacy of our educational system. When there are 40 or more children in a class they receive, not education, but mass instruction, which is a far different thing. One can only guess at the feelings of frustration and inferiority that youngsters suffer when they are not able to keep up with the rest in those classes in which one teacher is trying to cater for 40 children. A problem of discipline also arises. The teacher is not able to cater for the needs of the individual child. This is very probably connected with the indiscipline in the community and the complaints made by all kinds of people about the growth of vice, larrikanism, and delinquency. These things must be related to inadequate provision for teaching.

The secretary of the South Australian Institute of Teachers told the Australian Teachers Federation conference this year that one child in three in South Australia is in a class of over 40 children, and that one child in eight is in a class of over 50. In New South Wales, a survey which was recently taken by the New South Wales Teachers Federation showed that, in the infant schools, 68 per cent, of children are in classes of over 40; in primary schools, 50 per cent, of pupils are in classes of over 40; and in first, second and third years, 60 per cent, of pupils are in classes of over 40 children.

This is in spite of the fact that a world conference of teachers, meeting in Frankfurt, in 1957, and comprising representatives of 50 countries, declared that the maximum number of children to a class should be 25 for those aged from six to eleven years, and from 25 to 30 for children aged from twelve to sixteen years.

Of course, this problem of overloaded classes arises from our very great population increase. The “ Education News “, a publication of the Commonwealth Office ot Education, in October. 1959, mentioned that attendances at government schools in Australia had increased by 276,454 between 1954 and 1958, while attendances at nongovernment schools had increased by almost 90,000. In New South Wales, public school enrolments in 1950 were 383,000, but by 1960 they had risen to 590,000 and by 1965 they are expected to be 628,000. In this connexion, one has to take note of increases in the birth rate. In 1940, the number of live births in Australia was 48,000, and the birth rate was about 17.4 per 1,000 people. In 1958 there were 80,000 live births, and the birth rate was slightly over 21 per 1,000 of the population. In Australia to-day, there are over 1,000,000 children who are four years of age and under. That is one-tenth of our population.

I could go on to talk about the teacher shortage. I could talk about the lack of relief staff. I could talk about the reemployment of teachers who have retired - teachers 70 years of age or more who are trying to cope with over-loaded classes. All of this means that we in Australia must see that aid is given to the States to train and to employ vastly more teachers. For that purpose, I suggest that scholarships need to be increased at the tertiary level and extended to the secondary level. Many teachers have been trained as a result of the benefits of Commonwealth scholarships, but these scholarships number just over 3,000, the same as the number in 1952, despite the increase in school population. In 1955, just under 8,000 youngsters applied for the 3,000 scholarships that were available. In 1959, there were still only 3,000 scholarships available, but more than 13,000 children applied for them.

The Opposition believes that in order to help the States a thorough review of the needs of education in its primary, secondary and technical aspects is required. A review of the scholarships granted to students in tertiary education is also necessary. Not only is an investigation necessary, but an immediate grant should be made to the States to enable them to survive a crisis that now threatens education.


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

Minister for Immigration · Angas · LP

– I have listened with much interest to the honorable member for Barton (Mr. Reynolds) but. as he was speaking, I could not help feeling that his criticisms were misdirected. What he was really complaining about was some of the growing pains of a rapidly expanding nation. I think he was less than generous in failing to recognize that the Government is as much concerned about these things as is the Opposition. The problems to which my honorable friend adverted are under constant examination by the Government, and I think it can be truly said that this Government has shown a better realization of their significance and has contributed more to their solution than did any previous Commonwealth administration.

The arguments of the Opposition seem to imply that the Government has failed in its responsibilities, but let me point this out before we go any further: The Commonwealth, as has been said time and time again in this House, is not responsible for education in some of the ways in which the Opposition has implied. After all, the word “ education “ is not even mentioned in the Constitution. Education is pre-eminently a State matter, and if you abstract this from the States, you will deprive them of one of their principal and traditional functions, and one which they are best suited to perform because of their nearness to the people, and their intimate knowledge of local conditions and local requirements. As the Prime Minister (Mr. Menzies), himself, said in my hearing in this chamber on an earlier occasion on which this matter was discussed, the Opposition really wants Parliament to assume responsibility without power. Since we are a federal government, believing in some division of national and local responsibility, this is a proposition that we are not prepared to accept. Moreover, as everybody in the House must realize, in the world of practical politics the State governments themselves are the strongest opponents of any move on the part of this Parliament to assume power over education, with all its concomitants of centralization. The motion, therefore, starts from a premise which cannot be substantiated on a basis of federalism.

Consistent with the Prime Minister’s spectacular, memorable and remarkable contribution to university education, the Government has helped the States considerably by indirect means. Let me remind honorable members very briefly of these things. To begin with, for years we have -made available funds for capital development considerably in .excess of loan. raisings. This has been done out of revenue - a sum amounting to £316,000,000 for the years 1954-55 to 1958-59. AH of us, on this side of the House, recall to our discomfort that the Commonwealth has financed works from revenue to the extent of £703,000,000 in the last six years and, in the result, the States have been able to devote substantial resources to buildings and plant for primary, secondary and technical schools. What proportion of funds !they should spend on capital works for education is a matter for the State governments to decide, and no one - let us -admit quite frankly- is quicker to insist on State rights than are State Ministers, whatever their political complexion.

Let me remind the House that the Commonwealth over the years has provided large sums for the States. This is a matter which is known to every honorable member, but sometimes, T suspect, not realized broadly by the public at large outside this chamber. This figure is determined annually after consultation with the State Premiers. How spectacularly these figures have grown can be estimated by comparing the overall general revenue grants to the States in 1954-55 with those in 1959-60. In 1954-55 the figure was £162,000,000; to-day it has swollen to over £251,000,000. Moreover, under the financial agreement of 1959, revenue payments to the States have increased by £26,000,000 and this surely has increased their wherewithal to spend on education. The budgeted expenditure of the six States on education for 1959-60 is £10,000,000 more than that of last year and, if honorable members look ahead, the revenue payments that the States will receive will increase in 1960, 1961 and the years beyond that, because the new formula makes allowances for increases in wages and rises in population, and a betterment factor. If increases in State expenditure on education do not follow, as the result of these further favorable financial provisions, I suggest it is not the Commonwealth which is at fault.

Nor should we forget the large revenues raised by the States themselves. If we exclude business undertakings, these amounted to £119,250,000- in round figures- in 1954-55, and that figure rose to £181,500,000 in 1958-59, an increase of £62,000,000 in -five years. How much should be allocated to education is, of course, for each State to determine. The House .should note that between 1954-55 and 1958”59 total State expenditure on education rose from £71,750,000 to over £108,500,00; an increase, in round figures, of £37,000,000. During the same period, as I have said, ‘State revenues increased by £62.000,000 from their own resources and by nearly £6’3;500,000 from Commonwealth tax reimbursement and special grants. I am not being critical of the States - in saying these things - for not spending more of their ever-swelling revenues on education. That, after all, is their own affair; but I do think it is wrong of the Opposition to belabour the Government with allegations of indifference and inaction when, directly and indirectly, we have done much towards solving problems that are- not our constitutional responsibility and when we have provided larger and larger sums to enable the States to discharge their obligations in this and in other fields. -It is only ‘fair, Mr. Deputy Speaker, to remind the House, in passing, how richly the Government has contributed to university education by its very prompt implementation of the Murray report. But this is no exception to our general attitude that education is primarily a State function because, first, what we did under the Murray report was a logical extension of -Commonwealth obligations under ;the reconstruction training scheme; secondly, the State universities are autonomous bodies not subject to State control; and thirdly, the States themselves supported the Government’s ^fulfilment of the Murray committee’s recommendations with considerable enthusiasm.

I now ‘turn briefly to the second part of the honorable gentleman’s proposal: his allegation of failure to increase the number of Commonwealth scholarships. If we look at the figures we find that there has been a -steady increase in the number of those scholarships. This scheme began in 1959 when 2,400 scholarships were offered at a cost of £750,000. That figure has risen until last year 3,100 of these scholarships were offered at an estimated cost of £2,170,000. I ask the House to note these figures because they belie what the Opposition is asserting. The scholarships awarded in nine years have shot up - those actually received - by 30 per cent., and at a cost which has nearly trebled. Incidentally, the House may be interested to know that in 1959 there were 11,256 Commonwealth scholars in training. Nor is this all. The Commonwealth Scholarships Board has arranged substantial numbers of later year awards, and there are nearly 700 of these for this year. These awards are made to students whose academic records prior to commencing their .university courses were not of a standard high enough to win scholarships, but who have shown the requisite capacity at some later stage.

Furthermore, the board reports regularly on matters .within its purview. For example, since the Murray report, there has been a liberalization of the means test for students seeking living allowances, together with adjustments in the maximum living allowance. The Government has also, on the advice of the board, adopted a scheme for post-graduate awards additional to those made by universities and industrial corporations. This began last year, when 100 such awards were made. In 1960 another 100 have been granted and, in suitable cases, these may be renewed. In. the result, in a few years we estimate there will be 250 post-graduate scholars undergoing, with Commonwealth support, advanced training and research at universities. All of these undergraduate and graduate schemes are carefully watched and reported on so that the Government can plan fresh forms of assistance which will take into account our need for skilled people and our desire to avoid .any wastage of talent.

In the .time .that remains to me, let me come to the honorable gentleman’s third charge. I .say at once that he is surely wide of the mark in attacking the Government for failing to provide scholarships for technical education. It cannot be made too clear that Commonwealth scholarships are not limited to universities. Scholarship winners may take courses. at institutions other .than universities- at university-type institutions. Naturally, the courses must be of a standard approved by -the Commonwealth .Scholarship Board. So far, courses have been approved at technical colleges, agricultural and forestry schools, teachers’ colleges and institutions, which rain, for example, chemists, physiotherapists and optometrists. Altogether, 1,050 students, or 9 per cent, of the total Commonwealth scholars, are enrolled in these categories. Furthermore, when graduates from approved courses of studies show exceptional talent and qualify for studies in university degree courses, the board may extend their awards to enable them to complete university courses, if they are scholars. .If they are not scholars, the board can make an award to them. Thus, the scholarship scheme enables many students to obtain training outside universities and assists the most promising to proceed to university degrees.

In conclusion, Sir, may I say that the Government has not a closed mind to these problems. We are thinking about them continually. In what we are now doing, we have not said the last word. Within the overall picture of our rapidly developing economy and of our international obligations, with their multitudinous demands on the public purse, I have no doubt myself that as circumstances permit, more will be done to -supplement the action of the States in the exercise of their powers.


– -Order! The Minister’s time has expired.


.- The Minister for Immigration (Mr. Downer) has not contributed anything of value to the discussion of the .important subject that has been raised by the honorable member for Barton (Mr. Reynolds) as a matter of urgency. The Minister merely followed the line, of argument used -by most Government speakers when referring to education in general - that the question is largely one for the States, and for the States alone. He overlooked the obvious fact .that the States have .advised this Government in no uncertain terms that, .because sufficient finance is not made available, the standard of our educational system lags far behind those of most of the other countries where economic levels are much ‘the same as here. I think the Minister appreciates the true situation,, but he falls back on the old argument that -education -is constitutionally a matter for the States and, therefore, not one with which this Government should concern itself.

I point out that in many matters which, constitutionally, .could be held to be the prerogative of the States, this Government has shown more than a passing interest, because they are matters of national importance. The same degree of importance should be accorded to education, but, unfortunately, it is not. Because of that, the Opposition brings forward this subject for discussion as one of urgent public importance. We do not do that in any frivolous spirit. We do it because we believe that in this country there is an urgent need tor greater educational opportunities, from the kindergarten through to the university for all who seek them. The demand for increased and improved school facilities for our greatly increased population is imposing a tremendous burden upon State educational authorities, which, in my opinion, are entitled to far greater financial recognition from this Government than they have received in the past.

The belief that there should be equal opportunities for all who require education, and that the responsibility for education should be shared by the Commonwealth and the States, instead of being left entirely with the States is not confined to members of the Opposition. I submit that the provision of equal educational opportunities should be regarded by this Government as a matter of paramount importance. Unfortunately, the conditions to which I have referred have placed such a strain upon State education departments as to prevent them from providing the educational facilities to which the Australian people are entitled. The table of educational expenditure contained in the last report of the Commonwealth Grants Commission discloses that the per capita expenditure on education ranged from 172. 5d. in Queensland to 256d. in Tasmania. That quite considerable difference in expenditure obviously reflects a variation of standards as between the States.

Let us examine the Opposition’s proposal. First, it points to the need for a Commonwealth committee of inquiry. I suggest that such an inquiry is essential and that it ought to be instituted by this Government. I believe that the committee of inquiry should investigate the conditions relating to secondary and primary education. The need for such an inquiry is obvious. It has been requested by the teachers’ organiza tions, by parents’ and friends’ associations and by other interested bodies, which realize that the Australian educational system falls far below the standards necessary. These associations do not suggest that the Commonwealth should take over the full burden and treat education on a national basis; they ask merely that the Commonwealth should take some responsibility in connexion with education, especially in those fields which make for the promotion of active and responsible citizenship.

The Commonwealth already accepts responsibility for giving advice and information in connexion with some aspects of technical education, and it accepts responsibility for education in the Australian Capital Territory and in our external territories. It also accepts some responsibility for adult education. As has been pointed out by the honorable member for Barton, the case we are putting before the House to-day is largely the result of the efforts of teachers, of parents and of interested bodies from one end of Australia to the other, all of whom believe that our educational system is failing to meet the demands made on it. In view of the repeated requests that have been made by these responsible people, I submit that the Government should immediately set up a committee of inquiry along the lines that have been suggested by the Opposition during this debate.

Reference has been made by the Minister to the generous assistance accorded by this Government in the field of tertiary education. We on this side acknowledge that generous assistance. We acknowledge the very valuable contribution made to university education by the Murray committee. In its report on Australian universities, that committee had this to say with respect to primary and secondary school education -

Though we made no close inquiry into the arrangements for secondary education we were sufficiently impressed by the evidence presented of wastage of talent at the secondary school level, due to early leaving, to suggest that this problem merits close attention. For example, the 1954 Commonwealth census revealed that only 45.8 per cent, of 15 year olds, 20.5 per cent, of 16 year olds and 9.4 per cent, of 17 year olds are in full-time education of any sort.

Despite that comment, this Government still maintains that it should not enter into the fields of primary and secondary education. I believe that, if given the opportunity to inquire into existing school conditions and to report upon the extent to which, and the basis on which, financial assistance should be accorded to the States, a committee of inquiry similar to the Murray committee would report that a sorry situation exists at the primary and secondary school levels to-day. I believe that it would fairly report also that these conditions have arisen largely, at least in recent years, because most, if not all, of those States have been unable to provide adequate educational facilities to meet our increasing school enrolments.

On the other hand, the position in the Australian Capital Territory obviously is much better. The various Ministers who have been responsible for planning and meeting the educational needs of the children of this city have acted with a great deal of vision and foresight. Probably a classical example of this is the new Lyneham High School - a beautiful building, superbly appointed, and with a teacherstudent ratio that I do not believe is equalled anywhere in the Commonwealth. In short, conditions are ideal. This is a classical example of what can be achieved, and the conditions which could obtain in all States if sufficient finance were provided for that purpose. If there were sufficient finance, many of the existing school buildings - dreary and dingy almost beyond belief - could be replaced by more attractive and artistically designed structures.

In this technical age; in this atomic age; in this age of automation and, we hope, of equal opportunities, adequate educational standards are essential for the development of this country. Unfortunately, those standards are not now available. Anyone who has taken the trouble to study the trend of the advances which have been made by Russia, the United States of America and Great Britain in expanding their educational facilities, will be aware of the extent to which this country is falling behind in meeting the demands of modern education. As long as 1954 Russia was producing 336 graduates in pure and applied science per one million of population. The United States was then producing 281 graduates, and Australia 79. I have no doubt that the figures are much the same to-day. If measured in terms of the standards which have been adopted by Russia and the United States, Australia’s training of graduates in the sciences is completely insignificant.

The provision of equal educational opportunities should be considered immediately by the Government. Up to the present, it has concerned itself only with the education of those children whose parents are able to afford to continue their education to university standard, but it has not concerned itself with education below that standard. Many young people in this country would be able to qualify for a university education if sufficient finance were available for that purpose.


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


.- As I understand it, the essence of the Opposition’s argument this afternoon, is that the Commonwealth Government should enter directly into the field of primary and secondary education. It would be absurd for the Commonwealth to institute an inquiry, in the terms which have been proposed by the Opposition, in a field which is constitutionally the responsibility of other governments, unless those governments were prepared to meet any additional expenditure which might be recommended by the committee. Despite the proposal for an inquiry, I think that the House will agree with me that we are debating now the Commonwealth Government’s participation in primary and secondary education.

The basis of the Opposition’s proposal which has been outlined by the honorable member for Barton (Mr. Reynolds) and the honorable member for Bass (Mr. Barnard1) is, first, that primary and secondary education in Australia are not adequately catered for, and secondly, that the States which have the constitutional responsibility for primary and secondary education have not sufficient resources to cater for it adequately. I should like to deal with each of those claims in turn. Whose responsibility is it to determine whether the education system in Australia is adequate? Is it the responsibility of the States, which have complete and absolute control over education and are responsible for it, or is it the responsibility of the Commonwealth which has absolutely no control over education? This proposition hn>, only to be stated’ for the” answer to be clear. Yet the Opposition suggests that the Commonwealth.Government - not the States - should institute an inquiry! Why do honorable members opposite not press the States to institute an inquiry into primary and secondary education in Australia if they are so worried about it? If an inquiry is necessary, 1” should think that the States are perfectly capable of setting up a committee for this purpose, and” of obtaining the necessary resources to implement any recommendations which might be made, either by adjusting their own expenditures or by approaching, the Commonwealth Government, which is the taxing authority in Australia.

There are well-tried methods in a federal system for obtaining additional resources for a particular item of expenditure and, at the same time, maintaining the proper balance of responsibilities which is so necessary if the federal system is to be preserved. The first of these methods is for the responsible authority - in this case the States - to adjust the distribution- of expenditure, that is, to spend more on education and less on something else. Of course, this does not involve actually spending less on. anything in absolute terms- because the revenues which are available to the States are increasing constantly. It means merelyadjusting the proportions of particular items of expenditure. The Opposition has told us this afternoon that that is impossible. If I have time, I hope to say something about that later:

The other method by which the responsible authority - in- this case the States - can obtain additional resources is to approach the Commonwealth Government for increased finance, either by way of a grant in terms- of. section 69 of the Constitution or by an increased tax- reimbursement. In either case it is up to the States, as the responsible authorities, as the people who know the subject and as- the experts in education, to marshal the facts and to make a case. Have they done so? Of course they have not! The move by the Premier of Western Australia during the Premiers’ Conference last year for Commonwealth participation in primary and secondary education lapsed for want of support from the other premiers. Yet the Opposition wants the Commonwealth Government, which has no. responsibility, to take the initiative! To me; this is a little like.- some- one- who, when requesting relief from the Commissioner of Taxation, expects the commissioner to prepare his ‘Case for him.

  1. return now to the capacity of the States to spend more on education should they desire to. do so. There is nothing immutable or sacrosanct about the amounts spent in the various categories of government expenditure, and yet the whole argument which has been advanced by the Opposition proceeds on the assumption that there is no room for change in State expenditure. The various bodies which are pressing for Commonwealth aid’ for primary and secondary education - these bodies have initiated the move and the Opposition has jumped on the band-wagon because it anticipates that it can make political capital out of this clamour- have accepted without question the statements of the spokesmen for the State governments that” sufficient money is not’ available: What an extraordinary attitude! The pattern of State government expenditure thus becomes rigid and fixed, no longer responsive to changing needs and attitudes and changes in social conscience. The element of flexibility, of response to change, is provided by the Commonwealth Government, a government that has no responsibility and therefore no knowledge of the needs of the situation.

L cannot imagine any system more designed to plunge us into sheer financial irresponsibility and chaos than this proposal suggests. It should, I believe, be vigorously resisted by this Parliament if it has any respect for its responsibilities as a Commonwealth parliament in a federal system. Those people who believe that more money should be spent on education should and must convince the. responsible authorities. They should convince them that their sense of values - their order of priorities - words which the honorable member for Wills (Mr. Bryant) is so fond of using - must be changed. As it is, they are taking the easier course of coming to an authority which has absolutely no responsibility whatsoever.

Who can doubt the capacity of the States to spend more money if they desire to do so? The Minister for Immigration (Mr.

Downer), when speaking earlier in the debate, pointed out that expenditure on education by the States has not increased in anything like the. proportion of the increase in their income from all sources. Surely that in itself gives- scope for increased expenditure on education. When it is remembered, too, how much, of that increase in this expenditure on education has been borne directly by the Commonwealth Government, by way of vastly increased amounts made available to the universities, it is- clear that direct. Commonwealth action has greatly increased the elbow room available to the State governments in the- fields of primary and secondary education.


-Order! The honorable member’s, time has expired.


.- I have too much respect for the intellect of the Minister for Immigration (Mr. Downer) to believe that he believes- that, some of the points he has made constitute some kind of an answer to the request that has been put forward, lt is perfectly true that the Commonwealth Constitution does not mention education. It does not mention universities either, yet the Commonwealth is bearing the major part of the cost of the universities.

The Minister argued that as in 1954 the expenditure of the States on education was £71,000,000, whereas now it is £109,000,000, everything is advancing. Every honorable member knows that in 1954 the basic wage was in the vicinity of £9 a week; now it is in the vicinity of £14 10s. So, the two units of money being compared are not really comparable at all. The Minister spoke also of the adjustment of the means test in relation to scholarships. 1 remember arguing with Mr. Dedman - I think about 1948 - about the means test which began applying at £5 8s. a week, which was then the basic wage. Obviously, if the means test was applying to-day as it did then, without any adjustment, it would be an incredibly savage means test. The simple fact is that the value of money has completely changed.

It would be a good thing if we got back to the question of the substance of education and the need for assistance to it in the community. It is true that it is the con stitutional responsibility, of the States, and also, that the Constitution does not envisage the Commonwealth taking charge of education. However, the framers- of the Constitution, whatever their, slip-shod drafting has led to. in High Court decisions, did not envisage either that the Commonwealth would have exclusive taxation powers under uniform taxation; yet we are hopelessly and inextricably involved in the affairs of every State because to-day we finance the vast bulk, of the Budget of every State. Therefore, if education is not in- an adequate position it is something for us to look at.

The Commonwealth Constitution has, of course, covered the problem of this sort of grant, and if it is competent for the Commonwealth under the Constitution to finance universities, then under this proposal the Opposition asks the Government to investigate the problem of financing other forms of education as well. Section 96- of- the Constitution provides -

During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

That is- a very wide, power under which to make grants to the. States for educational purposes^ Education is that development of personality which goes on as a result, of an individual’s learnings, and personality is the sum total of an individual’s attitudes and aptitudes. The cultural side of education is the development of attitudes, and the technical side of education is the development of aptitudes. I feel that the teaching body in. this> country has, on the whole, done a good job. I am frankly not impressed by stories about increasing delinquency or some failures in. education in that respect. I remember my own childhood in South Fremantle and the violence of the gangs and. pushes, and there is nothing among, the children of to-day that is the equivalent of that. There is nothing among the children to-day that is the equivalent to what went on in Melbourne in the 1920’s. Delinquency of a violent kind has diminished tremendously in this country, and I feel that it is due to the advance of education and also to the development of children’s and adolescents’ interests which result from education.

But we have terribly overcrowded high schools. There has been an educational revolution in the minds of parents. When I was in high school, the one State high school that was necessary in the city of Perth was the Perth Modern School. Now there are seven or eight, or maybe more of them. They have just opened Hollywood High School - a beautiful building - but 400 children are not able to fit into it. The John Curtin School, which was meant to be a high school for the big City of Fremantle, has become a great barrack for some 2,000 children.

There is a narrowness applied, I feel, by the Commonwealth towards the States in saying, “ This is a State responsibility “, and also by the States in their thinking as shown by some of the kinds of educational centres which they put up. A lot of the lack of advance in public expenditure on education in Australia has been due to the fact that in this greatly increased demand for secondary education on the part of parents for their children, there has been a tremendous pressure on the whole structure of private and public education. There are many more students going to private schools. The demand for education in Australia has greatly increased, but those private schools are, in many cases, gravely defective, especially on the technical side where establishment of technical centres is very expensive, as well as on the science side.

I cannot see why it should not be possible if the Commonwealth would make grants to the States to meet this need for the States to put up technical education centres to which children from the State high schools could come, as well as children from the private schools, in order to receive technical and scientific education. If the State says that what is happening to the child in the private school is none of its business, it is as much a failure for the Commonwealth to say, “ This is a constitutional responsibility of the States and we take no notice of education at all below the university level. We have to be interested in the child the moment he reaches university level, but whatever happens before getting him to that level, we propose to ignore.” I think that that is not a sound outlook. Now, I am not saying that the Commonwealth should interfere and take over the administration of education. The State governments certainly are not prepared for that, and I do not know whether the Australian community is prepared for it. But some of the things that are needed in education are the establishment of the physical assets. None of the States has the money to put up enough school buildings. The Minister has told us that over the last six years the Commonwealth has spent £703,000,000 on Commonwealth public works, and that that helps the States. It may do so in certain respects; but the Government has plans for a magnificent and totally unnecessary mint to be established in Canberra, ignoring the existence in three States of three other Royal mints which are apparently to go out of existence.

When you are examining public expenditure and decide, just because currency happens to be a Commonwealth responsibility - which, in fact, can be met in these State institutions under Commonwealth authority - to spend £750,000 on your mint instead of on high schools in the States, who is going to say that that is a better exercise of expenditure from which this Australian community will get more benefit? Never mind the constitutional responsibility. It is the need of the community which is the real point which should be looked at. Of course, the Commonwealth, having the power of the purse, can give priority to every project of its own. But it is not true to say that many of the projects to which it gives priority above those of the States more important to the Australian nation than the State projects. I think that if the Commonwealth does not want to be involved in the current running expenditure of education it ought to take another look at the question of making limited grants to relieve the States of the colossal burden of attempting to build schools. In the Australian Capital Territory, for instance, you built the Forrest school, costing £400,000, for a comparatively small number of children. That sort of thing could happen in States if the Government made the necessary grants.


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

Wide Bay

.- I think that statements made by some members of the Opposition need examination and correction. For example, the honorable member for Fremantle (Mr. Beazley) said that of the States had enough money to put up buildings for education. In last Friday’s Brisbane “ Courier-Mail “ there appeared a report, reading, in part as follows: -

A second three-year speed-up programme for construction of buildings at Queensland University will be launched next year, wilh a likely expenditure of about £3 million.

The Work would be subsidized by the Commonwealth Government on a £1 for £1 basis with the State Government. £3,000,000 worth! Yet the honorable member says that the States cannot afford any expenditure on putting up education buildings. Of course, he was not referring to Queensland.

Mr Beazley:

– - I was not referring to universities either.


– May 1 say that in Queensland, too. over £1,000,000 was spent in the last three years on university buildings, and at present the Queensland Government is spending about £3,000,000 a year on primary a; d secondary school buildings. If the honorable member for Fremantle were to give himself the pleasure of visiting Queensland and driving throughout the State he would find some very fine primary and secondary school buildings there, due entirely to the activities of the present State Government. Not only has the Queensland Government been spending a tremendous amount of money on primary, secondary and tertiary school buildings, but also the number of students attending the University of Queensland is worth noting. Fifty years ago there were 100 students at the University of Queensland. This year there are 8,700, and it is estimated that there will be 18,000 attending it in 1966. I venture to say, Mr. Deputy Speaker, that the Queensland Government will in 1966 find the means of educating those expected 18,000 students.

The honorable member for Bass (Mr. Barnard) said that the standard of education in Australia fell below that of other countries.

Mr Barnard:

– So it does.


– I should like to take issue with the honorable member for Bass in regard to that statement. I will show that the honorable member made a misstatement, no’ doubt in ignorance, but nevertheless it was a misstatement, when he described the standard of education in Australia. This country has provided some of the best students in the world. Australia is noted for the high standard of its universities. Compared with some of the universities in the United States of America the universities of Australia are right at the top of the tree. I mentioned last year in this chamber that some students from Queensland go to a university in Scotland so that they can obtain a medical degree, because the standard in Queensland is too high for them. Yet we are being told in this chamber that the standard of education in this country falls below that of other countries. One has only to look at the achievements of people from Australia who have contributed to world affairs to a very marked degree. I do not need to name all the outstanding men we have in Australia at present. I do not need to remind the House that Professor Bertram Dillon Steele of Queensland was so highly regarded that he was asked to take a professorship at McGill University in Canada at a salary three times the salary he was receiving in Queensland. He turned down the Canadian offer and to his credit rendered great honour to the State of Queensland by staying and teaching university students there. I was not one of his students, but I had the good fortune to know him.

Mr Duthie:

– That is irrelevant.


– I will contest that claim by the honorable member. The honorable member for Barton (Mr. Reynolds) said that appeals in respect of education have been made to the Commonwealth from all parts of Australia, and that therefore the Commonwealth should respond to those appeals. I have still to learn, Mr. Deputy Speaker, that some requests by teachers and a few other people in the community, however important they may be, can be regarded in the same way as the result of a referendum. It is news to me that a comparatively few requests coming from a State can be regarded as an appeal made to the Commonwealth by the majority of the people of Australia.

The honorable member for Barton also said that the Prime Minister (Mr. Menzies), when in Opposition in 194-5, asked for various things and that the then Labour Government praised him for his speech. It may have praised him for his speech, but what did it do about his requests? It was not until the present Liberal-Country Party Government came to office that anything was done about giving help to the universities. So, for all the praise that the Labour Government gave the present Prime Minister it did not do anything about meeting his requests. Yet to-day these people opposite say that this Government is not doing nearly enough to help the States in regard to education. The fact is that this Government is the only government which has taken .one step in relation to university education.

The whole thing can be summed up, Mr. Deputy Speaker, in the words of the Prime Minister in 1958, as reported at page 1454 of “Hansard” of 6th May, 1958. The Prime Minister said on that date - . . I should like to say to the honorable member that I . rather envy the easy way in which he sets the Constitution on one side on the ground that it is out of date. The fact is that it still exists. The fact is that education, except in Commonwealth territories, remains a function of the States. And the further fact is that I have not heard very much, if any, agitation in Australia, to have education transferred to the Commonwealth . . .

We were told by one honorable member that even at the last Premiers’ Conference, the States would not entertain any thought of transferring responsibility for education to the Commonwealth. It is quite clear that we are faced with this question: Is the Commonwealth to . have power over education or is it not? The Commonwealth at present does not have that power. It is not mentioned in the Constitution and it is entirely a. function of the .States. Yet some honorable members say that because the States - according to them - are not doing enough about education, the Commonwealth should provide for educational needs. The Commonwealth has enough to do in attending to the distribution of some £250,000,000 a year to the States without having to devise ways of providing for matters over which it has no power. I suggest to honorable members who believe that the Commonwealth. should do more that they use their influence with the Premiers of the States that they have criticized and urge them to follow the lead of Queensland in doing more for education.

St. George

.- The House appears to be treating this subject with some seriousness, but I still incline to the belief that it is not treating it with sufficient seriousness. The largest State, New South Wales, spends 55 per .cent, of its revenue on education, but New South Wales still feels the need for a great deal more money to provide for all the requirements of education. I strongly doubt whether any other State is doing as much in the field of education as New South Wales is.

Mr Duthie:

– Yes, Tasmania is.


– The honorable member for Wilmot informs me that Tasmania spends a bigger proportion of its revenue on education. than does New South Wales. I am very pleased to learn that there is another State spending more, proportionately, than New South Wales is.

It is impossible for the States themselves to provide more money for education, and they cannot turn anywhere except to the Commonwealth Government. A big responsibility rests upon the Commonwealth to satisfy this urgent need. My colleagues have spoken eloquently about the many facets of the problem of education. They have dealt with primary, secondary and technical education, but I wish to direct the Government’s attention to a particular branch of -technical education. I refer to textile colleges. This matter should have a special appeal for members of the Australian Country Party. Geelong and Melbourne have excellent textile colleges, but Sydney’s textile college can .compare with neither of them. Tasmania, South Australia, Western Australia and Queensland still have no textile colleges. These colleges . are extremely expensive to establish, but the need more than justifies the expense. Costly machinery must be purchased and laboratories equipped. The students have to be shown the scouring, combing, carding, spinning, weaving and knitting machines. The study of the fibre that we call wool must include a study of its treatment and manufacture by these machines. I doubt whether any State has the necessary finance to establish a proper textile college. Geelong and

Melbourne have tried to do so and have produced collegesthat are very good, but unless all States have textile colleges, there can be no satisfactory answer to the problem of educating students in this field.

If the Commonwealth continues to ignore this field of education, students will be denied the facilities that they need if they are to be trained as scientists in wool. We need these scientists if we are to recover some of the ground lost to synthetic fibres. We want a place where students can study the fibre that “Australia produces best in quality and quantity. Let us keep in mind that Japan will stop buying Australian wool the moment it discovers a fibre to replace wool at a price that can be made to diminish spectacularly with the expansion of its use. Let us remember that four-ninths of Australia’s total produce sales are represented by wool and that, as a consequence, our economy- is still geared to wool. Therefore, I appeal for Commonwealth assistance in the establishment and maintenance of these textile colleges.


– Order! I think ‘ the honorable member is getting a bit outside the ambit of the discussion.


– The matter raised by the Opposition referred to technical colleges.


– It referred to primary and secondary education, not to textiles.


– These textile colleges are technical colleges, Mr. Deputy Speaker.


– They are technical colleges, but they are outside the scope of the discussion.


– I will touchon thesubject as lightly as I can, but I point out that all the deficiencies which the Oppositionhas mentioned to-day can be remedied only if the Commonwealth comes to the rescue of the States. The Commonwealth’s finances could quite easily collapse if the synthetic fibres continue their remorseless advance into the field formerly occupied by wool. Here is a golden opportunity for the Commonwealth to help the Statesand to protect itself by establishing a form of insurance. I have referred in particular to textile colleges, but much of what I have said could be applied to any technical college.

The question of finance inevitably arises in these matters, andwe must ask ourselves how we -can obtain the finance that is needed.I suggest to the Government in all seriousness that it needs another man like the honorable member for Warringah (Mr. Bland), to point to places where waste occurs.Heand his colleagues on the Public Accounts Committee have been able to effect savings amounting to many millions ofpounds. If the Commonwealth is worried about finance, it should do as I suggest and examine activities where waste may occur. Wewill achieve nothing while the Commonwealth passes the buck to the States and the States pass it back again. While the Commonwealth fiddles, Rome burns. The Commonwealth undoubtedly holds the purse strings, and I believe that, in justice to the people of Australia, it should come to the rescue of the States and provide the finance that the States need.


.- I did at times find some difficulty in connecting the speech of the honorable member for St. George (Mr. Clay) to the matter nowbefore the House. However, we appreciate the tribute he paid to the Public Accounts Committee. He may rest assured that the committee will continue to be active in its efforts to reduce waste.

What the Opposition hassaid, virtually, is that higher expenditureon education is desirable. I would not dispute that. Of course it is desirable. We should do well to spend more on education. If the Australian communitiy isto be equipped with the technological - aids it requires, quite apart from all those deeper spiritual and cultural values which are of even more importance, it isessential that our educational standards should be improved. The tone of the matter raised by the Opposition suggests that the Opposition believes that the States are doing very little about this because they are unable to do any more. Some of the figures are very striking. The increased expenditure on education made by State governmentsalbeit it is in response to pressure ofthe kind which has exhibited its presence in the House this afternoon - has been very impressive in the five years since the financial year 1953-54. State expenditure has risen by 50 per cent. It has almost certainly risen, although it is difficult to find one’s way about in all these figures, by a bigger proportion than State revenues have risen. In 1957-58, the State spent on education £10,400,000 out of total Consolidated Revenue of £612,000,000. Out of their loan funds they spent something like one-fifth on education.

Let us not assume, Mr. Deputy Speaker, that Australia is doing nothing about education. The White Paper on National Income and Expenditure reveals quite clearly that of all the money spent on goods and services by public authorities in Australia £1 in every £8 is spent on education. The fact is that, while State expenditure on education has been increasing in the ten years since the Labour Government was in office, the proportion of public expenditure made directly by the Commonwealth has declined by 5 per cent., whereas that made by the State governments has risen by 5 per cent. The first point, therefore, is that the State governments have been and are responding to this problem, and they are particularly conscious of it. This pressure for an inquiry, if one looks at it in governmental terms, is virtually an invitation to the Commonwealth to inquire into the direct activities of State government departments. This field of education is not similar to the universities, in respect of which the States in fact approached the Commonwealth for financial assistance. The universities are institutions which exist quite separately and have an identity outside the State government machines. Education is administered by State government departments, and the States have a clear and complete contitutional responsibility. That fact is well exemplified in the resistance of every State government to the idea that the Commonwealth should intervene in school or technical education. Last March, the Western Australian Premier sought a Commonwealth inquiry into education. How seriously he meant it, I do not know, but he certainly received no support. If a nation-wide inquiry on education is to be made, what is to prevent the Premiers of the leading States or of any States from banding together themselves, if the Commonwealth will not agree, and undertaking that inquiry? That would be the proper way to do it, in fact.

The initiative lies squarely on the States. If the Commonwealth once started stepping in in respect of the details of education, by whatever means might be devised, it would gradually destroy the State initiative. This is exemplified in the granting of Commonwealth scholarships. Despite the increases in Commonwealth scholarships which have been made by this Government, the Opposition complains that insufficient Commonwealth scholarships are granted. As soon as the Commonwealth stepped into this field and granted Commonwealth scholarships to universities, the States seemed to forget all about university scholarships. So it goes on.

Here we see the motive of many Opposition members who see this educational issue as an ideal weapon with which to destroy the federal system with the object of centralizing everything in Canberra. This is clearly the motive behind the proposal of this matter for discussion. The total funds being granted to the States are increasing year by year and we have now adopted a formula which guarantees that they will continue to increase. It is quite obvious that, within the limits of these funds, the States have been increasing both the absolute and the proportionate amounts which they spend on education. For instance, the New South Wales Government, which only ten years ago spent 5 per cent of its loan funds on education, now spends 20 per cent, in that field. If it were argued that greater funds should be made available to the States, that argument would be, on one point, a logical argument, but it would cover all State activities. However, that is not behind the present proposal for discussion. Behind it is a desire for an inquiry on a nation-wide scale, no doubt in the hope that those who conducted the inquiry would recommend that the Commonwealth do certain specific things and make specific grants for education. When the Commonwealth makes specific grants for any one activity in a State, the initiative in and responsibility for that activity shift away from the State governments to the Commonwealth, as has happened so often in the past. Therefore, the weapon of specific grants for education is a first-class weapon with which to try to destroy and undermine the most important remaining State government function.

Mr Reynolds:

– That does not happen in respect of the universities.


– The universities are entirely separate institutions, and if the honorable member were acquainted with what goes on in university circles he would find that members of the universities do not now look primarily to the State governments and the State authorities.

In the face of this overwhelming tide, not only of population increase, but also of the desire for education resulting from the general raising of Australian living standards and the wish of parents to educate their children, things are even as good as they are, not because governments have played such a great part but because, as the honorable member for Fremantle (Mr. Beazley) pointed out, the teachers of this country have done and are doing a firstrate job. So are the parents’ and citizens’ associations. It is tragic to see the way in which propagandists have misled them and side-tracked them from pressing their legitimate and proper claims in the right quarters. They should have approached the State governments and asked them to spend more money directly, or to do whatever else might be necessary, but that agitation has been side-tracked and diverted towards Commonwealth channels, where it has no place.


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


Mr. Deputy Speaker, it is almost a historic moment when I follow in this debate such a dynamic educationist and advocate for expanding the opportunities of the children of Australia as is the honorable member for Wentworth (Mr. Bury). Nothing could epitomize better the difference between us than this discussion does. We on this side of the House look at the schools and at the children and the opportunities they ought to have. From the other side of the House, we have nothing but funds, figures, fantasy and federalism. This, of course, is the difference between the two sides of the House, and this is why the Government finds itself in a completely indefensible position in relation to education.

This is not a matter of whether the federal system established 59 years ago is to be cherished beyond all else. This is not a matter of whether the figures that the honorable member for Wentworth produced can show that, in terms of percentages, this Government is not doing too badly compared with other governments in times of past neglect. This is a matter of what we are going to do to place educational opportunities in this country on the same scale and the same priority as we have placed other aspects of national life. We on this side of the House say that there is only one authority which can possibly bring to bear the resources needed in order to solve some of the problems that have been created by nearly 100 years of neglect.

One has only to travel round Australia and take a look at the schools to see how far they lag behind the sort of thing that we want for our children, and that they should have. Look at the buildings we erect as homes and factories or as fantastic hotels! All we ask is that the same standard should be applied to the buildings that are erected for schools and educational purposes. The arguments from the government side that the Commonwealth Government has nothing to do in this field are invalid, of course, because the Commonwealth Government has a lot to do in the field of education.

The honorable member for Wentworth advanced the strange argument that the States have not asked for assistance. Jus: imagine what would happen if the Com monwealth Government to-morrow, in a moment of abstraction, decided that it would make a grant of £20,000,000 or £30,000,000 for education, and the message went out to the State Premiers. Can you see the State Premiers saying, “ We will not touch the filthy stuff “, and sending it back? They would not last for three minutes. That is shown by the demand by the people of Australia for educational facilities that was voiced at all levels, and was supported in this place not long ago by the presentation of a petition signed by 130,000 people. That is the voice of a large proportion of the people of Australia. Therefore, we on the Opposition side are not mounting any band-wagons for publicity and propaganda, but are expressing our views, first, as part of the voice of the ordinary people of Australia and, secondly, to emphasize a demand and a need of the people. Nothing has expressed this need better than a book, “If the Gown Fits”, recently published by a former- ViceChancellor of. the University, of Adelaide, Dr. A. P. Rowe. In-. a general discussion on education in Australia- and in the States generally, Dr. Rowe had. this to say -

Education is one- of the’ sufferers from the State system. Primary education could remain under the control cf the States but all other education should be a matter for the Commonwealth Government.

He outlines the history of education, and then takes the argument, into university matters and states -

The Commonwealth Government sometimes makes the pretence that it cannot interfere in university matters - which are the concern of the States. But the Commonwealth Government has interfered effectively enough in- recent years to save the universities from the disaster which apparently many of the State governments would have allowed to some upon them. During my early days in Adelaide, I was told of the danger that the Commonwealth Government would, if given the chance, interfere with university autonomy. The only unwarranted interference in university matters that I experienced came from the State Government of South Australia.

That is one point. Therefore, we- voice in this House an opinion which- is- held by a large majority of the-people of Australia. Many other matters were raised in thisdebate which one should answer here and now. The honorable member for Wide Bay (Mr. Bandidt) who has not paid us the compliment of remaining in the House to hear our answers to him, made great play on the Queensland university and the education system in that State. The fact is that Queensland is spending 63s. a head less per annum on schools than is Western Australia. Western Australia is spending 235s. a head per annum, and Queensland is spending 172s. That is a broad reflection, of the stature and type of education, thatthe Queensland. Government is prepared to. give. But there is another example which amply demonstrates how Queensland lags behind the rest of Australia. I have been supplied with figures giving the number of persons who have sat for matriculation, and these were the figures for the States last year -

How does* Queensland measure, up to- the other. States with* 2,960 sitting, for the matriculation: examination, compared with 3,200 in South Australia, which is a smaller. State with a smaller- population? It< is- obvious that there has- been- a’ serious neglect of education in Queensland in the last 100 years.

The figures I have cited demonstrate clearly that the standard of education varies from State to State, and there are great discrepancies. Any national parliament and any Commonwealth government aware of the responsibility of its members . to the people as Australians and not as Queenslanders, Victorians or South Australians, must face up to the fact that this situation exists and must do something about it. First, we say that there should be a national inquiry into education. Who else can institute a national inquiry? Can the States, acting in concert, do so? It is not likely. They have not the funds. Can the Commonwealth Office of Education? That is almost part of its charter. That is the sort of thing it could undertake; but the Commonwealth. Office of Education has been seriously neglected over the past few years.

The Prime Minister (Mr-. Menzies), who is primarily responsible, for education in this place, makes great play of how he has expanded educational opportunities. We have challenged the Government on Commonwealth scholarships. The position in relation to these was outlined’ in an answer given by the Prime Minister to a question that I addressed to him. The number of persons who have sat for the matriculation examination increased from 18,090 in 1956 to 25,930 in 1959. The number of applicants for Commonwealth scholarships rose from 8,895 in 1956 to 13,240 in 1959. What does the Prime Minister tell us? He has said that the Commonwealth has been expanding the number of scholarships to keep up with the demand. He has made great play on the provision of scholarships, but what contribution has the Government made to meet the demand for them? The answer is to be found at page 917 of “Hansard”, of 5th April, 1960. The number of scholarships available each year from 1956 to 1960 inclusive did not vary from 3,000. There was some variation in those years in the number of scholarships taken up, but the number did not vary significantly above or below 3,000. Therefore, on the very matter on which the Commonwealth Government has accepted “full responsibility - the provision of scholarships at the university level - it has failed to take up the challenge. This, of course, is particularly the fault of the Prime Ministera man who cannot make decisions, will not face his particular responsibilities “and yet is continually accepting newones and taking on more portfolios.

I do not think that supporters of the Government are fully aware of the position that the Commonwealth Government occupies in relation to education. There is a primary school at the R.A.A.F. base in Malaya, but the Commonwealth Government does not accept the real responsibility for it. The Victorian Department of Education and its chief inspectorof primary schools has to handle it. There are magnificent schools in Canberra, but this Parliament has no responsibility for them so far as education is concerned. We cannot point to any Minister in this place who is responsible. Education in Canberra is the responsibility of the New South Wales Minister for Education. The same arrangement applies in the Northern Territory. We cannot point to the Minister for Territories for the actual educational content of the schools in the Territory, because the responsibility for education there lies with the Minister for Education in South Australia. Millions upon millions of pounds are beingspent on research, on the National University and the university system in the Territories, but thereis no responsible Minister in this place who can answer directly for Commonwealth activities in education. -That is another question which, from the point of view of pure parliamentary responsibility, is important to all of us - the activities of the Commonwealth Government should be under constant surveillance and some one in this place should be answerable.


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


.- Reference has been made to the inquiry by the Murray Committee on Australian universities and I think it is fitting that the terms of reference should be repeated as a reminder to honorable members. They were -

  1. the role of the university in’ the Australian community;
  2. the extension and co-ordination of university facilities;
  3. technological education at university level; and
  4. the financial needs of universities and appropriate means of providing for these needs.

The Opposition hasbeen asking constantly for a Murray-type of inquiry into secondary and technical education. What members of the Opposition do not realize, or refuse to realize, is that the universities are independent and cannot be dictated to by any government. The desirability of the independence of universities was generally accepted by every honorable member in this House in the last session of the Parliament when the Australian Universities Commission Bill was debated. At that time, the Opposition said “ Yes “, the universities must be independent, are independent and shall remain independent”. Now the Opposition has conveniently forgotten that fact. The Murray Report was the result of a request by the universities to the Commonwealth Government to hold an inquiry. The universities had the autonomouspower to invite such an inquiry. On the other hand, this suggested inquiry into primary, secondary and technical education could only correctly stem from an invitation by the State governments and the State governments have not issued such an invitation. That is beyond doubt.

There are only nine universities in Australia. On the other hand, there are many thousands of primary, secondary and technical schools. The Opposition has asked for an inquiry on the lines of the Murray committee’s inquiry but it has not gone to the trouble of defining what sort of inquiry it should be. The Opposition has been satisfied to urge the Commonwealth Government -

  1. to institute a national inquiry to ascertainto whatextent Commonwealth assistance is required to provide adequately for primary, secondary and technical education in Australia . . .

The Opposition has not set out the proposed terms of reference. It does not say of whom the proposed inquiring body should consist. Is it to consist of representatives of the States or of a number of people drawn from industry as well as State primary, secondary and technical schools? The Opposition does not tell us. At best, this can only be described as lazy thinking, and if it is lazy thinking it is irresponsible thinking. Certainly it is not the sort of thinking that should come from the party which is regarded as the alternative Government in this country. If it is not lazy thinking, it is absolutely dishonest thinking. The Labour Party, for a number of years, has been seeking to use education as a vehicle for political attack. For a number of years it has been trying to get the horse to run but it would not run in the State sphere. Now it has been transported to the federal sphere, but it still will not gallop. Indeed, on this important occasion, the best that the Labour Party has been able to muster is one member in four to listen to the debate. The honorable member for Barton (Mr. Reynolds) and the honorable member for Bass (Mr. Barnard) maintained that a great number of interested bodies were pressing for this inquiry. But not one Opposition member has suggested that a State government was pressing for it. The interested bodies referred to may be bodies such as the State School Committees and Councils Association of Victoria which had its half-yearly conference on 26th of April this year. In the report of the presidential address by Mr. J. W. Wood, who I understand is a leading member of the Australian Labour Party in Victoria, thirteen foolscap pages are devoted entirely to the denunciation of aid for denominational schools. [Quorum formed.]

The problem in education is the population bulge. This was acknowledged by the Murray report. The population bulge has been created by two factors - immigration and the birth-rate. We would like the Opposition to state its attitude to these factors. Opposition members have already said that they want to cease migration from European countries. It is most interesting to contrast the Opposition’s attitude on immigration with its attitude in the debate on South Africa last week in which it ultimately capitulated and passed the Government’s motion on the voices. It wants to cut down migration and have no migrants from Europe.

Mr Peters:

– I rise to order! I have been deliberately misrepresented by the honorable gentleman.


– Order! That is not a point of order. The honorable member will resume his seat.

Mr Peters:

– Are you going to hear the point of order or not? If you say, “ No “, I will sit down.


– It is not a point of order to state that you have been misrepresented. I have given that ruling and the honorable member will resume his seat.


– This move by the Opposition represents another attack on federalism. The Leader of the Opposition (Mr. Calwell) has affirmed the Opposition’s committal to the socialist principle. Opposition members know that if they are ultimately to achieve socialism they must bring about the atrophy of State governments. Education is and should be a State matter. The State governments have done an excellent job in education - a fact to which the Murray report alluded. The report said that the State governments had carried on excellently in the field of education in the primary, secondary and technical fields.

If you want an inquiry into something you must know what you are hoping to find out from the inquiry. The only Opposition member to contribute anything substantial to this debate is the honorable member for Fremantle (Mr. Beazley), who told us what the problems were. If we know what the problems are, why do we need an inquiry to tell us? In regard to the advance in secondary education in Victoria, figures were given to the conference of 26th April to which I have referred, by Mr. McDonnell, the Director-General of Education in Victoria. He said that of every 100 children who entered secondary schools, in 1948, only 27 remained at school when they had reached intermediate standard in 1951; of every 100 children who commenced secondary education in 1955. only 44 remained by the time they had reached intermediate standard in 1958; and of every 100 children who commenced secondary education in 1957, 77 reached the intermediate standard. In other words, in a mere nine years, the number of children continuing to the intermediate standard increased from 27 to 77 in each 100 who commenced secondary education. These figures speak for themselves.

The State education departments know the problem and are setting about correcting it. Education should be administered at the level of government which is closest to it. The’ honorable member who introduced this debate should realize that in New South Wales there is a Department of Technical Education which is separate from the Department of Education. He also should know about the Wyndham committee. I understand that Dr. Wyndham is the Director-General of Education in N.S.W. The Wyndham committee has just completed an exhaustive inquiry into primary, secondary and technical education and the N.S.W. Government is in the process of implementing the report and recommendations of that committee. So the Opposition is merely asking the Commonwealth to set up an inquiry to supervise an inquiry instituted by the State Government of N.S.W.


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

Mr Peters:

– I wish to make a personal explanation.


– Does the honorable member claim to have been misrepresented?

Mr Peters:

– I have been misrepresented. The honorable member for Bruce (Mr. Snedden) said that the Opposition - which includes myself - had expressed itself as against European immigration.


– Order! You have not spoken in this debate so you cannot have been misrepresented. The honorable member will resume his seat.


.- This debate on education, resulting from a request by the Opposition, has contained a vast number of misrepresentations by Government supporters, the leading examples of which were provided by the honorable member for Bruce (Mr. Snedden). The most outstanding misrepresentation was that to which T think the honorable member for Scullin (Mr. Peters) desired to refer. This was the statement that the Opposition opposes im migration from southern Europe and wants to cut it out. That statement is completely false as I think the honorable member for Bruce is well aware. But he has become so accustomed to misrepresentation in the Arbitration Court that he feels he can practise it here without any answer being provided. There are a number of other things of greater importance than that to be dealt with and I do not intend to spend any time dealing with the rather facile and glib statements made by the honorable member who preceded me in this debate.

It is important to realize that, in the course of this debate as has been proved and admitted by Government speakers, the case made by the Opposition shows there is a need for a great deal more money to be spent on education in this country. No one has disputed that; Government speakers have admitted it. They have failed to answer our case and have put forward a number of things which are nothing more than excuses. The first answer they gave was that the Federal Constitution stands in the way of the Commonwealth Government answering this generally recognized and admitted need to provide more money for education. The Government takes up the position that if it is a question of the education of children or federation, it stands for federation; and if it is a case of more schools or State rights, the Government stands for State rights. I want to make quite clear to the people of this country the fact that the Opposition takes the opposite view. If it is a matter of adequate education for children or federation, we come down on the side of the Australian children. If it is a matter of increased numbers of schools or State rights, we come down on the side of increased schools. This debate has made that quite clear.

The debate has also revealed the fact that there is a problem of financial irresponsibility in the Commonwealth of Australia to-day. That problem has to be overcome in some way. If the Commonwealth Government is going to take the view that it will not make grants to the States for particular purposes, it should say to the States, without hesitation, “ We will hand back to the States their taxing powers “. But every one knows that the Commonwealth would not do that. However, it has to decide either to give the States back their taxing powers or itself tax adequately. This question of federation as a barrier to the making of grants for education, as has been pointed out by Opposition speakers, has; been no barrier to the development of assistance to university education. If this Government and its leaders had the same regard for primary and secondary education as they have for university education the Commonwealth would- have entered those fields as well.

The second answer which. has been given on behalf of the. Government is that the Commonwealth Government has contributed richly to education in Australia. In putting forward this proposal, the Opposition decided to concentrate attention on something which is the special responsibility of the Commonwealth Government, so that this can be tested. What has been the Government’s performance in relation to its very special responsibility of Commonwealth scholarships? The Minister for Immigration (Mr. Downer), gave the House some figures and said that because the number of Commonwealth scholarships made available had risen from 2,400 in 1949 to 3,100 in 1959, that was evidence that the Commonwealth had contributed richly in .its field of special responsibility. The honorable member for Wills (Mr. Bryant) gave us the other side of the picture. He told- us. that in 1956 there were 8,995 applicants and only 3,000 scholarships were available. He told us that in 1959 there were 13,240 qualified applicants and still only 3,100 scholarships were available. The position is that when the scheme was introduced with 2,400 scholarships available there were about 4,200 qualified applicants. Since then the number of scholarships has risen, by 30 per cent., to 3,100, but the number of qualified applicants has more than trebled from 4,200 to 13,240.

So, in the early stages of the scheme something like 75 per cent, of those who qualified were able to get scholarships, whilst to-day only 25 or 30 per cent, of those who qualify can obtain scholarships. In the case of Melbourne alone, for which I have exact figures, there were only two more scholarships available this year and over 1,200 more applicants than in the previous year. This proves that in the provision of scholarships the Commonwealth has lagged a long way behind the number of applicants available. It- is readily admitted by- the- Government that this problem has to be solved in some way. Yet we have had nothing but the excuses of federation and State rights put forward by the Government in’ this House day after day whenever this question has been raised. The responsibility is upon this Government’ either to say to the States, “ We will give you backyour taxing powers and you can use them for yourselves “, or to say to them, “ We will use the taxing powers adequately”.

Mr Howson:

– Do you say we should increase taxation?


– No, and neither the honorable member nor any one else does. The uniform taxing powers are with the Commonwealth and they will stay there for the rest of Australia’s history. My point is that the Government is not using those powers adequately. The figures provided officially show that in 1951-52, 26.6 per cent, of the gross national product was raised in revenue by the Government of this country and in 1958-59 that figure had fallen to 22.2. per cent. The Government has acquired, in that short period of time, 4.4 per cent, less of the gross national product in tax revenue, an amount of about £240,000,000 less.

How can the Commonwealth hope to provide adequately for the needs of the States in education or anything else when it has so far failed to live up to its responsibility of maintaining tax revenue, in view of the completely and generally recognized urgency and. importance of the provision of funds for this purpose? I want to put this straight to the Government. It. is continually passing the buck to the States. The fault lies with the Government because it has been unwilling to raise adequate revenue for things which are basically admitted to be of primary importance to this country.

Mr Howson:

– Then you do want us to raise more by taxation?


– -Yes, I do. It is no use trying to have it both ways. The Government wants to gain popularity and to be elected to office and, at the same time, dedicate itself to national development. But it cannot have it both ways. The Government cannot do that. It cannot both make itself popular and carry out its responsibility to provide funds for education and other urgent needs at the same time. In order to try to have it both ways, the Government has done its best to borrow money in every part of the world at the highest rates of interest, rather than liv& up to its responsibility of taxing- adequately in this country. Australia to-day is one of the lowest taxed countries in the world. For those people who do not’ know just what the figures are, I emphasize’ that individual taxation was £427,000,000 in 1951 and it has risen by only £20,000,000 since then; but at the same time the income on which that taxation was levied has risen by £1,500,000,000. This does two things - it encourages inflation, and’ it encourages the extraordinary rise in demand for goods which the Government says is the cause of inflation, on the- one hand; and it diverts resources away from the essentials which can only be supplied by obtaining money necessary to provide them. This is shown clearly in relation to the Commonwealth’s own responsibility. I do not want to complete my contribution to this debate on the general side, but will refer the Government back to its performance in relation to Commonwealth scholarships and show that it has provided a number of Commonwealth scholarships which has remained stable at about 3,000 for three or four years, during which time the number of applicants has increased greatly-


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


.- The honorable member for Yarra (Mr. Cairns) has made it- plain that the Labour Party still puts its blind faith in nationalization; socialization and’ centralization - a faith which is shared’ by a rapidly diminishing number- of people in the Australian community. The fact is that neither the Commonwealth nor the. States want the Commonwealth: to take over the responsibility for education within Australia. All those governments know that education can best be handled by the Government closer to the scene of operations - by the State governments. Education is peculiarly fitted for State responsibility and that is accepted by all governments in Australia, both State and Federal. The Labour Party knows that it cannot ask the State governments to sup port its case. It cannot in this, instance ask the State governments to cede their powers to the Commonwealth or to join in calling for a referendum on the matter. Members of the Labour Party know they can achieve the centralization of control over education only by devious routes - by going the long way round, or by going through the back door. That is why they advocate a general national inquiry into education. If the inquiry were held, and if it resulted, as- one would assume, in a general request for more financial assistance for primary and secondary education, the only way in which the Commonwealth could ensure that the money would be used by the States for that specific purpose would be to make a specific grant for primary and secondary education. If the Commonwealth acted in any other way, such as- by altering the proportion of its tax reimbursement grants and indicating to the States that a part of the. grants must be used specifically for educational purposes, the States could thumb their noses at it. The money would have to be tied to that purpose, and that would mean the transfer from the States to the Commonwealth of control over education. The Labour Party seeks to achieve, the centralization of control over education by that means.


– Order! The time allotted for the discussion of this matter under Standing Order No. 92 has expired.

page 1295


Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Harold Holt) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant financial assistance to the State of South Australia.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Downer do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Treasurer · Higgins · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to authorize the payment to South Australia in 1959-60 of a special grant of £1,027,000, representing a final adjustment of the special grant received by that State in 1958-59. Payment of this grant has been recommended by the Commonwealth Grants Commission in a special report which has been tabled to-day.

At the Premiers’ Conference, in June, 1959, the Premier of South Australia gave an undertaking that, unless exceptional circumstances arose, his State would not apply for a special grant during the currency of the new revenue grant arrangements. In accordance with this undertaking, South Australia withdrew the claim which it had previously lodged for a special grant for 1959-60. Under the Commonwealth Grants Commission’s procedures, however, part of the special grant recommended for a claimant State in each year is an advance payment which is subject to final adjustment by the commission when the actual budget results of that year are reviewed. Thus, at 30th June, 1959, there were outstanding, in respect of South Australia, claims for adjusting grants in respect of the years 1957-58 and 1958-59. It was agreed at the conference that these claims should be considered and reported upon by the commission.

South Australia’s claim in respect of 1957-58 was dealt with in the commission’s last annual report and payment of an adjusting amount of £399,000, recommended by the commission, was authorized by the States Grants (Special Assistance) Act 1959. In the normal course, the final adjustment of the special grant for 1958-59 would not have been dealt with by the Grants Commission until next financial year, which would have meant that South Australia would have been receiving a special grant two years after it had agreed to become a non-claimant State. To avoid this, the Government asked the commission to forward its recommendation on South

Australia’s claim in respect of 1958-59 in time to enable any legislation required to implement the commission’s recommendation to be considered by the Parliament during the current financial year.

South Australia submitted a claim for an adjusting payment of £1,027,000 in respect of 1958-59, this being the amount of its budget deficit for that year. For the reasons set out in its report, the commission has now recommended that South Australia’s claim be met in full.

The Government considers that the commission’s recommendation is reasonable and that it should be adopted. I therefore commend the bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1296


Second Reading

Debate resumed from 28th April (vide page 1239), on motion by Mr. Harold Holt-

That the bill be now read a second time.


.- The purpose of the International Monetary Agreements. Bill is to strengthen our London reserves. Nothing retards development more than violent fluctuations. The amount of Australia’s exports fluctuates a good deal, due largely to climatic conditions - to bad seasons - and to our great dependence upon primary products. It is notorious that the prices for primary products fluctuate most violently. While in one year we have a quite substantial surplus of exports over imports, in another we find that our imports substantially exceed our exports.

In the past, the means of adjusting these fluctuations has been by building up London funds. During the last ten years, those London funds have fluctuated from an amount as high as £800,000,000 to a sum as low as £300,000,000. When we realize that our imports are now approaching a value of £1,000,000,000 a year, we must appreciate that London funds amounting to only £300,000,000 are totally inadequate and make us very vulnerable in relation to the purchase of the imports which are necessary to our essential industries. So over the last ten years, we have seen occasions when it has been necessary for the Government to take emergency action by the imposition of import controls to protect our overseas funds and to enable us to import the goods which are essential to our economy.

Honorable members will remember that the Government of Great Britain, a few years ago made it perfectly clear that if Australia used up her London funds she could not expect an overdraft to enable her to purchase her essential imports. The purpose of this bill is to provide a second line of reserves. Not only are we to have our London funds upon which we can call in time of emergency, but also we are to have a substantial calling power on the International Monetary Fund. This will be of tremendous aid to our economy. It will provide security and will enable our manufacturers to plan ahead, knowing that it is unlikely that import restrictions will be turned on and off like a tap.

After this bill becomes law we shall have sterling and dollar reserves of approximately £547,000,000, and a calling power on the International Monetary Fund of £211,000,000, giving us reserves totalling £758,000,000, an amount which is almost sufficient to enable us for one year to purchase essential imports without exporting anything. The Government will be able to carry out its policy of development, stability and full employment. Development necessitates looking ahead. If an industry finds that its essential raw materials have been cut off by import licensing controls, it cannot plan its operations adequately, but if industry knows that we have adequate reserves in London and with the International Bank, it will feel secure in the knowledge that essential imports will be procurable at all times.

Licensing and import controls create instability in industry. When this bill becomes law, industry will be able to plan ahead. I believe that we shall see even greater development in the future than we have seen over the last ten years. Controls must force costs up. Licensing means that industries and people who desire raw materials for the manufacture of their products are unable to get them in adequate quantities, and so the available or permitted goods have to be rationed among the various organizations which require them. That means that some industries will have to use more expensive commodities than they would use if licensing did not apply. If we can remove licensing control and not have to reimpose it, in the long run we shall reduce costs, lt is only by free competition and by the availability of goods to enable our industries to produce at the lowest possible cost that we can reduce prices.

Industry has nothing to fear from this bill. This Government has adopted a policy of adequate protection for worthwhile secondary industries after independent inquiry by the Tariff Board. If we have sufficient overseas funds and if licensing controls are removed, industry will be able to produce its goods at the lowest possible price.

I am amazed that Labour is opposing this bill. One would have thought that the Labour Party would be in favour of a policy of full employment. This Government believes in full employment and has taken the necessary steps to achieve that objective. While you have violent fluctuations in the market and import controls being imposed one year and removed another, you will never be able to provide stability of employment. One would have expected the Labour Party to be in favour of a reduction in costs and prices. Yet every measure which this Government introduces in an endeavour to reduce costs and prices is opposed by the Labour Party. Obviously, if we have adequate overseas reserves and if we are able to import our raw materials at the lowest possible price, we shall check rising prices and eventually bring about a reduction in costs. So one can only ask why Labour has opposed this bill. The only and obvious answer is that Labour loves controls and pushing people about so much that it hates to see the abandonment of import controls.

Apparently the Labour Party is prepared to sacrifice the benefits which would accrue to the workers - full employment and stability - because of its lust for controls and restrictions. When Labour was in office during the war and in the post-war years it maintained a policy of stringent and strict controls. Honorable members will remember that everything was rationed. Most things were under the counter. Under Labour, you had to go on your hands and knees to buy the things that you needed. When this Government came to power, controls were removed as fast as it was possible to do so. Some had to be reimposed because we did not have sufficient London funds, but at the earliest opportunity the Government freed the economy and removed controls on the great majority of commodities which we import. So today we see full employment, high prosperity, free competition and a vastly improved standard of living.

Mr Cope:

– Free competition - that’s a joke!


– There -was no free competition under Labour nor would there be if it were still in office. The Labour Party loves controls. It must control everything and everybody. To-day we see the only possible reason that Labour could have for opposing this bill. It wants to control the lives of people and push people about. This bill has everything to commend it. It will give stability and enable a reduction to be made in costs. It will. provide freer competition and add to the prosperity of the whole country. I commend the bill to every honorable member.


.- The proposal before the ‘House is -

To increase Australia’s International Fund quota from 300,000,000 dollars to 400,000.000 dollars.

Borrowing from the International Monetary Fund is purely to meet fluctuations in our balance of payment position - fluctuations in the ratio of earnings to payments from year to year.

What is really involved :in this bill is not a general borrowing programme but the ability to borrow for a short term during a crisis in our balance of payments situation.

These statements were made by the honorable member for Wentworth (Mr. Bury) who is .the Government’s expert on international finance. Does the honorable member or the Government anticipate a crisis in our balance of payments which it will not be able to meet by long-term loans or by the 300,000,000 dollars that we already have in the International Monetary Fund?

Mr Wilson:

– You cannot get loans when there is a crisis.


– My friend from Sturt says that it is not possible to get loans when there is a crisis; and of course the

Government anticipates that crisis. I also anticipate a crisis, and anybody who knows the position in connexion with our trading with overseas companies since this Government came into power anticipates a crisis. What is the position? Li March, last year, I asked the Treasurer: What were the balances of payments of .Australia for the ten years from 1950 to 1959? And this is what he told me: In that period of ten years, Australia’s adverse balance of payments was £1,056.000;000. This means that during the period of ten years, we spent overseas for every man, woman and child £105 more than we earned or received.

Can this position continue indefinitely? What happens when a country like Australia spends or receives -.from its exports £7;000,000;000 in ten ‘years - about three times as much as it received in the previous 50 years of its history? Of course this was in no way to the credit of this Government but was the result of record crops and record prices overseas and the absence of drought and bad seasons. We received for our commodities overseas more in .that ten years than we received in 50 years previously. But during that period we spent £1,050,000,000 more than we received. How did we finance this expenditure? Of course, it was by the reduction in our overseas payments. When the Menzies Government came into office the then Treasurer, Mr. Arthur Fadden, who has since retired from this Parliament, pointed out that there was about £700,000,000 in our overseas fund. A little later he was able to report that, as a result of the activities of the previous Chifley Government, the fund stood at £850,000,000. But that amount has now been depleted by more than £300,000,000.

But not only has that happened; Australia. has also borrowed .from. every country from -which it could borrow in order to meet some of its outstanding liabilities. On 26th February last year, I asked the Treasurer how much we had borrowed, up to that date, since the inception of the Government. He replied that we had borrowed 300,000,000 dollars from the International Bank, about 200,000,000 dollars from New York, 120,000,000 dollars from Switzerland and huge amounts from Canada and London. Of course, the important point to remember is - that as Australia . continued borrowing the rate of interest went up. The first loan of 100,000,000 dollars from the International Bank of Reconstruction and Development was issued in August, 1950, at par with interest at 4i per cent. In December, 1956, -we borrowed 50,000,000 dollars from the same source, issued at par but the rate of interest was 4$ per cent. From New York we borrowed 25,000,000 dollars, the issue price being £99 and interest at 3£ per cent. That was in December, 1954. In October, 1958, when we borrowed another 25,000,000 dollars, the issue price was £97 10s. and the rate of interest 5 per cent. In July, 1952, we borrowed from London £11,800,000 sterling, issued at £98 with interest at 4£ per cent. In October, 1958, when we borrowed another. £15,000,000 sterling from London the issue was at £98, but the interest rate was 5± per cent. Earlier that year, in February, 1958, we borrowed £16,000,000 sterling in London at an interest rate of 6 per cent., the issue price being £99 10s. The position was that our overseas funds were depleted and we borrowed these sums of money.

Mr Wilson:

– Would you have reintroduced petrol rationing?


– Before I sit down I will tell the .honorable member what a “Labour government would have done. The question I ask is: What will happen in the foreseeable future? Will there be an increase .in our overseas funds, or will there be a reduction in our borrowing overseas because we are going to export from this country .at higher prices, a. greater quantity of commodities than we have exported during recent years?

Mr Wilson:

– Of course we will.


– Of course we are going to export more, my friend says. This is the position in connexion with exports: In 1950-51, we exported £975,000,000 worth and in 1958-59 our record was £809,000,000 worth. In 1957-58, it was £812,000,000, and in 1956-57 it was £978,000,000. Therefore, as the honorable member will see, the value of our exports is not increasing. It is diminishing in existing circumstances, and if prices overseas deteriorate and if, as the honorable member for Sturt himself pointed out, we have bad seasons - if we have a drought,, a near drought or a partial drought - the value of our exports will diminish considerably.

Mr Wilson:

– :That is what we have the reserve for.


– That is -what we have the reserve for, says the honorable member. Our overseas reserves have also been dissipated to the extent of £400,000,000. As I pointed out, we have borrowed overseas about £600,000,000. We shall, of course, have to borrow more overseas. During the past five years, our adverse -trade balance has increased at an average of £150,000,000 annually. Will it average less during the next five years? Of course not! It will average more.

Honorable members will recall that in 1952, owing to the actions of the Governmnent in 1951, there was a vast influx of imports - such a vast influx that 100,000 people in Australia were unemployed, and our overseas balances -were endangered. So the Prime Minister went to the microphone and told the public that . the Government had . to impose panic restrictions on imports. There had been imported, in a period before the imposition of these restrictions, £1,050,000,000 worth of goods as a result of the Government’s policy. of encouraging imports. In 1956-57, we exported .£978,000,000 worth , of goods, and in that .year we had a favorable trade balance of £89,000,000. That was the only year in that period of five years in which the. trade balance was in favour of Australia. What I wish to, point out is that when we relaxed import restrictions again in. 1956 our adverse trade balance increased because we took in more imports. It is obvious, if you relax import restrictions, or lift them altogether, that that is what will happen.

Why do we lift import restrictions? As the Government says, we lift them in order that there shall come into this country a lot more goods than previously and by that means, ‘says the Government, we shall reduce the prices of commodities in Australia and so attack inflation. So in the future, as a result of the relaxation of import restrictions now, there will be a flood of imports, and during the next five years, instead of having an adverse balance of payments averaging £150,000,000 a year we shall have an adverse balance averaging at least £200,000,000 a year. If that position arises, what have we to do about it? We shall again have to raise loans overseas. Another £1,000,000,000 of loans will have to be raised overseas under worse and worse conditions as regards interest rates and the rate of insurance. That is what is going to happen, and of course the Treasurer or somebody may rise in this chamber and say: “ Oh well, what does that matter? If we raise money overseas and with it we achieve in this country an increase in productivity which will enable us to pay instalments and interest on the loans raised overseas, we are not only not doing any harm to the country, but are improving the outlook.”

Sitting suspended from 5.50 to 8 p.m.


– Before the suspension of the sitting, I pointed out that the purpose of the bill was to increase our International Monetary Fund quota by 100,000,000 dollars so that we could borrow from the fund in a period of crisis. Such a crisis would arise if we had an adverse balance of payments; that is, if we bought abroad much more than we sold abroad. All the bill does is to extend our interest in the International Monetary Fund by 100,000,000 dollars, or £50,000,000. During the ten years that this Government has occupied the treasury bench, our adverse trade balance has increased by £1,056,000,000; that is to say, the goods we have bought abroad have been worth £1,056,000,000 more than the goods we have sold abroad. During that period, we have exported more than £7,000,000,000 worth of goods and the amount obtained for our exports has been three times greater than the total amount we received for our exports in the previous 50 years.

This process is a process of borrowing money abroad to pay into the International Monetary Fund so that at some future date we will be able to borrow it again. What will this do to stabilize our economy? What does the future hold? Will there be a reduction in our adverse balance of payments? During the last five years, our adverse balance of payments has averaged £150,000,000 a year. We have every reason to expect that during the next five years the amount will be much greater. If we export similar quantities of goods, and if we obtain similar prices for them, we will be lucky if, in the next five years, our adverse balance of payments does not increase at the rate of £200,000,000 a year, or £1,000,000,000 for the five years. When that happens, we will have to borrow abroad. We have borrowed abroad during the last ten years from the International Bank, from Canada, from London and from America in order to meet our overseas liabilities.

What happens when we borrow abroad? The amount borrowed does not come here in the form of pounds from England or dollars from America; it comes here in the form of goods. If the goods add to our productivity and the additional goods produced are sold abroad in sufficient quantities to pay the interest on the debt and an instalment on the principal, no harm is done. That is good enough business. The principle that would then apply would be, the bigger the business the better the overdraft. But how do these loans come to Australia? They come in the form of textiles, in the form of confectionery and jewellery from Switzerland, in the form of thongs, shoes and manufactured light machinery from Japan and elsewhere, and in the form of luxury goods from Italy, Germany and the United Kingdom. These goods can and are being made in sufficient quantities in this country to meet all our requirements. The goods that are brought here with this borrowed money do not add to our capacity to produce and do not increase the quantity of our exports and so help to pay our debts; but instead they endanger the stability of industries and reduce opportunities for employment in Australia.

Mr Mackinnon:

– What about heavy machinery that is imported? That is not made here.


– Yes, I agree that the import of heavy machinery that is needed here does aid our development. However, the proof of our development is an increase through the years in our exports. I gave figures on this before the suspension. I showed that exports were not increasing, but were in fact diminishing and that they would not increase in the near future. The price obtained for our exports and the quantity of our exports must be maintained. This has been done in the past only because we have had good seasons, and we cannot expect these good seasons to continue. We must face the fact that in the immediate future the price and quantity of our exports will fall.

Although this seems to be the immediate prospect, we are in a position where we must increase our exports spectacularly, because the Government has now lifted the restrictions on imports, lt is no good removing these restrictions if imports do not increase because the Government’s intention in removing the restrictions is to lower the price of Australian-made articles sold on the local market. But if our imports increase to such an extent that this objective is achieved, the deficit in our overseas balance of payments will grow at an increasingly rapid rate.

Mr Anderson:

– You must have finance for imports.


– The honorable member for Hume says that our exports must finance our imports. But what I say is that we cannot finance our imports by exports because we have not sufficient exports. The importation of goods will be encouraged when our International Monetary Fund quota is increased by 100,000,000 dollars. That encouragement is contrary to the best principles of Australian finance and to the best interests of the economy of this country. Some honorable members on the other side of the House, however, may say that other things come to this country - that capital from other countries comes to Australia. They may point to the capital brought here by the General Motors Corporation from the United States of America in order to finance General Motors-Holden’s Limited, and to the capital that has been enticed to this country by the visits overseas of the Lord Mayor of Sydney and of the Victorian Premier.

Mr Anderson:

– What about the visit overseas by the New South Wales Premier?


– I have already mentioned New South Wales by referring to the Lord Mayor of Sydney.

How is capital brought to this country? If anybody in the United States wants to invest money in Australia, what does he do? He goes to an American branch of an Australian bank and says, “ I want in Australia the equivalent of 100,000 dollars”. The bank says, “ Very well. For expenses, you can have that.” As a result, £50,000 or thereabouts is made available for that person in Australia and he then invests it in a particular existing industry in Australia or buys machinery and starts another industry. Then the bank makes available the equivalent of the 100,000 dollars that it has in the United States to enable its clients in Australia to import what they want to bring into Australia. And the importers determine how the capital comes into this country. Those who bring the capital in say, “ Out of what can we make the greatest profit? “. They may decide that they can make it on textiles, on machinery, on boots, on confectionery, or on various commodities that are already being manufactured in Australia. However, that does not deter them. Over to this country for the production of textiles or other goods already being manufactured in sufficient quantity in Australia comes capital that is supposed to be used in order to promote development and expansion of the economy. As a result, Australian industries are retarded or destroyed and men are put out of work.

I challenge the Treasurer to explain exactly what happens if that is not so. I challenge him to explain away, too, the fact that we are already accumulating at increasing rates of interest loans from overseas that ultimately will have to be repaid. If prices have depreciated when those loans have to be repaid, we shall pay, in terms of production and man-power effort, more in repayments, apart altogether from interest, than we received in loans. That is obvious. So I say, Mr. Speaker, that this country has to have a policy for ensuring that the goods brought into Australia are goods that cannot be manufactured here and that imported capital is not used for the import of goods that are already manufactured here in sufficient quantities. Goods and capital imported into Australia must be goods and capital that will promote expansion and development of our industries and of export trade. We shall not achieve that objective by encouraging unnecessary imports and precipitating a crisis due to- adverse’ trade balances. Nor shall we get out of the difficul ties that confront this country by increasing our quota- in the international Monetary Fund’ in order to meet an expected crisis in1 respect of our trade balances. In respect of international transactions and overseas trade, this Government adopts a policy of borrow or bust. Ultimately, the reckoning must come. Any businessman who applies to the financing of his day-to-day operations and any family man who applies to the day-to-day activities of his family the principles applied by this Government will see at once how erroneous and disastrous they are.

For these reasons, the party to which 1 belong is quite, right in opposing this bill, which provides for an expected crisis caused by an adverse balance of payments. If that is not the purpose of this measure, why provide for an increased quota in the International Monetary Fund? If the Government does not wish to provide against a crisis in our balance of payments, would not our existing quota of 300,000,000 dollars enable us to meet the difficulties that lie ahead?

Mr SPEAKER (Hon John McLeay:

Order! The honorable gentleman’s time has expired.

Wide Bay

.- Mr. Speaker, the most remarkable thing about this bill is that the Opposition opposes it: We have heard quite a deal about what the late Mr. Chifley had to say in the debate on the International Monetary Agreements Bill 1947, and perhaps I, too, may quote some of his words. As reported at page 591. of volume 190 of “Hansard”, on’ 13th March, 1947, Mr. Chifley said-

Our drawing rights would total about £A.65,000,000. This would constitute an addition of that amount to our international exchange reserves, and would be available if our overseas funds should run down for instance, as the result of drought. It would also assist overseas loan obligations in times of difficulty. Australia would be entitled to draw foreign currencies from the fund at a rate not greater than 25 per cent, of the quota in a twelve-months period. Under certain conditions, and with the consent of the fund, we could draw on the pool beyond these limits.

Precisely what Mr. Chifley said has been repeated in this debate. The proposal to increase- our share in the International Monetary Fund is made for the very reason that he stated in 1947.

Perhaps it would be well for us to consider how the fund, came about in the first place. I think it will be remembered that the end of lend-lease between the United States of America and other countries brought about a crisis, particularly for Great Britain, which was a debtor nation at the time. On the eve of Japan’s defeat, Great Britain was expending abroad at the rate of £2,000,000,000 sterling per annum and receiving about £800,000,000 sterling per annum. That could not go on. The United States made a loan of £4,400,000,000 to Great Britain on the basis- that she should ratify the Bretton Woods Agreement and become a member of the International Monetary Fund. Great. Britain had hardly any alternative. Her export trade at the time was less than one-third that, of pre-war, and there was deterioration in her capital position of about £4,500,000,000. In fact, if she had not complied with the terms of the United States, Great Britain could have carried on for perhaps- only about, a. year. So it is not surprising that something be done, and the Bretton Woods- Agreement which constituted the International Monetary Fund served- that- very purpose.

The objects of the fund are stated in the Melville report on the Bretton Woods conference, No. 13B of 1944. I do not propose to read the objects ot- the fund in detail but I think I should remind honorable, members that the purposes of the fund were to promote international monetary cooperation through a permanent institution, to facilitate the expansion and balanced growth of international trade, to promote exchange stability, to assist in the establishment of a multi-lateral system of payments, to give confidence to members by making the fund’s resources available to them under adequate safeguards, and, in accordance with the above, to shorten the duration and lessen the degree of disequilibrium in international balances of payments. These conditions in fact do still apply. The purposes of the International Bank for Reconstruction and Development include this objective -

To assist in the reconstruction and development of territories of members by facilitating the investment’ of capital for productive- purposes, including the restoration of economies destroyed or disrupted by war . . .

Those, purposes still apply to a degree. I remind honorable, members on the Opposition side that . if. by chance they do not like this idea of an: International Monetary Fund and an International. Bank, perhaps they could foster the idea. of. withdrawal because -

Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal office. Withdrawal shall become effective on the date such notice is received.

That provision for withdrawal applies equally to the International Monetary Fund.

I have not heard any suggestion from the Opposition that we should withdraw from this fund. It is quite obvious why the bill has been introduced. Mr. Chifley had something to say about this matter also, as reported at. page 592 of,” Hansard “ of 13th March, 1947, when he- said -

Our major primary industries and all their related trades and services depend upon the: sale of proceeds of’ our exports; while much other economic activity depends upon the flow of imports.. It is a point too often overlooked that a great part of Australia’s secondary industry relies upon imported materials, equipment and some processed goods, and this need will grow as secondary industry expands.

Mr. Chifley laid the basis for this action; in fact, it might be said that he laid the basis at that time for the- bill we are now discussing. It might be of- interest also to consider, what the present Acting. Prime Minister (Mr. McEwen) had to say in March, 1955, when he addressed the. Victorian Chamber of Manufactures. The Minister said then -

In this sound and rapidly expanding country it would be healthy to supplement our export earnings with- substantial overseas borrowing to meet part of our cost of development.

Canada is expanding and prosperous on exactly those terms. However, whereas Canada has ready access- to great American capital, the nonconvertibility of the dollar and geography combine to prevent any comparable inflow of dollar investment into Australia. And the United Kingdom just doesn’t have the investment capital to spare these days.

That was in 1955. Since then, the situation has changed completely, and the hope that was implicit in the. Minister’s words then has now been realized. At that time, there was no’ chance of an improvement in capital inflow. To=-day, as. the honorable member for Melbourne Ports (Mr. Crean) has told us, the capital inflow is about £200,000,000 a year. Australia is attracting. investment, from overseas and, in fact, we are now proceeding, along, the lines of Canada’s’ development: It’ is interesting to note that although Canada has received from: the United States of America at least six times as much capital as has Australia; only recently the Canadian Minister directly concerned with these matters said that Canada welcomed capital from the United States of America.

Mr Peters:

– Canada is refusing to accept it now.


– Canada has welcomed capital from- America and is- continuing to welcome it. Capital is not something to be. sneered. at,, as members of the Opposition would have, us believe. Capital is very desirable,- and although the honorable mem? ben for. Melbourne Ports spoke, about the unidentified capital inflow,, the fact is that all the capital coming to Australia is being put to very good use. The difficulty, as has been explained, so. often, is that our exports are subject to violent- fluctuations; Over’ four-fifths of our exports are derived from primary industries, and it is obvious that drought or falling prices affect our exports very considerably.

In addition, we are faced with the fact that this, is a cold, hard world,’ and some of the big countries overseas have indulged consistently in a policy of protection - particularly agricultural protection. Therefore, Australia is faced with the possibility of having to compete with countries which will pay their primary producers 27s. 6d. a bushel to grow wheat and will sell the surplus on foreign markets - because it is overproduced - at half, that price; or we may have to compete with a country which pays the equivalent-in Australian currency of 6s. or 6s. 2d. (Australian) per lb. to produce butter and sells the big surplus on the British market at 2s. 4d. It is hopeless to compete continually, with such products but, as I have said, it is a. cold, hard world and we are faced with the facts.

We have been told in- this debate that Australia’s credit balance overseas at present is about £550,000,000, and that if this measure is passed, as it will be, our borrowing power from the International Monetary Fund will be increased by approximately £200,000,000. We might say that we shall then have a drawing power, or an available reserve, of about £750,000,000. I submit to honorable members that we need a reserve or a reserve drawing power of at least £1.000,000,000 and, therefore, we still have some way to go; but this bill will take us approximately £100,000,000 towards that desirable goal. However, the present position is not hopeless; in fact, there is a ray of hope, as has been reported in the Brisbane “ Courier Mail “, which stated on 3W> April -

The cash deficit of the Budget was likely to be smaller than the £61,000,000 estimated when the Budget was brought down last August, the Treasurer (Mr. Holt) announced yesterday.

Another gentleman well known to members of the Opposition - the Governor of the Reserve Bank, Dr. H. C. Coombs - was also reported to have said that there had been some steadying up of the inflationary pressure in Australia, and he added -

The present position reflected some of the results of the official credit policy. “Until eight or nine months ago we were pursuing an expansionary policy. We have been slowing down, and this has been restraining the economy “.

The lifting of import restrictions was beginning to have a salutary effect upon inflation as well.

I have no doubt that members of the Opposition are quite happy to have that assurance from Dr. Coombs that the lifting of the import restrictions is beginning to have a salutary effect on inflation. In his opinion, things are not too bad at present. If we look at the “ Treasury Information Bulletin” for April, 1960, we find that from July, 1958, to March, 1959, recorded exports were valued at £588,000,000. and in the corresponding period of 1959-60, the fi eu re rose by £125,000,000 to £713,000,000. Against that figure, recorded imports rose from £589.000,000 in 1958-59. by £83,000,000 in the same period of 1959-60. So while we have had an increase in exports of £125,000,000 compared with a year previously, we have had an increase of only £83.000.000 in recorded imports in the same period. I would maintain that this is a very satisfying position. However, although at the moment we cannot be unduly worried about the financial position because our exports are beating our imports, we have to face the fact that we live in a world in which various things could happen. Even Mr. Chifley conceded, at one time, that our exports could drop in value. No one can guarantee that wool will stay at an average price of 59d. per lb. or thereabout, and anything can happen to other exports. Therefore, it is essential that a country at our stage of development must take prompt precautions. This bill is designed to ensure, to a degree, that precautions are taken.

We live in a time of rising costs, particularly for primary products. When primary production is so important to our export earnings we cannot overlook the fact that farming costs are rising while, at the same time, the return per unit of production is dropping. It is obvious, therefore, that this measure is introduced at a time when we still have quite a deal of money in our pockets - about £750,000,000 to be exact. But we are trying to take great care of the future. Therefore, this bill is introduced in order to give us a degree of certainty so far as our future is concerned.

HigginsTreasurer · LP

– in reply - Like others on this side of the Parliament, I have been amazed at the attitude displayed by members of the Opposition to this bill. If ever there was a bill which one would have thought, from the outset, would have enjoyed the support of all sections of the Parliament, this is such a piece of legislation. It is designed to strengthen Australia’s stability internationally, to assist us through the problem which occurs in a country of substantial exports where varying prices, through factors outside our own control, operate from time to time, and to see us through situations in which those fluctuations affect Australia’s balance of payments.

As one who had a significant part to play in seeing that Australia was recognized in the matter which enabled us to bring this legislation forward, I am frankly astonished. I feel that the only explanation that one can offer for this extraordinary performance on the part of the Opposition is that, lack’”” a constructive or coherent policy of its own, it has come to the conclusion that the role of the Opposition is to oppose, whether it knows what it is opposing or not. I cannot seriously believe that anybody who knows what is involved in this legislation could bring himself to oppose it, having regard to Australia’s best interests. Indeed, [ say that members opposite who talk about this Government’s policy as being a programme of “ boom or bust “ are doing a great disservice to Australia.

All the facts support my contention in this respect. I challenge Opposition members to tell me any country in the world which has a higher credit rating internationally than has their own country of Australia to-day. No country outside of North America can go into the New York market and borrow on more favorable terms than can Australia. No country enjoys a higher credit rating around the world at this time than does Australia. Why do honorable members opposite seek to sabotage the best interests of their country? It is the proud record of Australia that, irrespective of the difficulties which we have experienced in good seasons or bad seasons, with high prices or low prices, never in its history has this country defaulted in its commitments on overseas loans.

Why should honorable gentlemen opposite try to create some doubt, uncertainty or alarm in the minds of people overseas who have seen fit to invest in Australia, either by way of loan to the Australian Government or through an industrial venture, money which otherwise they might have disposed of in other directions? Fortunately, although international money markets are sensitive and although those who operate in them study utterances and developments in countries in which they might invest, people overseas have sized up the situation inside Australia. They know that there is an unparalleled degree of political and economic stability in this country. The honorable member for Melbourne Ports (Mr. Crean), who led the debate for the Opposition, quoted from a January, 1960, article in the “ Australia and New Zealand Bank Limited Quarterly Survey “ in order to bring a point or two home against the Government. But let me quote one or two other passages from that same article which do not run so kindly for his point of view. The article states -

The underlying need for international borrowing by Australia arises from the sustained demand for capital expansion of all kinds, which cannot be satisfied by the savings of the Australian community, high though they are.

Australia occupies a happy position in the New York market. In the golden age of U.S. foreign lending, from the outbreak of World War I. to the Depression, Australia received about 7 per cent, of the proceeds, which was considerable in relation to her size. The sequel to this great flow of loans, which was not lost on American investors and underwriters, was that Australia was one of the countries to meet its obligations fully and on time, by contrast with widespread defaults by many borrowers during the Depression and World War II. Thus, Australia was the first foreign government (apart from the special case of Canada) to raise a loan in New York after World War II., borrowing 20,000,000 dollars in 1946. Australia has raised other dollar loans since, apart from being one of the largest borrowers from the World Bank.

Again, the same article states -

The most effective appeal to U.S. investors is probably on the ground that Australia enjoys rapid growth within a stable economic and political environment . . . An important attraction is that Australia not only constitutes a valuable market in itself, but provides the base from which nearby Asian markets with half the world’s population may be supplied, often on more economical terms than they can be supplied from the U.S.A.

I repeat that the investor overseas is a hardheaded character. If one-tenth of what we have heard from honorable gentlemen opposite in the course of this debate were true - that this is a profligate government and that it is footling away the money it raises overseas - then we would not enjoy a credit rating which enables us to borrow the money that we need for our capital development on even more favorable terms than those obtained by governments of West Germany, France and other European countries. Indeed, our credit rating is such that the terms on our most recent American borrowings have been more favorable than those on which we borrowed last September. I say that honorable gentlemen opposite are giving no true representation to Australia when they seek, in these circumstances, to hold us up in the eyes of the world as a people and a government that are not able to use wisely the funds which come to us for our development.

Of course, all the facts of Australia’s expansion in this last glorious decade point in the contrary direction. Of course, we have had high borrowing. That has been the situation in any developing country in the history of the world; but that borrowing has been represented, as has the foreign investment here, by a growth in Australia’s productivity and. assets, a growth which, as I shall show in a moment, has enabled us to expand the proportion of our manufactures and has enabled us to absorb well over 1,000,000 new settlers in this country and increase enormously the range of Australian manufacturing industry and develop in this country’s technical capacity capital equipment which makes Australia a country nowadays able to sustain the swings which occur in finance as the result of some seasonal factor at home or fluctuation. of. prices overseas. ,1 have listened with, an astonishment which does not come readily after many years in this place to statements on the part of honorable gentlemen .opposite which, frankly, I .cannot i pretend to explain.

Let me mow deal with some of the particular criticisms in detail. The first criticism made by honorable members opposite is that Australia is bridging the gap between payments for imports and invisibles and export receipts by capital inflow, and the answer is that if all countries balanced their exports and imports there would be no flow of international capital and the more mature economies of the world would not be able to assist the less-developed nations by making resources available to them. It should be recalled that the great capital exporters of to-day, such as the United States were -once net capital importers. “They had to borrow at the time of their growth and -expansion, and now they are strong enough to lend and assist the expansion of others. And other foreign countries, which are making rapid strides in economic development, are just as dependent as is Australia on capital inflow. No one suggests that Canada possesses a weak economy. It is one of the most prosperous countries in the world to-day, yet it is a ‘heavy capital importer and so is South Africa, again one of the strong economies of the world at the present time. Since the end of the war Australia has been passing through a phase of rapid economic development.

The policy of honorable gentlemen .opposite is that higher levels of compulsory savings should be forced on the Australian people by penal rates of taxation. Of course, they want to impose penal rates of taxation. ‘.But they ‘have not learned the lesson- that that is one way of depressing incentive and removing the spur which makes for greater production and efficiency. Our method is different.’We try to stimulate savings and maintain a tax structure which encourages savings to be invested in Australian industry; and unless that had been done it would clearly not have been possible to maintain development at the rate we have witnessed without private capital investment from overseas. Overseas investment has, in point of fact, played a considerable part in the rapid growth of the industrial sector of our economy. It has not been a substitute for our own savings but has provided a very welcome supplement to them. But it would be wrong to assume we are now relying entirely or even primarily on overseas capital to develop Australia. To take the latest year for which I have the figures immediately available, in 1957-58 the total overseas private investment in Australia amounted to about 10 per cent, only of the gross private investment in this country. Our own savings represented 90 per cent, of our gross investment. The rest was a useful addition of 10 per cent, to it, which added some jam to the bread and butter, but we provided the bread and butter for ourselves.

Australia is still basically a primary producing country, and .over 80 per cent, of our export receipts come from wool, wheat, dairy produce and other primary products. Like other primary producers we are subject, to adverse swings in our export receipts due to ‘economic conditions overseas and bad seasons .at home; and in order to give a greater stability to our economy and increase our standard-,of living it is necessary to diversify -our production by developing our secondary industries. To do this we must attract private investment from overseas. Such investment pays -for imports of equipment and technical knowledge without which our secondary industries could not hope to compete with the products of the advanced industrial nations. The alternative to capital inflow is to reduce these imports, lower our standard of living and, as the Prime Minister recently commented, return, to the days when people thought that “ Australians had to hew wood and draw water, and grow, wool and; leave . the. manufacturing to. people who. understood it “. That; fortunately, is not our situation atthis time.

The industrial process depends for its success on innovations, the development of new techniques and new processes. Overseas investors have introduced many of the new items in Australia’s range of manufactured products made for the first time since the war. These new products include motor vehicles, diesel-electric locomotives, jet aircraft, synthetic fibres, electronic equipment, penicillin, plastics, petroleum products, fungicides, nylon yarn and’ other important products much too numerous to mention. By assisting in the growth of our secondary industries overseas investment helps to provide a stronger base for our exports and there is already evidence of this. In the three years preceding World War II. the percentage of our exports provided by our manufacturing, industries averaged something less than 6 per cent. In 1958-59. this percentage had more than doubled, and the upward trend continues.

I come now to the next criticism. The honorable member for Melbourne Ports (Mr. Crean) commented that a large part of private capital inflow is unidentified in government. statistics and suggested that this unidentified capital is of the worst possible kind. In particular he referred to a table in the Australia and New Zealand Bank “ Quarterly Survey “ for January, 1960, giving figures for the net annual dollar investment in Australia. He quoted a footnote to the table which described . “ other net annual dollar investment in Australia.” in 1958-59 as including “private, capital not yet identified “. The important word there is “ yet “. Each year the Commonwealth Statistician publishes a comprehensive survey of overseas private investment in Australia. There is, however, a time lag before the figures become available, and the footnote merely indicates that the survey for 1958-59 is not yet available. Also, had the honorable member taken the. trouble to read the other footnote to the- table he would have seen that the unidentified item included not only private capital inflow but also other unidentified items in the Australian balance of payments.

The table was, of course, using the balancing item from the latest balance of payments publication. This item includes errors and omissions in all of the items which make up our balance of payments. Australia is not alone in this problem. All countries have difficulty in fully identifying, the items in the balance of payments. This, does not mean that certain investors are by underhand means escaping, detection, as Opposition speakers seem to think. What is unidentified is not particular investors but the difference between identified changes in the accounts and the movements in our international reserves. These differences are traditionally lumped together in the capital account’ and are called “ unidentified capital inflow including errors’ and omissions “. Some differences are due to the fact that the. date of payment for some identified transactions may precede, or follow, by a considerable interval of time, the date on which the transactions- themselves are recorded. Errors and omissions can occur in calculating items in the current account, such as exports, imports and invisible items such as payments for freight or for travel. For example, the recorded import figures are based on value for duty, which quite often is not identical with the amount the importer actually pays for the goods. Such differences go to swell the balancing item. On the other hand, there is, of course, no difficulty - I stress this because we are dealing with a bill relating. to the International Monetary Fund - about identifying any transactions of the Monetary Fund which are published by that institution.

Another- criticism which the Opposition has- brought forward is that the increase in Australia’s International Monetary Fund quota would allegedly provide further opportunities for Australia to borrow overseas. I hope we can go on borrowing overseas, and on favorable terms, because, at this stage of Australia’s history and development; overseas- borrowings are a valuable adjunct to our- own savings: If we were to borrow and use the proceeds of the borrowing in a profligate way, or for goods which did not add to Australia’s capacity to conduct itself in a sound and stable economic fashion, then the overseas funds would quickly dry up and our overseas credit would suffer even more rapidly. Fortunately, the reverse is the case. T do not know of another time in our history when we have enjoyed a higher prestige internationally for the stability of our economy and when there has been a greater recognition of the progress we are making as a nation.

The view expressed by the honorable member for Melbourne Ports and other honorable members opposite shows that they are, to put it mildly, most confused about the nature of the fund’s assistance to its members. The honorable member for Wentworth (Mr. Bury) pointed out very clearly that there is a big difference between obtaining assistance from the fund - which is short-term assistance - and overseas private capital inflow and Government borrowings overseas. Arguments against the latter, which are long-term investments, are not relevant to borrowings from the fund, which are to provide member countries with foreign exchange to tide them over periods of temporary difficulty in their balance of payments.

If the honorable member for Scullin (Mr. Peters), who is interjecting, wants an argument about long-term loans, we shall have an opportunity for that at another time. From Australia’s point of view, not only have the long-term loans been completely warranted, but also we have cause, as a nation, to be appreciative of the fact that other countries have shown their confidence in us and helped us to grow. When a man goes to a bank for finance to develop a piece of land and the bank is prepared to trust him with funds so that he can develop that land and bring it into productive use, does he think that is a bad thing? Of course he does not. When a nation borrows for long-term productive use and the funds are used to good effect, that is not a matter calling for attack. It is a matter for congratulation that the credit of the nation is sufficiently high to attract that kind of support. It is time that honorable members opposite woke up to some of the economic realities of the day and age in which they live.

The fund expects members to repay drawings within three to five years. The emphasis is on temporary difficulties, members being expected to take other action to ensure that they balance their overseas payments in the long run. The fund would not grant a drawing to a member if it thought that the member would not be able to repay it within three to five years.

Access to adequate drawing rights is particularly important to Australia. As a primary producer, Australia is subject to sharp fluctuations in its export receipts, due to price changes overseas and seasonal conditions at home. It was in recognition of this that the fund agreed to the proposed increase in Australia’s fund quota. A member’s drawing rights are determined by the size of its quota, and the fund agreed that Australia’s drawing rights under its present quota were inadequate to meet temporary difficulties in Australia’s balance of payments. lt should also be noted that the important thing is that there should be access to temporary finance in time of need. The fact that the fund stands ready to makins resources available may be sufficient in itself to restore confidence in a country’s currency. For instance, at the time of the Suez crisis, the United Kingdom had to draw very heavily on the International Monetary Fund. The fact that other countries which were creditor countries at the time had knowledge of the fact that funds were available to the United Kingdom undoubtedly helped the United Kingdom to stabilize its position through a period of drawing. Because of the knowledge that the fund stands behind a member country, it may not be necessary, in circumstances of that character, actually to make a drawing at all.

The honorable member for Melbourne Ports argued that Australia’s balance of payments is unsound because it relies on capital inflow. He also argued that we should have import restrictions to protect Australian industry. Once the nature of the fund assistance is understood, these questions, although they can be answered completely effectively, become irrelevant. Even if no capital was allowed to come in from overseas and imports were severely restricted, there would still be a case for adequate drawing rights on the fund to meet temporary balance of payments difficulties arising from fluctuations in our export earnings. There are countries which at present maintain import restrictions and which do not have the good fortune to be able to borrow overseas or secure a flow of overseas investment. They have to turn at times to the resources of the fund in order to keep themselves internationally solvent.

The point can also be made that the increase in Australia’s potential drawing rights on the fund will provide support for the Government’s policy of full employment. As stated in the Articles of Agreement of the Fund, one of its primary objectives is -

To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.

Is there any fault to be found with that as a statement of broad objectives? By providing short-term financial assistance, the fund enables its members to overcome balanceofpayments difficulties which might otherwise make unemployment in their economies very difficult to avoid. On the general question of overseas private investment, it could be said that, if it were significantly reduced, the rate of development in Australia would almost certainly be slowed down, and this could mean reduced employment opportunities for labour. It could also have important implications for Australia’s immigration policy. On protection for Australian industry, the Government’s policy is that this should be done through the Tariff Board, not through import restrictions. The tariff is internationally accepted as the proper method for protection against imports where such protection is justified.

Finally, it is suggested that the bill does not provide assistance to under developed countries. The Opposition is clearly confused as to the nature of a member’s subscription to the bank. A member’s paid-up subscription provides the bank with foreign currencies which it can lend to other members, and the uncalled part of the member’s subscription provides the bank with an asset against which it can borrow money on the capital markets of the world. This money is in turn used by the bank to make loans to its members. Unlike the fund, a member’s subscription to the bank has nothing to do with the amount of money it can borrow from the bank. In granting its loans, the bank takes no account of the size of the subscription of the borrowing members. The honorable member for Yarra (Mr. Cairns) obviously was ignorant on this point when he stated -

When we examine the record of the bank, we find that it has not commenced to assist the underdeveloped countries in the way set out in its original charter.

To support his statement, he quoted from a reprint from the New York “ Times “. The article referred to Germany as the bank’s biggest creditor, and the honorable member went on to say -

The point that emerges from all this is that foreign countries, not the United States, are contributing substantially to the capital of the International Bank, and not the under-developed countries but the developed countries like Western Germany and Australia are receiving the lion’s share. . . . We oppose this bill as an indication of the way in which the International Bank has been used.

The point, of course, is that the New York “ Times “ article was concerned with loans to the bank and not loans by the bank to its members. Germany has not received any loans from the bank. Indeed, as the president of the International bank, Mr. Black, pointed out in a recent address -

The bank’s largest source of funds (for lending) for the past two years has been the Federal Republic of Germany.

As the annual reports of the bank show - these are freely available to honorable gentlemen in the Parliamentary Library - the bulk of the bank’s lending has gone to the under-developed countries and, in particular, to those with low standards of living. [Extension of time granted.] I thank the honorable member for Melbourne Ports (Mr. Crean) and the House for extending my time. I have only a short additional contribution to make, but I think that it is important that, in an area of controversy of this character, honorable members should have before them some authoritative statement of the facts as the Government sees them. I was making the point that the annual reports of the bank show that the bulk of this lending has gone to the under-developed countries of the world and, in particular, to those with low standards of living. As at 30th June, 1959, the bank’s loans to its members totalled about 4,400,000,000 dollars. Of this amount only about 500,000,000 dollars, or 11 per cent., represents the 1947 loans for postwar reconstruction in Europe. The other 3,900,000,000 dollars have been made available for economic development and the bulk of it has gone to under-developed countries with low standards of living. About 1,300.000,000 dollars have pone to Asia and the Middle East, including 444,000,000 dollars to India, the bank’s biggest borrower. About 900,000,000 dollars have gone to Latin America, and about 600,000,000 dollars to countriesin Africa. Thus 2,800,000,000 dollars, or over 70 per cent., of International Bank loans for development purposes have gone to Asia and the Middle East, Africa and Latin America You do not need much imagination to appreciate what this has meant in the process of development in those areas. Of the remaining 1,100,000,000 dollars about 800,000,000 dollars have gone to Europe, and 318,000,000 dollars to Australia.

So, the Opposition has criticized a bill under which Australia will make a . further subscription to the bank for use in its lending to other members. Most of the money will be spent in the under-developed countries about which the Opposition claims to be so anxious. The amount of Australia’s paid-up subscription under the present bill will be 13,300,000 dollars, and this will be paid in addition to Australia’s original paid-up subscription of 40,000,000 dollars.

Our record of contributions to- the underdevelopedcountries is commendable. We have given aid to the outside world valued at some £120,000,000 - this from a small country of just over : 10,000,000 people; a country which itself is a capital importer on a considerable scale for its own development.. We have done this since World War II., and we have continuing commitments in this field.We have agreed recentlyto contribute about £7,000,000 to the International Bank’s proposal for diversion of the Indus waters,and a bill will be introduced soon into the House seeking approval for a subscription of £9,000,000 to the proposed International Development Association. Australia’s contribution to internationalaid bearsfavorable comparison with that of other countries, and our record is all the more creditable when account is taken of the fact that Australia itself has a rapidlydeveloping economy and is a net importer of capitalfrom overseas. We certainly are not yet a capital exporting country like the United States, the United Kingdom and Germany. While we remain in this position of growth, while we remain so dependent for satisfactory development on overseas loans and overseas investment in this country, and while we remain sub ject, as we are, to the swings of fortune, whethertheybefromadverse seasons or from fluctuationsintheprices of our primary commodities, Australia will need the kind of arrangements whichwe, to our great satisfaction, have succeeded in bringing about, and which are exemplified in this measure.

I repeat that, to me it is a matter for utter amazement that honorable gentleman opposite, who claim to have the best interests of Australia at heart, should have seen fit to register their opposition to this bill.

Question put -

That the bill be now read a second time.

The House divided.

AYES: 60

NOES: 35

Majority . . . . 25

(Mr. Speaker-Hon. John McLeay.)



Question so resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported. “Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Harold Holt) agreed to -

That it is expedient .that an appropriation of revenue be made for the purposes of a bill for an act relating to matters connected with the agreements referred to in the International Monetary Agreements Act 1947.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill agreed to.

Bill reported without amendment or debate; report adopted.

Third Reading

Motion (by Mr. Harold Holt) - by leave - proposed -

That the bill be now read a third time.

Mr. i CREAN (Melbourne Ports) [9.17].- I desire, on behalf of the Opposition to clarify our attitude to this measure and to indicate that the Government has not answered in any manner at all the . essence of the Opposition’s charge. It ought ‘to -be on record, because the honorable member for ‘Wide Bay (Mr. Bandidt) seemed to be in some. doubt. There may be some excuse for that honorable member seeing that he has .not been here very long. But first of all, the Australian .Labour Party was not opposed to the establishment of the International MonetaryFund or the International Bank for Reconstruction and Development. In fact, the legislation to set up both these bodies was introduced in this House by a Labour government. Secondly, the Labour Party did not oppose ‘the general extension in the capital contributions both to the fund and to the bank, which was agreed upon by all members, -to the extent of 50 per cent. We did not oppose that when the measure came before the House not very many months ago. But what we have done is to oppose this particular measure, because it has been sought only by Australia and with the avowed purpose of extending Australia’s borrowing powers. The Treasurer (Mr. Harold Holt) would like to describe them as temporary borrowing powers.

The main “part of this debate has centred on the International Monetary Fund and not on the bank. .The Government has now indicated that it believes that Australia’s international reserves are of two kinds - it divides them into first line reserves and second line reserves. The first line reserves have always historically been known as the “ London Funds “ which, at the moment aggregate approximately £A550,000,000. Australia’s existing capacity to borrow from the International Monetary Fund, which has been .described as the second line of reserves, .prior to the .passage of this legislation, is 300,000,000 dollars or approximately £150,000,000. The total of the first and second line reserves at the moment is about £700,000,000. All that this measure does in respect of the International Monetary Fund is to increase Australia’s borrowing capacity in that fund by 100,000,000 dollars, or, in round terms, £50,000,000. In other words, it lifts the aggregate amount of both first and second line reserves from £700,000,000 to £750,000,000 Australian. Yet we are told by the Government that the measure is an act of statesmanship which in the foreseeable future may mean the difference between triumph and disaster in relation to Australia’s international reserves. I suggest that if the measure of the difference between caution ‘and indiscretion in relation to our overseas reserves is a mere matter of £’50,000;000 Australian, then obviously the Australian economy is on the razor’s edge that the Minister for Trade (Mr. McEwen) mentioned some time ago.

What the Opposition has sought to indicate in this debate is that the Government is not facing up to the real problems of the Australian economy. I was very interested to listen to the lesson read out to-night by the Treasurer as to the role of the International Monetary Fund and the role of the International Bank for Reconstruction and Development. Without being unduly arrogant, I suggest that I know as much as he does about the roles that those institutions are supposed to play. What we have said, and what the Government has not answered, is that the Government is not facing up in any way to the reality of Australia’s position, which is that in every year between the value of the physical goods we can sell and the cost of the physical goods we can import, there is a gap of the order of £200,000,000, which, at the moment, is being bridged only by an inflow of capital. As fast as capital is flowing in, it is going, to an increasing degree, into what T call unidentified sources.

The Treasurer read the words of the Australia and New Zealand Bank article quoted and made great play on them. He said, “He has not emphasized the words ‘yet identified ‘ “. Well, the amounts are identified so far as the statistics are concerned. In the year which I quoted, they were not marginal amounts. Of a total inflow of 65,600,000 dollars, 29,000,000 dollars was in the unidentified category. That requires move explanation than the statement that it is made up of things that you cannot identify when you put your statistics in at the end of the year. 1 made the point, which was taken up by the honorable member for Wide Bay (Mr. Bandidt), that even after the much-vaunted export drive on the part of the Department of Trade, Australia is more dependent than ever on primary exports - that the secondary industries have not expanded in terms of the export market to the extent that had been hoped. So we are still dependent on the export of a few primary products which are subject to violent fluctuations in volume of production, due to weather conditions, but especially to violent fluctuations of price. Your wool clip can be the same one year as against another, but in terms of export earnings it can vary by over £100,000,000. There is a fundamental problem in our economy. It cannot be solved just by extending temporary borrowing by 100,000.000 dollars, or by £50.000.000 in round terms. I suggest that that point has not been answered by the Government, and I think that the Opposi tion is fully justified in having taken, the course it has taken - that is, in opposing this measure.

Treasurer · Higgins · LP

– in reply - In view of the indulgence accorded me earlier by the House in granting me an extension of time, I do not propose to detain honorable members now for long. I will just reply briefly to two of the points raised by the honorable member for Melbourne Ports (Mr. Crean). First, he has tried to explain the apparent inconsistency between the attitude adopted by the Opposition on other occasions when an increase in our quota in the Internnational Monetary Fund was being sought, and its attitude on this occasion. He has said that this increase of quota is being sought only by Australia at this time. In a literal sense, that is true; but honorable members who heard what I had to say when introducing the bill will know that when the general increase in fund quotas took place last year certain member countries obtained special increases in their quotas over and above the general increase of 50 per cent. I named some of these countries. I said that they included Canada, Japan, Germany, Argentina, Brazil, Denmark, Mexico and Turkey, as well as a number of others. The Australian Government, having studied the circumstances which enabled these countries to increase their quotas, and having in mind our liability to fluctuations in export income, felt that if a case could successfully be made out by those nations for a special increase, there was just as strong a case for our acting in the same way. So we made our application, and it was successful.

Then the honorable gentleman tried to colour the picture by saying that I presented this proposal as something which could mean the difference between triumph and disaster - as some major economic development. That is absolute nonsense. If a man with £3,000 in the bank wishes to increase his credit-worthiness or his financial strength and finds he can add another £1,000 to it, he is very glad to have the £4,000 rather than the £3,000 in the bank. It does not mean that that is the difference between triumph and disaster.

It just means that he is in a much stronger position to deal with any financial strains which may develop.

This is neither a dramatic nor a notably significant change in Australia’s international financial circumstances. It has not been presented as such, but has been presented as a very useful addition to Australia’s second line of reserves, strengthening our capacity to deal with fluctuations in the future and, by the same process, strengthening the already high credit rating that Australia enjoys in other parts of the world.

Question resolved in the affirmative.

Bill read a third time.

page 1313


Second Reading

Debate resumed from 27th April (vide page 1127), on motion by Mr. Harold Holt-

That the bill be now read a second time.


– Is it the wish of the House that these bills be taken together and voted on separately?

Honorable members. - Aye.

Melbourne Ports

I should like to register about this measure the sort of protest that was registered about the measure we have just debated. Here we have three pieces of legislation which were presented to the House on Wednesday of last week. They cannot have any effect except in relation to income tax returns that will not be lodged until after 1st July,1960. Yet the Opposition again is asked to make a rational examination of these measures in the space of a few days, without having the benefit of a party meeting or anything of the kind. I contrast the treatment accorded to Opposition members and Government supporters by referring to the last measure. I had to make my speech within 24 hours of its presentation to the House, but the Treasurer (Mr. Harold Holt), who presented the bill, had the luxury of five days in which to prepare his answer to my speech. Although we believe that there is really nothing unjust in these bills as such, we feel so keenly about the matter that we intend to oppose them as an indication of our resentment of the manner in which legislation is treated in this House.

These three measures are necessary because of fundamental alterations recently made in the taxation structure of the Territory of Papua and New Guinea. New Guinea is a trust territory formerly known as a mandated territory, and we have the political problem of whether the development of New Guinea is to be in the nature of a plantation development by people from the mainland of Australia and by those from other parts of the world who are allowed into the Territory, or whether its economic development is to be undertaken with due regard paid to the rights of the indigenous people. We all know that, as part of its general responsibility, Australia sends into the Territory from its general revenue many millions of pounds more than comes out of the Territory. However, the Government recently saw fit to alter the taxation structure of the Territory, and was subjected to a great stream of abuse for doing so. Formerly, taxation had been mainly of an indirect kind, such as import levies, sales tax and customs duties. The Government decided to impose income tax upon the residents of the Territory and a bill, modelled on the income tax legislation applying on the mainland, was introduced. We are told by the Government that the rate of income tax in the Territory is roughly half the rate applying on the mainland.

I do not think that very many honorable members have looked at the income tax legislation that now applies in the Territory. We have to take on faith largely what we are told about it, but there is no doubt that the people in the Territory who will be paying the tax felt a great deal of resentment. When that resentment took the constitutional form of expressions in this House by honorable members on both sides, following pressure from Opposition members and from certain Government supporters, the Minister for Territories (Mr. Hasluck) ultimately divulged a great deal of information that should have been divulged in the first instance. The same situation applies with these measures, because they make certain fundamental alterations to the income tax structure of Australia. I am sure that, prior to the introduction of this legislation, the average Australian did not know that section 6, the definition section, of the Income Tax and Social Services Contribution Assessment Act, 1936-1959, defined Australia as including the Territory of Papua. This legislation will remove the discriminations that exist between the Territory of Papua and the Territory of New Guinea. The recently introduced income tax legislation applies to both New Guinea andPapua. Basically, the three bills now before the House deal with alterations that must be made’ as a consequence.

A memorandum of 31 pages has been circulated. I am sure that the officer’s who were responsible for that document, although they are experts in the income tax laws of Australia, took far longer to consider it than the time that has been allowed’ to the Opposition to study this legislation. I remind the House that the Opposition is expected to have examined these measures critically between last Wednesday night and to-night. I suggest that there is something wrong when legislation is approached in that way. These are highly important’’ matters for individual Australian taxpayers who have interests in Papua and New Guinea and for people in Papua and New Guinea who, because theymostly came from the mainland, still have economic interests in Australia returning them some income. More than 30 sections of our income tax legislation are being amended, and in addition, there are amendments to the schedules. Some of them may be innocent, but when the Government says that they are innocent, I for one am inclined to be suspicious. But again I question whether it is fair to amend all these sections in such a casual and cavalier fashion.

The first few pagesof the memorandum should have been incorporated in “ Hansard “. It was circulated to members by authority of the Treasurer after he had delivered his second-reading speech and does’ not form part of the speech. It begins-

The principal purpose of these Bills is to correlate the Australian income tax laws with the system of” income tax that has been imposed in the Territory of Papua and New Guinea asfrom 1st July, 1959.

I repeat the point that no assessments of those incomes will be made until after 1st July, 1960, when the returns are due. Therefore, there isnot the haste that the Government seems to think there is in respect of this measure.

Mr Harold Holt:

– People want to know where they stand.


– I want to know where we as an Opposition are supposed to stand. I think that certain courtesies and certain fundamental decencies are involved. If the Government is so far behind with the preparation’ of its legislation, it might at least adjourn the Parliament for a week. 1 say that in respect of three measures such as the income tax measures involved here the Opposition is entitled to an adjournment sufficient to enable it to have a full party meeting in order to consider the proposals. Such an opportunity has been denied in respect of two recent measures, one of them involving the borrowing of 233,000,000 dollars, and this one involving fundamental and historic alterations of the income tax laws.

The explanatory memorandum continues -

With the introduction of income tax in the Territory, it has been found necessary to review the operation of the Australian income tax system both as regards the taxing, under the Australian system, of income from Territory sources, and as regards the position of Territory residents who derive income from Australian sources.

The present legislation is designed to give effect to three broad principles: -

Residents of mainland Australia should not be called upon to pay combined Australian tax and Territorial tax greater than the Australian tax that would be payable if there were no liability for Territorial tax. 1 cannot,, on the face of it, see: anything, unjust about that, proposition.; The- explanatory memorandum proceeds’ - -

Territory residents should not be required to pay a greater measure of Australian tax than heretofore.

Discriminations in the Australian income ‘ tax law between the Territory of Papua and the Territory of New Guinea should be removed.

These changes in the law will apply to assessments based on the 1959-1960 income year and subsequent years. In” this way, the commencement of the new provisions will be co-ordinated’ with the commencement of income taxation in the Territory of Papua and New Guinea.

I have made my protest before proceeding to deal with the measures, Mr. Deputy Speaker. As I have said, I have not had much time to look at them and I have had very little time to consult with my colleagues on the matters involved. Broadly, as I have said, they arise from the alteration in the definition of “ Australia “ because of the separate taxation now to be levied’ in the Territory of Papua and New Guinea, which is now to have its own separate income tax. However, because of the economic relationships existing between the Territory and the mainlands Australia, there will be, as 1 have said, people in Australia- with economic interests in Papua and New- Guinea and people in Papua and New Guinea who came originally from the mainland and- who have economic interests in Australia. As a result, questions of double taxation arise:

Mr Harold Holt:

– I do not want- to interrupt the honorable gentleman unnecessarily, but if he feels any inconvenience in going ahead with these measures to-night rather than to-morrow, Mr. Deputy Speaker,.] should’ be willing to adjourn the consideration of these bills. However, is his party prepared to proceed with any of the other legislation on the. notice-paper?


– There is not very much, is there?’


– Holt. - There are other bills. I am quite willing to move on to any other item on the notice-paper if that is desired.


– I suggest, Mr. Deputy Speaker, that that is something that the Minister will have to take up with my colleague, the Deputy Leader of the Opposition (Mr. Whitlam),’ who deals- with these matters-, on ‘behalf of the Opposition.

Mr Harold Holt:

– I always try to be reasonable.


– That may- be. Perhaps it is: unfortunate that in each instance in which this sort of thing, has happened the measures involved have been ones in respect of which it has fallen:to me to lead, on behalf of the Opposition. I am prepared to go on; Mr. Deputy Speaker, but, as I have - indicated, I do so under protest. After all, . something like £600,000,000 per annum is- collected in income tax in Australia, and, therefore income tax proposals, in my opinion, are worthy of better consideration than they seem to receive from the Government when they are placed before this Parliament.

Mir. Harold Holt. - Is the Opposition prepared to go on with anything else on the. notice-paper?

Mr Whitlam:

– We could proceed with Order of the Day No. 5.

Mr Harold Holt:

– I- suggest to the honorable, member for Melbourne Ports that he ask. for leave to continue his remarks at a later date.


– In the circumstances, Mr. Deputy Speaker, I ask for leave to continue my remarks tb-morrow after my party has had a chance to meet and consider these measures.

Leave granted; debate adjourned.

page 1315


Second Reading

Debate resumed from 28th April (vide page 1219), on motion by Sir Garfield Barwick -

That the bill be now read a second time.


.- Mr. Deputy Speaker, this bill provides that the Commonwealth Industrial Court may henceforth consist of a Chief Judge and three other judges instead, as at the moment, of a Chief Judge and two other judges. This measure has to be taken in conjunction with the position which obtains in the Australian Capital Territory Supreme Court, which consists of a judge appointed to that jurisdiction alone and of all the members of the Commonwealth Industrial Court, who have been given commissions to operate also in the Australian Capital Territory jurisdiction. The bill has been made necessary because Mr. Justice Dunphy, of the Commonwealth Industrial Court and the Australian Capital Territory Supreme Court, has entered upon six months’ leave to which he is entitled, and because Mr. Justice Simpson, of the Australian Capital Territory Supreme Court - and of that court alone - has been compelled, as from the first day of this month, to resign his office. I should say at this stage that the Opposition respectfully agrees with the remarks made by the Attorney-General (Sir Garfield Barwick) about Mr. Justice Simpson’s record on behalf of his fellow citizens in peace and in war and as the first full-time judge of the Australian Capital Territory Supreme Court.

While Mr. Justice Dunphy is on leave there will be three judges - if the new appointment which this bill will permit is made - carrying on the jurisdiction of the Commonwealth Industrial Court and the Australian Capital Territory Supreme Court. When Mr. Justice Dunphy returns from his leave, there will be four judges of the Industrial Court and of the Australian Capital Territory Supreme Court carrying on the functions at present carried on by three Industrial Court judges and one judge of the Australian Capital Territory Supreme Court. Therefore, it is six of one and half a dozen of the other. When Mr. Justice Dunphy returns, there will be four judges carrying on the job that four judges do at the moment. While Mr. Justice Dunphy is away, there will be three judges carrying on the job that four judges have been doing hitherto. Therefore, we do not oppose the legislation.

There are two matters which subsequent speakers will touch upon. I cannot be quite sure, since this bill has come forward for consideration at shorter notice than expected, that they will be able to make their remarks to-night, but I apprehend that the honorable member for the Australian Capital Territory (Mr. J. R. Fraser) will refer to the unsatisfactory position which will arise if there is not an Industrial Court judge resident in the Territory. This has been a distinct disadvantage to citizens of the Territory while Mr. Justice Simpson has been indisposed. There are very many urgent matters concerning the liberty of the subject or the custody of children which can be dealt with by a Supreme Court judge alone. If there is no Supreme Court judge in the Australian Capital Territory, there is delay and expense in preparing documents and having them taken by other practitioners in the State capitals before a judge of the Industrial Court who has a commission in the Supreme Court of the Australian Capital Territory. The honorable member for the Australian Capital Territory will be seeking an assurance that, under the new dispensation, there will always be a judge of the Industrial Court resident in the Australian Capital Territory so as to carry out, at immediate notice, the functions which have to be carried out by a Supreme Court judge in the Territory. There are many Supreme Court judges in the State capitals but only one in the national capital. It is most important to have one resident in the Territory.

The other point will concern the operation of section 109 of the principal act, which was inserted in the 1956 recasting of the act and reproduced the 1951 amendments. You will remember, Mr. Deputy Speaker, that section 109 permits the Industrial Court to issue injunctions against industrial organizations, and we believe that the operation of this section has been quite disruptive of the spirit of conciliation and arbitration; that it has immediately frozen the relations of employer and employee when a dispute has arisen. If an employer, or the Commonwealth AttorneyGeneral on behalf of the Commonwealth, approach the Industrial Court to seek an injunction to restrain a breach by a union of an award, immediately employer and employee take up an implacable stance and it is thereafter impossible to proceed by conciliation and arbitration. It has been the invidious role of the Commonwealth Industrial Court since the 1956 redrafting of the act, following the Boilermakers’ Case, to carry out the jurisdiction under section 109. I apprehend that several of my colleagues will refer to the operation of that section when the debate is resumed to-morrow.

I myself wish to direct my remarks to the concluding paragraph in the secondreading speech of the Attorney-General. The Minister said that he had under consideration the question of what further jurisdiction of a general, as distinct from an industrial character, could conveniently and appropriately be added to the jurisdiction now vested in the industrial court. It would seem that the Attorney-General is now envisaging the possibility of extending the industrial court to become, as it were, a federal supreme court. It is quite possible for the Commonwealth of Australia to have federal supreme courts as, for some generations past, the Federal Government of the United States of America has set up such courts. I have touched upon this subject in the debates on the Estimates over the past couple of years, and some of the functions which occur to me as appropriate for such a federal supreme court I might now mention once again.

Section 75 of the Constitution provides that the High Court shall have original jurisdiction, in all matters, among others, in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party, and between States, or between residents of different States, or between a State and a resident of another State. Section 76 provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter arising under the Constitution, or involving its interpretation; arising under any laws made by the Parliament; or relating to the same subject-matter claimed under the laws of different States.

Mr McMahon:

– The High Court?


– Yes. This Parliament may make laws conferring original jurisdiction in these matters on the High Court. Then section 77 of the Constitution continues -

With respect to any of the matters mentioned in the last two sections the Parliament may make laws - (i.) Defining the jurisdiction of any federal court other than the High Court; (ii.) Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States.

Under this last section, we cannot preclude the High Court from hearing matters in which it has original jurisdiction or has been given original jurisdiction. We can, however, set up a federal supreme court in which litigants can bring many matters which at present must go to the High Court. My first objective in suggesting such a court is to free the High Court from hearing lesser matters. For example, appeals from judges who exercise jurisdiction under the Bankruptcy Act or from the judges of the Supreme Courts of the Australian Capital Territory, the Northern Territory or the Territory of Papua and New Guinea lie to the High Court and the High Court alone. Appeals from judges exercising the comparable jurisdiction in each State lie to the full court of the supreme court in that State. The High Court, in my view, would be glad to be rid of these lesser matters, if I might so describe them with respect, which ordinarily would be heard by the full court of a court of supreme court status.

Such a federal supreme court could give a lead in nation-wide law reform. Sir Owen Dixon, the Chief Justice, at the tenth Australian Law Convention in 1957, made several suggestions concerning the way in which the Commonwealth Parliament could itself lead the way in law reform, either applying those reforms to its own courts or passing a code which the State Parliaments could adopt for their own supreme courts. This Parliament could implement a uniform code throughout Australia in which the Commonwealth was one litigant and a private citizen or a State the other; or in matters in which two States were litigants; in which residents of different States were litigants; or in matters in which a State and the resident of another State were litigants. It could implement a code relating to matters which arise under any laws made by this Parliament or matters in which claims were made under the laws of different States. This Parliament could provide machinery for these cases to come before a federal supreme court and, if it saw fit, could preclude them from coming before State courts.

Thirdly, a federal supreme court could be a commercial court for the whole of Australia. Already, this Parliament can pass laws concerning bills of exchange, copyright, patents and trade marks. -By simple constitutional reforms which, I should imagine, would meet no political objections, the Commonwealth could secure jurisdiction in respect of companies and probate. Thus there would be a federal supreme .court which could deal with matters of industrial property, companies and probate. We already have a federal :court of supreme court status dealing with bankruptcy. We must inevitably set up another such court to deal with matters under the Matrimonial Causes Act ‘1959. I would hope that, again by simple -constitutional reform which would meet no great political objections because of the increasing interdependence of residents in Australia, one on another irrespective of State ‘boundaries, we could also obtain ‘ for this Parliament power to legislate with respect to- lunacy and custody. Thus all matters of status ‘and domestic law -could be dealt with by a federal supreme court.

A fourth matter of -growing importance is Commonwealth administrative law. Two years ago, the Prime Minister (Mr. Menzies) told me that there were 50 different boards, tribunals, committees and courts which heard appeals from administrative decisions under Commonwealth acts of Parliament. These boards, courts and committees have been set up under 45 different acts. There are, for instance, civil service appeals or appeals concerning Commonwealth instrumentalities. In the State of New South Wales such appeals are heard by the Crown Employees Appeals Board whose chairman is a judge of supreme .court status. Such matters, I submit, could very well be dealt with by a .federal supreme court. Again -there are several specific bodies which are quasi-judicial in nature, such as the taxation boards of review, the war pensions entitlement and assessment appeal tribunals and the Courts Martial Appeals Tribunal, For instance the president of the Courts Martial Appeals Tribunal is now a judge of the Supreme Court of N.S.W- These tribunals operate under Commonwealth acts. I would suggest that their functions could well be trans ferred to a federal supreme court. Again, there are several acts under which appeals from Commonwealth administrative decisions are made to a supreme court of a State. -One case concerns appeals under the National Health Act. Others concern appeals ‘regarding assessments in valuation and resumption matters. .In addition there are some matters upon which there is no appeal at all.

Mr McMahon:

– If it is an administrative jurisdiction, should an appeal be on -a .matter of administration or on any law involved in the administration?


– It would be -within the jurisdiction of the Parliament to decide that. The tribunals to which I have referred have, in many cases, to carry out precisely the functions which are ordinarily those .of .a .court. The Courts Martial Appeals Tribunal, ?the war pensions tribunals, and the taxation boards of review, and the supreme courts .of the States dealing with appeals under the National Health Act, all make decisions on .fact - usually on appeal - and on law in the same way as a supreme court judge of a State makes a decision on fact in the first instance, or on appeal, or on law.

These are all tribunals which this Parliament, has set up under its own acts. They are all like courts. It is one of the big problems of our day to decide how to supervise administration. Where an appeal from a federal administrative decision lies to a court, or to a body in the nature of a court, I am suggesting that it would be very convenient to have that appeal going to a federal supreme court. This would be more satisfactory than to have such appeals going to State Supreme Courts which, naturally, tend to diverge in their practice and decisions, or to ad hoc bodies which are highly specialized and which sometimes become too technical.

There are several matters in which at .the moment, there can be no appeals at all. If a publicservant is dissatisfied with a surcharge imposed by the Auditor-General his only appeal is by petition to the Governor-General. Again, if an Army officer is dissatisfied with a decision concerning his promotion, he can only. proceed by way of redress of wrongs and he can go as far as ‘the Governor-General in that regard. “Such >a case ‘has come to ‘my notice in the last ‘ few months. An Army officer in my electorate was advised. by the chairman of .the .Courts ‘Martial Appeals Tribunal, who was’ then in practice. at the bar as a .Queen’s Counsel of great eminence in -constitutional matters, that, on the construction of military instructions, he was entitled to retain a certain rank in the Army. The Judge Advocate-General’s Office had ruled: the other way, and when the redress of wrongs went to the GovernorGeneral, the Minister for the Army (Mr. Cramer) advised against the redress sought although the redress was supported by the opinion of this Queen’s Counsel whom this Government had appointed as Chairman of the Courts Martial Appeals Tribunal, and who was later appointed to the Supreme Court of New South Wales. It was very clearly a case .in - which a matter of interpretation was involved. There- -was no way of getting a decision. It could only be dealt with administratively and if injustice has been done there is at present no way .of -correcting it. A. much more ‘satisfactory way would be to have a .judge determine the matter. One .would think that a federal .supreme court judge would .be the person best able to do it.

There are a .considerable number df security decisions, concerning the naturalization of aliens or the refusal of promotion to a member of the Public Service. In 1958 an appeal was provided in deportation matters to a Commissioner, who must be a present or former judge, barrister or solicitor. I submit that it is a more satisfactory procedure to have these matters dealt with by a court which continues indefinitely or by judges who hold office for life as they must under the Commonwealth Constitution. It is not a satisfactory procedure to have matters of law of this nature settled by people who are appointed on a temporary basis for a specific purpose. They ought .to be determined by -courts consisting of judges who have nothing to fear from the decisions they give; who have no hope of preferment and no fear of discharge. But at least there is a procedure for having one’s objections to deportation heard by somebody. There is no forum in this country before which security objections to promotion in the civil service or to naturalization can -be determined. These are matters which are not only dealt with secretly but with regard -to which there is no appeal; and in the United Kingdom and in the United States of America judicial procedures have been evolved under which public servants who are refused promotion on security grounds ;and residents who are refused naturalization on security grounds are given the ‘opportunity to clear themselves and to rebut the suspicion that has been laid upon them. In this country we are lagging and there is no such procedure. I submit. that here, again, .since these matters arise . under federal administrative law, an appeal hearing should be permitted to a federal supreme court.

I -recall that ‘Mr. Justice -Simpson, who has just retired as a judge of the Supreme Court of the Australian Capital Territory, had functions in regard to Commonwealth air and marine courts of inquiry and I submit that they also should be in the hands of a federal -supreme court.

Appeals to taxation boards of review are permitted only in income tax matters. There are several matters under other taxation acts, such as the Sales Tax Act, where there is no way of testing the legality of the decision of the taxation ‘commissioner concerned unless one refuses -to pay the tax and is sued for it and successfully defends the suit. ‘I submit that it ought to be possible to determine the legality of the commissioner’s interpretation or assessment in sales tax matters in the same way, as for many years past we -.have permitted that to :be .done as regards Censorship is exercised under the Customs Act and -at the moment a book or film or work of. art. can be prevented from .coming into the country on moral grounds by executive act of the Minister for Customs or persons to whom he delegates his powers. It is true that he has appointed expert people to advise him on censorship matters. In the States, if there is a film or book produced in Australia, to which the ^police hold moral objections or, in some States, to which public informers ‘hold moral objections, the question of banning the book or film and of prosecuting persons selling or displaying is determined by a court, and I think there is wisdom in that procedure. However well we may ‘pick persons of special training to act as censors, there is still a safeguard in having these matters argued and reasons given for the decision. It is another administrative matter which should be determined on appeal by a federal supreme court.

I have on other occasions suggested that the time is at hand when social service decisions from which at the moment there is no appeal except to the charity or benevolence of the Minister for Social Services - and the act does not give him that power, but to the Director-General - should be referred to some court of appeal. At present there is no appeal in social service decisions, although many persons’ incomes depend on them. It is not satisfactory to have those matters determined on appeal, if at all, through representations made by a member of this Parliament.

Mr McMahon:

– Would you seriously suggest that with the power given to the Director-General such matters should be referable to a court?


– Yes, I think there are such matters, particularly where the means test is concerned. The honorable gentleman well remembers, from his experience as Minister for Social Services, that there are very many cases concerning the ownership of property or the occupancy of property upon which the director or, upon appeal, the director-general, has to make a decision and according to his decision a person’s income by way of pension is determined. Courts frequently determine matters concerning the occupancy of property, for instance, if two families are occupying a house, in what character are they doing so, as tenants or licensees-

Mr McMahon:

– But you would never get decisions.


– One of the objections I have found to administrative decisions of this character is that persons who receive an unfavorable decision or who are aggrieved by the administrative decision are able to criticize the public servants concerned. We all know that many complaints are made about the War Pensions Appeal

Tribunals, because they are not open to the public and because witnesses are not on oath and are not cross-examined, and because the tribunals give no reasons for their findings. Most of those complaints are ill-founded, but if these matters could be determined in a court as we determine comparable matters, no such complaints would be believed, or they would be less likely to be believed.

I put these suggestions because the application of our law is at present subject to appeals to such a very great variety of tribunals - over 50 - and yet in other matters there is no appeal at all and so there is a great opportunity to co-ordinate the whole procedure. To take another example, most of the litigation in the Supreme Courts of the States and Territories arises out of motor accidents, to determine whether one owner is liable in negligence for damages which have been caused and, if he is, to what extent he is liable. Since it is a compulsory form of insurance I have previously expressed the view that it could well be determined by way of a social service or periodic payment instead of lump sums and that the question of liability could be determined by a department, or, on appeal, by a court. But the present position is quite unsatisfactory where the courts and advocates and witnesses spend so much time on this very hazardous and conjectural business of deciding liability in the first place and the lump sum in the other, for disabilities which may disappear or grow worse or a state of dependence which may disappear or be of indeterminate duration. The financing of the periodic payments should be through the petrol tax. That would be a much cheaper way of doing it than by this constantly varying amount of compulsory third-party insurance.

The Attorney-General may contemplate giving the Commonwealth Industrial Court jurisdiction in appeals under the Commonwealth Employees’ Compensation Act. At the moment the persons who make claims under that act are the only persons who must seek workers’ compensation and receive it from a public servant. The decision, as made by the Commonwealth Employees’ Compensation Commissioner, or his delegates, is very dilatory and very technical. There is no time table; one cannot speed up his processes, and there is no hearing. Once he has made a decision, there is an appeal - in most cases, but not all - to a district court of a State even where, in that State, there is a special body dealing’ with workers’ compensation. This is clearly a case where a federal court is appropriate.

I wish the Attorney-General well in his intention to set up a Federal supreme court. There is a very great opportunity for this Parliament to modernize Australian administrative law, domestic law, industrial property law and commercial law, and to do it through a federal supreme court. Whatever may be said of the Commonwealth Industrial Court hitherto - and what is said about it is mainly due to the functions which this Parliament imposes upon it - it does seem that that court provides the nucleus for such a federal supreme court. We hope that the judges appointed under this amending legislation will be men well capable of taking on the greater variety of appeals, because we are sure that the more functions this court is given the more acceptable will be its operations.

Mr J R Fraser:

– I wish to speak briefly on this measure so far as it affects the Supreme Court of the Australian Capital Territory. I should like, first, to join in the expressions of appreciation of the great work done by Mr. Justice Simpson, who has just retired from that court after fifteen years’ service. Mr. Justice Simpson not only has great humanity, but he possesses a vast knowledge of the laws of the Territory and a wide knowledge of the people of the Territory. He acquired that knowledge as a resident judge here, and it has proved most valuable to him in the administration of justice in his court.

The Attorney-General (Sir Garfield Barwick) has told us that until another appointment is made to the Supreme Court of the Australian Capital Territory, the judges of the Industrial Court will be asked to exercise the jurisdiction of the Supreme Court. Under section 7 of the Australian Capital Territory Supreme Court Act, they are empowered to exercise that jurisdiction. The Attorney-General has been quite in definite in his remarks. During his speech, he said -

I do not propose at the moment to replace Mr. Justice Simpson. The judges of the Industrial Court will continue for some time to do the work of the Supreme Court, and can also be enabled to do the work of the Supreme Court of Norfolk Island.

I am not greatly concerned with the Supreme Court of Norfolk Island. The Attorney-General went on to say -

This may prove at times a burden until Mr Justice Dunphy’s return -

He is going on six months’ leave of absence - but it has seemed to the Government the best solution at the present time.

I hope that that temporary arrangement will not be required to continue for any length of time.

In his remarks, the Attorney-General admitted that the work of the Supreme Court in Canberra has been increasing steadily and diversifying. That is due, no doubt, as he said, to the increase in population and to the complexity of life in Canberra. Canberra is certainly acquiring some complexity, particularly in its business life and also, as the Deputy Leader of the Opposition (Mr. Whitlam) has pointed out, in the jurisdictions which are affected by a rapidly increasing population and a relatively prosperous community in which there is a high proportion of motor cars to people. The absence of a resident judge in the Territory has disadvantaged the community very considerably.

Mr Duthie:

– There is more than enough work for a resident judge.

Mr J R Fraser:

– There has been a considerable amount of work in the Supreme Court. The judges of the Industrial Court have had difficulty in arranging their sittings here. Solicitors practising in this city have been disadvantaged because it is difficult to ascertain the dates on which the judges of the Industrial Court will be able to sit in Canberra in their capacity as judges of the Supreme Court. This has created difficulties in obtaining the services of counsel and in arranging for witnesses to be present when suits are to be heard.

I should say that at the moment most of the solicitors in Canberra have cases which they want heard in the Supreme Court, but they cannot get any information as to when, if at all, the Supreme Court will sit.

Apart from that, a. resident judge is needed because if members of the legal profession have urgent applications to make, difficulty is created immediately if there is no resident judge to whom they can make an approach. For example, if an immediate injunction is required, and there is no resident judge, it is necessary for the parties to fly to Melbourne to approach a judge there.

I make no criticism at all of the judges of the Industrial Court who have exercised’ jurisdiction in the Supreme Court here. I am told that they are very good judges and very good lawyers, but, naturally, they do not have the familiarity with the laws of the Territory, or the knowledge of the Territory set-up, which can be acquired only by a judge who is resident in the area.

As the Attorney-General has said, the work of the Supreme Courthere is increasing. Litigation is increasing very considerably, not only in the Supreme Court, but also in the lower jurisdictions. As a result of the increased work in the lower jurisdictions, the appeal work of the Supreme Court itself is increased. Further, in recent’ years we have seen the advent of some big firms in Canberra and a great increase in the registration of companies in the Territory. Companies are being attracted to register here because there is no necessity for the payment of stamp duty.

The Attorney-General presaged that the position would be improved when Mr. Justice Dunphy returned from his leave. The Attorney-General may not have heard, as I have heard, that one of the other Industrial Court judges will beretiring shortly. In that event, the provision made in this bill, so far as it. affects the Australian Capital Territory Supreme Court, will largely be nullified. I understand that the Law Society of the Territory will be making an approach to the Attorney-General on this matter, and I hope that he will realize the necessity to have a resident judge here, for the reasons that I have given. Because of the increasing tempo of the work of the Supreme Court, referred to by the Attorney-General, and because of thenecessity for hearing urgent applications which must be made to the court from time to. time, I ask the Attorney-General and the Government not to delay in appointing a resident judge. At one stage in his remarks, the Attorney-General used the phrase, . “ at the moment “. Later, he used the words, “ for the present “. I hope that what is proposed is limited to the moment and to the present, and that no delay will occur in the- appointment of a resident judge.

Debate (on motion by Mr Pearce) adjourned.

page 1322


The following bills were returned from the Senate: -

Without amendment -

Cattle and Beef Research Bill 1960.

Cattle Slaughter Levy Collection Bill 1960.

Without requests -

Cattle Slaughter Levy Bill 1960.

House adjourned at 10.30 p.m.

page 1322


The following answers to questions were circulated: -


Mr Ward:

d asked the Treasurer, upon notice -

  1. Did the Full High Court by a majority decision reject an appeal against the decision of the Commonwealth Taxation Branch to disallow fares to and from work as an allowable deduction for taxation purposes?
  2. Did the Chief Justice, Sir Owen Dixon, state in his judgment that the authority for refusing to allow fares to and from work as income tax deductions was open to question but that the matter was one of clarification by the legislature rather than by the court?
  3. If so, does the Government intend to take any action as a result of the Chief Justice’s comment?
  4. If no action is proposed why are costs, ‘main tenance charges and -running ‘expenses of motor cars, which are supplied to business executives by their employers and are,used by these executives for the purpose of conveying them. to and from their offices, an allowable deduction for taxation purposes, whereas the cost of fares paid by other employees is disallowed?
Mr Harold Holt:

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

  1. Yes, the appeal was disallowed by a majority of four to one.
  2. The Chief Justice, Sir Owen Dixon, held that the expenses were not deductible either wholly or in part. In the course of his reasons for judgment the Chief Justice referred to earlier Australian judicial decisions supporting the non-allowance of a deduction and said -

These views have remained unquestioned up till this case. The relevant provisions of the English Income Tax Acts are not in the same terms as those of the Australian law, but the whole course of English authority involves a like conclusion. To escape from the course of reasoning on which they proceed requires the taking of refined and rather insubstantial distinctions. I confess for myself, however, that if the matter were to be worked out all over again on bare reason, I should have misgivings about the conclusion. But this is just what I think the Court ought not to do. It is a question of how an undisputed principle applies. Its application was settled by old authority long accepted and always acted upon. If the whole subject is to be ripped up now it is for the legislature and not the Court to do it.

  1. Any amendment of the law to allow a deduction in respect of the cost of fares to and from a place of employment or business is essentially a matter of budgetary policy and must be considered within the framework of the Budget as a whole.
  2. The income tax law requires the allowance of deductions for expenses not of a capita], private or domestic nature that are incurred in gaining or producing assessable income. The provisions of the law also extend to those expenses if they are necessarily incurred in carrying on a business for the purpose of producing income that is assessable. Expenditure incurred by employers in relation to motor cars is allowed as a deduction only to the extent that these tests are satisfied.
Mr Ward:

d asked the Treasurer, upon notice -

What is the estimated reduction of the Commonwealth revenue which results from taxation deductions allowed in respect of (a) commercial advertising, (b) legal costs incurred by newspapers in defending libel actions, and (c) entertainment costs associated with the conduct of a business?

Mr Harold Holt:

– The answer to the honorable member’s question is as follows: -

  1. and (c). The information necessary to ‘furnish these estimates is not available. To obtain this information, a detailed examination of about 1,000,000 individual and company income tax returns would be necessary, (b) It .is estimated that Commonwealth revenue is reduced by about £5,000 annually as a result of the allowance of deductions for income tax purposes of legal costs incurred by newspapers in defending libel actions.

Civil Defence

Mr Ward:

d asked the Minister for the Interior, upon notice -

  1. Was it unanimously agreed at a conference between Commonwealth and State representatives in January last that an expanded and uniform civil defence programme would be implemented?
  2. If so, what are the details of this proposal including the (a) cost, (b) period over which the money is to be spent, (c) amount of expenditure to which the Commonwealth is committed, and (d) special features of the plan?
Mr Freeth:

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

  1. An expansion and greater degree of uniformity of civil defence methods throughout Australia was unanimously agreed to at the conference.
  2. The several States are at present preparing detailed proposals for consideration at a further conference, and the extent of Commonwealth assistance will be considered in the light of the discussion at that conference.

Pharmaceutical Benefits Advisory Committee

Mr Cairns:

s asked the Minister for Health, upon notice -

  1. What is the name of each person who, as (a) an officer of the Commonwealth Department of Health, (b) one of the four medical practitioners appointed from six nominated by the British Medical Association, (c) a pharmaceutical chemist appointed from among three nominated by the Federated Pharmaceutical Service Guild of Australia, and (d) a pharmacologist, at present sits on the Pharmaceutical Benefits Advisory Committee?
  2. Have any special conditions existed at any time which have rendered it necessary for htm not to accept the advice of this committee?
Dr Donald Cameron:

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

  1. It has never been policy to publish the names of the gentlemen who serve on this committee and who are all eminent practitioners in their respective spheres. They are gentlemen who are actively engaged in their professions and who make available a great deal of their time, and serve on the committee in a voluntary capacity. Publication of their names might well result in their being subjected to unfair and unwelcome pressure from various sources and it is therefore considered inadvisable to do so.
  2. It has been the policy to treat the committee’s recommendations as confidential to the Minister and this information is regarded as confidential likewise.

Cite as: Australia, House of Representatives, Debates, 3 May 1960, viewed 22 October 2017, <>.